Mohamed Farid, Chairperson of the Financial Regulatory Authority (FRA), said that the development of legislative and regulatory frameworks, alongside the expansion of fintech applications, has played a pivotal role in widening the base of beneficiaries of non-banking financial activities, while empowering youth and women to actively participate in capital markets, insurance and investment activities. Speaking at the Top 50 Women STEM and Future Innovation Summit, Farid said that public service faces increasingly complex challenges due to overlapping interests and a growing number of stakeholders. This reality, he noted, requires continuous effort supported by strong scientific and professional reference frameworks. He stressed that ongoing education and engagement with international experiences, particularly in advanced economies, are essential for understanding markets and communicating effectively with investors and global institutions using a shared professional language. Farid added that anyone engaged in public service must demonstrate constant diligence and a commitment to lifelong learning. He explained that he personally followed this approach by earning four master's degrees to continuously update his knowledge and remain closely aligned with global developments in the financial sector, particularly in advanced markets. This, he said, enables effective communication with international investors and institutions in terms they understand, emphasising that solid scientific and professional grounding is the cornerstone of effective regulatory work. The FRA chair pointed out that there is a common misconception among some members of the public that they fully understand the nature of work carried out by public institutions. In reality, however, the scale and complexity of the challenges facing public authorities make it essential to engage with citizens, explain the reforms being implemented, and clarify how these reforms affect their daily lives. Achieving this level of engagement, he said, is not possible without strong academic foundations and accumulated professional experience. Farid explained that the FRA is among the public authorities most closely connected to citizens' everyday lives, given its supervision of sectors that directly affect their needs. These include compulsory and supplementary motor insurance, private insurance and pension funds, insurance brokerage firms, actuarial services companies and investment funds. In this context, Farid highlighted the Authority's experience with gold investment funds, which were launched in 2023 from a standing start. Within a relatively short period, these funds succeeded in attracting investments of between EGP 4bn and EGP 5bn from nearly 250,000 investors. Many participants began with relatively small investment amounts, reflecting the FRA's success in achieving one of its core objectives: promoting investment democracy and making investment opportunities accessible to all segments of society. Farid cited a quote attributed to Albert Einstein, noting that one of the major problems in societies is continuing to do the same thing while expecting different results. He recalled the state of Egypt's insurance sector in 1999, when insurance premiums accounted for less than 1% of GDP, at approximately 0.9%, highlighting the limited penetration of insurance services at the time. He added that average insurance penetration rates range between 5% and 7% in emerging markets, and between 12% and 15% in advanced economies. Egypt's insurance sector at the time also suffered from a shortage of actuaries, a highly specialised profession, as well as difficulties in accessing qualified human capital. The human-capital challenge extended to educational curricula for insurance intermediaries. Farid noted that insurance premiums showed virtually no growth for years, with the sector remaining stagnant until he assumed the chairmanship of the FRA in 2022. He stressed that it was no longer acceptable to continue operating using the same traditional approach, limited to issuing a series of regulatory decisions. Instead, the Authority adopted a fundamentally different path, centred on updating educational curricula and information frameworks as a primary gateway to genuine and sustainable reform. Farid explained that when assessing markets, any financial regulatory authority must adhere to two non-negotiable objectives. The first is maintaining financial stability, which he described as the primary responsibility of any financial regulator. The second is developing and expanding market size. He said that the reforms adopted by the FRA were designed to generate tangible impact across financing activities, capital markets and the insurance sector. Understanding the characteristics of new generations, particularly Generation Z and Generation Alpha, was a key driver behind these reforms, Farid said. He explained that these generations no longer have the inclination or patience to complete traditional procedures, such as physically visiting brokerage firms to sign contracts. As a result, Law No. 5 of 2022 regulating the use of technology in non-banking financial activities was enacted, delivering comprehensive impact across products and markets. Farid noted that amendments introduced under this framework significantly eased access for young people to invest in the stock market. Previously, the annual average number of new investors obtaining trading codes ranged between 25,000 and 29,000. This figure jumped to approximately 340,000 in 2023, followed by 240,000 in 2024, reaching 281,000 investors by October of the current year. He emphasised that this qualitative leap was driven by the digitalisation of know-your-customer (KYC) procedures, alongside a broader package of market reforms. Turning to the insurance sector, Farid highlighted the significant capital gap that had persisted for years. In 2007, the minimum capital requirement for banks stood at EGP 500m, compared with just EGP 60m for insurance companies. By 2020, bank capital requirements had risen to EGP 5bn, while insurance companies' minimum capital remained unchanged at EGP 60m. To address this imbalance, the FRA worked on issuing the Unified Insurance Law, which consolidated four separate laws into a single legislative framework. Following extensive discussions lasting between two and three years, the law raised the minimum capital requirement for insurance companies from EGP 60m to EGP 750m, ensuring recapitalisation, strengthening insurers' ability to bear risks and enabling the development of more advanced insurance products. As a result of these reforms, Farid noted that three to four insurance companies have begun offering comprehensive motor insurance policies for new vehicles, with the ability to complete all procedures digitally from home. He stressed that the combined impact of legislative, regulatory and technological reforms has driven rising demand for functions that have become critically important from a supervisory perspective, most notably internal audit, governance and compliance. As a regulator, the FRA requires these functions to be in place within the institutions it supervises, which currently number around 3,900 entities. In this context, Farid highlighted the role of the FRA-affiliated Financial Services Institute in qualifying human capital through specialised training programmes. He also drew attention to the regulation of third-party administrator (TPA) companies managing healthcare programmes and their placement under direct regulatory supervision, contributing to market organisation and the protection of stakeholders' rights. Farid concluded his speech by stressing the importance of empowering women and youth, particularly in the fields of science, technology and innovation, describing them as a fundamental pillar for building a more efficient, resilient and sustainable financial future.
