Introduction
With the advent and popularity of smartphones, mobile and internet banking have gained acceptance and popularity from people around the world and today it is the most common and user friendly way of banking. It offers a wide range of banking operation at the fingertips for account holders and save them from standing in long queues and waiting for the help desk operator to take their calls for their day to day banking needs. Most of the high-street banks around the world offer these facilities and customers also prefer to choose them. Egyptian markets are also no exception to this trend. Many Egyptian banks are keen to attract more customers in the competitive race by offering mobile banking facilities. However, the laws in the country do not provide for any specific regulations to address the issues involved in mobile banking. Mobile banking transactions and identity verification for the same in Egypt are governed by the regulations and circulars issued by the Central Bank of Egypt (CBE).
The Legal Framework
On 2nd February, 2010 the board of directors of CBE has issued a decision for regulating the mobile payment services offered by banks in the country. Further, on 14th April, 2011 Anti money laundering unit has announced additional compliances need to be complied by the banks offering electronic payment facilities. Proper measures for identification of customers and service providers should be observed and all required documents need to be submitted by each customer. The banks are also responsible to establish proper systems to protect the confidentiality of data available to them regarding their account information of customers and clients. They should maintain stringent confidentiality norms and restrict themselves or their staff from disclosing any information.
Existing Scenario
The CBE has prescribed norms for mobile banking and maintaining confidentiality of client’s account information, but as aforesaid, there is no specific law in Egypt to deal with various aspects of mobile banking and service providers. The regulations of CBE may not be full proof to address the risks involved.
The rapid diffusion of mobile banking has exposed grey areas in existing regulations and have led to the need to strengthen risk controls to address various policy issues including protection of customers’ finances and information related to financial data.
The Information Technology Industry Development Agency Law of Egypt issued as Law no. 14 in 2005 have stated that E-signatures, E-documents and electronic messages shall bear the same effect as signatures, physical documents and official or unofficial messages have in civil, commercial and administrative transactions under the provisions of Evidence Law.
The above-mentioned decision of the CBE states that the bank and mobile banking service providers shall maintain the highest security standards of encryption and authentication of user’s identity. Further, a process of double check and authentication must be followed, using phone number a PIN to originate an instruction for payment. The decision further adds that the PIN must satisfy the requirements laid down in the decision.
The decision and the CBE regulations require the information technology operating the internet and mobile banking transactions, must use intruder detection systems, firewalls, surveillance and system integrity checking in place to ensure complete protection of user and customer data. It is important to note here that CBE is empowered to check and inspect any part of the system to ensure its compliance with specified measures.
The CBE regulations also require mobile service payment providers to set up limits for daily and monthly transactions. It also prescribes to enter a written agreement with each customer for dealing with disputed transactions. A form for the same shall also be available at the website of the bank.
Missing Regulatory Compliances
The Egyptian government is encouraging the payments through electronic means continuously which shall result in larger penetration of internet and mobile banking service providers and a demand for regulations to deal with the complexities involved therein. Therefore, there is a pressing need to amend the existing regulations and have a more specific regulatory system for emergence of e-financing in Egypt.
The Bottom Line
Recent developments in the country significantly impact the electronic payment systems in the country. The announcement of a partnership between Egypt and Master Card which is expected to serve 54 million Egyptians for e-banking shall call for more explicit regulations. The financial authorities shall have enough systems to keep a check on the service providers and ensure safety and protection of financial data related to customers.
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