Egyptian skepticism about banking is still running high as only 10 percent of Egyptians have bank accounts. Majority of banks do not even have a website, although 65 percent of them have reserved domain names, according to the findings of the Dubai-based Madar Research Group.
Banking penetration has been particularly slow in the past because the prevailing norm was either to keep savings at home or to join a gamiyah, a self-help financial group formed by close relatives, friends or co-workers for interest-free loans.
The banking sector in Egypt, which has been relatively slow to embrace modern technology, has started showing signs of emergence into electronic and Internet banking, in the face of a strong drive by government programs to create a Knowledge Economy.
Major initiatives such as the floating of the national currency in January 2003, the five-year plan to boost liberalization and privatization and the launch of innovative Information Technology (IT) projects are forcing Egypt's banking sector to come out of the shadows and join the global trend towards electronic banking and Web-based transactions.
"Though Egypt has been gaining prominence in terms of telecom infrastructure, e-government and multi-sector development, its banking sector has not kept pace with changes" said Diyaa Zebian, regional manager, Middle East & Egypt, eSolutions BEA. "However, the scenario appears set for a dramatic change as several recent developments have shown."
With the government leading the movement towards leveraging the tools of the Knowledge Economy, the banking sector has begun to embrace technology for delivering services to consumers. Internet banking has thus far been limited to a handful of banks, predominantly foreign, putting the 42 national banks at a major disadvantage.
In recent months, three local banks have taken the first steps to offering a combination of Internet and PC (Personal Computer) banking, while several others are planning to offer Internet banking during this year.
The biggest drive for Internet banking is led by four state-owned commercial banks, which collectively control 60 percent of all banking assets in Egypt, including two that are leading the way with a combined investment of $10 million deals to upgrade IT capabilities.
"Egypt holds immense potential for leading edge banking solutions once the population's mindset has changed," added Zebian. "Egypt is home to one quarter of the entire Arab population with more than a 20 million workforce, making it the largest retail market in the region in terms of numbers.”
Application infrastructure software company BEA has provided its WebLogic solutions for several banks in the Gulf region, including Saudi American Bank, Arab National Bank, Emirates Bank, National Bank of Abu Dhabi, Egypt American Bank, Arab Bank and Audi Bank.
eSolutions BEA is headquartered at Dubai Internet City, however it also operates through partners and resellers in a further nine countries in the Middle East those included are Saudi Arabia, Kuwait, Qatar, Bahrain, Oman, Yemen, Lebanon, Jordan and Egypt. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
