A guideline to enhancing Fintech adoption in Egypt/ Yosra Mohamed Elgezeiry

Supervisor:
Mohamed Awny

Thesis (M.A.)—Nile University, Egypt, 2023 .

"Includes bibliographical references"

Contents:
Certification of approval ...................................................................................................... i
Dedication ........................................................................................................................... ii
Acknowledgment ............................................................................................................... iii
Declaration of copying ....................................................................................................... iv
Abstract ............................................................................................................................... v
Table of Contents ............................................................................................................... vi
List of Abbreviations .......................................................................................................... x
List of Figures .................................................................................................................... xi
List of Tables ................................................................................................................... xiii
Chapter 1 : Introduction ...................................................................................................... 1
1.1 Background ............................................................................................................... 1
1.2 Research Motivation .................................................................................................. 3
1.3 Structure of the Thesis Document ............................................................................. 3
Chapter 2 : Fintech Adoption review .................................................................................. 5
2.1 Fintech Definition ...................................................................................................... 5
2.2 Major Milestones in Fintech development ................................................................ 6
2.3 Fintech Evolution ...................................................................................................... 7
2.3.1 Fintech 1.0 (1866 - 1967)................................................................................... 7
2.3.2 Fintech 2.0 (1967 - 2008)................................................................................... 8
2.3.3 Fintech 3.0 (2008 - Present) ............................................................................... 8
2.3.4 Fintech 3.5 (2008 - Present) ............................................................................... 8
2.4 Fintech Verticals ...................................................................................................... 10
2.5 Fintech Opportunities and Challenges .................................................................... 12
vii
2.6 Fintech Business Model .......................................................................................... 14
2.6.1 Software as a Service (SaaS) ........................................................................... 14
2.6.2 Platform as a Service (PaaS) ............................................................................ 14
2.6.3 Banking as a Service (BaaS) ............................................................................ 14
2.7 Fintech versus Banks ............................................................................................... 15
2.8 Fintech Key Players and Ecosystems ...................................................................... 16
2.9 Technology Gap ...................................................................................................... 17
2.10 Fintech Key Success Factors ................................................................................. 18
2.11 Extended Technology Adoption Model (TAM2) .................................................. 21
2.12 Global Fintech Adoption ....................................................................................... 23
2.11.1 Top Global Fintech Hubs ............................................................................... 26
2.11.2 Top Fintech Startups worldwide .................................................................... 29
2.13 The Impact of Fintech Adoption ........................................................................... 31
2.12.1 Impact on the Society..................................................................................... 31
2.12.2 Impact on the Environment and the sustainable development goals (SDGs) 32
2.12.3 Impact on the Economy ................................................................................. 32
2.14 Fintech in China .................................................................................................... 33
2.14.1 Overview ........................................................................................................ 33
2.14.2 Industry Landscaping ..................................................................................... 34
2.15 Fintech in the UK .................................................................................................. 36
2.15.1 Overview ........................................................................................................ 36
2.15.2 Industry Landscaping ..................................................................................... 37
2.16 Fintech in Egypt .................................................................................................... 39
2.16.1 Overview ........................................................................................................ 39
2.16.2 Fintech Industry Landscaping ........................................................................ 43
viii
2.17 Problem Statement ................................................................................................ 45
Chapter 3 : Research Methodology................................................................................... 46
3.1 Research Main Objective ........................................................................................ 46
3.2 Research Sub-Objectives ......................................................................................... 46
3.3 Questions to be asked .............................................................................................. 46
3.4 Research Hypotheses ............................................................................................... 47
3.5 Research Method ..................................................................................................... 49
3.6 Data Sampling and Population ................................................................................ 51
3.7 Data Collection Method .......................................................................................... 51
3.8 Research Significance ............................................................................................. 52
Chapter 4 : Results and Discussions ................................................................................. 53
4.1 PESTEL Analysis .................................................................................................... 53
4.1.1 China Case ....................................................................................................... 53
4.1.2 UK Case ........................................................................................................... 57
4.1.3 Egypt Case ....................................................................................................... 62
4.1.4 PESTEL Analysis Comparison ........................................................................ 68
4.1.5 Fintech Success in UK and China .................................................................... 93
4.1.6 Comparison of key success factors .................................................................. 94
4.2 Performance GAP Analysis ..................................................................................... 99
4.3 Egypt Fintech Adoption Questionnaire ................................................................. 104
4.3.1 Socio-Demographic characteristics of the participants .................................. 104
4.3.2 Use of Fintech ................................................................................................ 106
4.3.3 Personal Characteristics ................................................................................. 107
4.3.4 Privacy, data protection and digital behavior ................................................ 108
4.3.5 Financial characteristics ................................................................................. 112
ix
4.3.6 Online financial services ................................................................................ 115
4.3.7 Regression analysis ........................................................................................ 119
4.3.8 Discussion of the results and key findings ..................................................... 121
4.4 Recommendations to enhance the Fintech Industry .............................................. 123
Chapter 5 : Conclusion.................................................................................................... 130
References ....................................................................................................................... 133
Appendices ...................................................................................................................... 143
Appendix 1: Fintech Evolution ................................................................................... 143
Appendix 2: Fintech Verticals ..................................................................................... 144
Appendix 3: Chinese Regulation Timeline ................................................................. 145
Appendix 4: CBE financial sector Reform .................................................................. 146
Appendix 5: Fintech Egypt Landscape 2021 .............................................................. 147
Appendix 6: Socio-Demographic Characteristics ....................................................... 148
Appendix 7: Fintech Adoption Questionnaire ............................................................. 150

Abstract:
Egypt is still lagging with financial inclusion and serving the majority of its unbanked,
underbanked, marginalized, and its most vulnerable population. This is despite the great
efforts done by the Central bank of Egypt, establishing the first Fintech hub, creating the
first regulatory sandbox, and starting an EGP 1 billion fund for Fintech innovations and
startups development. Fintech adoption rate is still falling behind peer countries in the
region. Using business analysis tools together with field research, this research attempts to
set guidelines and strategies for spreading and enhancing the application of Fintech in
Egypt.
The study indicates that adapting advanced emerging technologies such as blockchain,
crypto, AI, Big data, IOTs, attracting highly overseas skilled talents as well as nurturing
home grown ones are important factors for the proper implementation of Fintech in Egypt.
It also identifies the pain points and customer needs, working on developing incentives for
its adoption. Moreover, this research identifies the extreme importance of the governmental
support and favorable policies towards building the ecosystems that are essential for the
growth of the Fintech Industry.
This research reveals that high level of transparency, 24/7 availability, ease of use and cost
of service are the top drivers for Egyptians to switch to Fintech. Age impacts the probability
of Fintech adoption, as younger adults are more willing to use online financial services.
While the level of financial literacy, Education level and Income does not have significant
influence on Fintech adoption in Egypt.

Text in English, abstracts in English.