Three Egyptian fintech companies have been granted approval by the Financial Regulatory Authority (FRA) to offer securities brokerage services using financial technology, marking a significant step in the digital transformation of the country’s capital markets. Telda Securities Brokerage, Beltone Securities Brokerage, and Thndr Securities Brokerage will now be able to leverage technology for key processes including client verification, digital contract execution, and record-keeping.
The move comes as these and other fintech firms in Egypt face increasing competition and are looking to diversify their revenue streams beyond their initial core offerings. For Telda, a digital banking application known for its payments and money transfer services, and Thndr, an established investment platform, the brokerage licences represent a strategic expansion into a potentially lucrative area of the financial services sector. Beltone, a traditional financial services firm, is also embracing fintech to enhance its brokerage operations.
The FRA’s decision, announced on Tuesday, signifies a commitment to accelerating the digitisation of non-banking financial activities, in line with Law №5 of 2022 which regulates the use of financial technology in the sector. The regulator highlighted that the approved companies will utilise technology for electronic identification, authentication, customer onboarding, digital contracting, and the management of digital records. Telda and Beltone will partner with Vlens, while Thndr will work with Valify Solutions, both of which are registered outsourcing providers approved by the FRA. Thndr will also utilise its internal systems for certain functions.
The FRA emphasised that this digital transformation aims to broaden access to the capital market for a larger segment of the population. By simplifying account opening and trading procedures, fintech platforms can potentially lower costs and reduce the time required for individuals to start investing. This is particularly relevant in a market like Egypt, where investment penetration remains low compared to developed economies.
For companies like Thndr, which has already captured a significant share of new investors in the Egyptian Exchange, the brokerage licence allows it to deepen its engagement with its user base and offer a wider range of services. Thndr, which raised $20 million in a Series A round in 2022, reported a substantial increase in trading volume in 2024 and has expanded its operations into the UAE, with further ambitions in Saudi Arabia.
Similarly, Telda, which secured $20 million in seed funding in 2022, initially focused on providing digital spending accounts and payment solutions. The brokerage licence enables the company to expand its offerings into the investment space, aligning with its stated goal of evolving how millions of people interact with their finances in the Middle East, North Africa, and Pakistan (MENAP) region.
The FRA has stipulated that all companies utilising financial technology must implement robust mechanisms for managing technological risks, ensuring both operational efficiency and the protection of client rights and market stability. This focus on cybersecurity and data protection underscores the regulator’s commitment to fostering a secure and reliable digital financial ecosystem.
The approval of these brokerage licences comes at a time when the broader Egyptian fintech landscape is demonstrating resilience and growth, as evidenced by the recent strong financial performance of Fawry, a Cairo-listed fintech firm focused on digital payments. Fawry reported significant revenue and profit growth in 2024, despite economic headwinds, highlighting the potential of the sector.
A brokerage licence grants firms the authority to buy and sell securities on behalf of clients, act as intermediaries in financial markets, and charge commissions and fees. Depending on the specific licence, it can also permit firms to offer investment advice, manage client portfolios, and access market exchanges. For Telda and Thndr, which have already built substantial user bases, the ability to offer brokerage services represents a natural progression and a key avenue for revenue diversification as competition in the digital payments and investment platform spaces intensifies.
The FRA’s proactive approach to regulating and enabling the use of financial technology (fintech) in brokerage activities signals a positive development for the Egyptian capital market. By embracing innovation while maintaining a focus on risk management and investor protection, the regulator aims to create a more inclusive and efficient investment environment, potentially unlocking significant growth opportunities for both fintech startups and the broader economy.