Egypt held its third Financial Sector Reform and Challenges Conference last week, exposing industry figures to new ideas about banking YTPME Customers are slowly gaining faith in information technology used by the banking industry, Sherine Nasr reports Technological advancements have been making a huge impact on banking in recent years. Developments in information technology (IT) has not only raised expectations among customers who have begun demanding high-quality service with quick, secure transactions, but it has also changed the concept of banks and services they provide. Until recently, international banks existed physically through the different branches they have around the world. "Now, the market has changed and a big range of services can now be obtained through remote channels," said Mohamed Ashmawi of the Commercial International Bank (CIB) during the conference last week. Organised by Egypt's International Economic Forum, the conference discussed vital issues related to the latest reform in the insurance and banking sectors and it showed cases of some successful financial reform experiences from neighbouring countries. According to Ashmawi, dealing through remote channels has taken over almost 80 per cent of the volume of banking activity in the world market. Although the concept is new to Egypt, however, big strides have been taken in collaboration with a number of multinational banks. "I returned to Egypt in the mid-1990s. Paying the rent and maintenance fees for my apartments in the US was a big headache then. Now I can do so through the electronic payment system," said Hussein El-Kholi, a technology expert. Up-to-date technology has become vital for a bank's survival, and with IT, banks have been shifting from corporate to retail banking. "A bank is no longer a clerk serving a client from behind a desk but rather an outlet for selling whatever services instantly and online," said Mohamed Maged, chairman and managing director of the Egyptian Banks' Company for Technological Advancement. However, commented Maged, although the opportunities of retail banking in the region have no limits, "if Egypt does not move fast and in the right direction, other countries in the region will." Many indicators, however, show that development in the financial sector in Egypt has been tremendous. The number of credit cards in Egypt has jumped from 20,000 ten years ago to two million today. Nonetheless, this represents a small number compared to Egypt's potential market. Although banks in Egypt have not developed full retail services as multinationals have done, the prospects are enormous. One of the main steps in the right direction was the establishment of the Egyptian Banks Company for Technological Advancement ten years ago with the main task of connecting banks and tailoring services and solutions which banks can later adopt, price and sell to their customers. "All of Egypt's 32 banks are now online." One of the modern applications that is expected to grow quickly is the use of a smart card for commercial payment. "The project has been implemented in eight banks where 100,000 pre-paid cards have been issued to the employees who are now able to cash their salaries electronically," said Maged, adding that more banks and financial establishments are following their example, so that within two years at least 5.5 million employees will be paid electronically. More encouraging is the fact that the e-signature law was recently ratified by the People's Assembly. In the meantime, automated payment of all utility services is ongoing. If providing the necessary technology is vital, creating the culture inside the organisations and among people to use the technology is even more crucial. "People usually shy away from using IT, particularly when it has to do with money transfers or electronic payments," said Ashmawi who added that latest statistics reveal that at least two per cent of bank clients in Egypt have already started to make online cash transfers. "Encouraging as it may be, it is far from being satisfactory," he added. In order to familiarise customers with IT applications, the CIB organised free computer training courses to its customers, tailored loans to buy computers and created Internet user groups who were trained to carry out operations online and would go back to the bank with their feedback. "It took us time and effort but the experience proved a success," he said.