In recent years the world has seen a boom in digital transformation, including digital banks. These offer financial services and products (e.g. deposits, withdrawals, transfers, saving accounts management, and loans) online without the need for physical branches.
The outbreak of the COVID-19 pandemic and social distancing measures contributed to accelerating the shift to digital banking which opened doors to new investors in the field and offered Egypt the opportunity to launch its first digital bank.
First: The size of the global market
According to the Digital Banking Market Trends report of Global Market Insights Inc. for market research and strategy consulting, the global digital banking market was valued at about $8 trillion in 2019 and is projected to record a compound annual growth rate (CAGR) of 6 percent from 2020 to 2026, growing to $12 trillion in 2026.
The growth in digital banking services can be attributed to several reasons. First, consumer behavior is changing as consumers tend to favor reducing visits to physical branches to avoid direct contact with others, particularly during the pandemic, and to save time as digital services will enable them to access their banking needs anytime outside of normal working hours. Second, there has been a global increase in investment in fintech, with total investments valued at $135.7 billion in 2019 with the inclination of banks to have a website or an app through which they can provide banking services to their customers. Third, the government policies that support the sector. Finally, the growth in e-commerce industry which have necessitated offering different electronic methods (that would attend to the number of online shoppers) for e-payment.
Figure 1: Active users of online banking services
Figure 2: Users of online banking services


Source: Statista Research in association with Juniper Research, 2021.
According to a recent research by Juniper Research Ltd., a marketing research and advisory services company, and Statista Research Department, the number of users of banking services worldwide, in 2020, stood at one billion and 903.2 million users and this figure is projected to increase to two billion and 551.8 million individuals in 2024.
Looking at the Far East and Asia, the region has the larger number of users of banking services reaching 805.1 million people in 2020, projected to rise to 974.3 million individuals in 2024. Especially noteworthy is the fact that the number of users of banking services is expected to rise in all regions.
Second: The Egyptian market
Egypt is one of the emerging markets with a high rate of financial illiteracy. In other words, the banking environment in Egypt and Africa is still less mature than in Europe, the United States, and Asia, among others, which makes it difficult to understand or adapt to changes in the financial market, depriving individuals of accessing services and advantages the sector offers.
According to a 17 May report published by TechCrunch, a US newspaper that focuses primarily on high-tech companies and startups, two out of three individuals are currently unbanked in Egypt, which means only 33 percent of the population have access to a bank account compared to 40 percent in the Middle east and North Africa. According to results of Ipsos-Forbes’s weekly consumer confidence survey of February 2021, the readiness of Americans to understand and adapt to the financial market and its variables is fast compared to other regions. For example, with the proliferation of more than 60 digital banks in the past few years, individuals have adapted to the new method.
The percentage of individuals who used their bank’s mobile application for daily banking operations last year amounted to 76 percent, i.e. three out of every four individuals.
In April 2021, the first Egyptian digital bank, Telda, has been launched with a pre-seed funding of $5 million from Sequoia Capital, to become the one with the largest pre-seed funding round in the Middle East and North Africa.
Tilda offers online banking services, providing the same services as those provided in physical branches of banks. Users of Telda can create a free account for sending and receiving funds. The bank will issue bank cards to users so that a card holder can use it on the internet and in stores to pay invoices. Telda is the first digital bank to be licensed by the Central Bank of Egypt, which, according to new regulations, would give it the right to issue cards and allow its users to use the bank’s app.
A particular challenge that faced Telda was building or preparing the infrastructure for digital banks. Now, Telda is aiming at producing and distributing cards benefiting from the funding from Sequoia. Telda announced that subscribers on its website exceeded 30,000, half of whom have already requested cards. In its first year of operation, Telda plans to issue a million cards.
The launch of the first digital bank in Egypt comes in line with the CBE’s vision on the digitization of payments aimed at curbing corruption in the financial sector, allowing for more control over the informal sector, and helping achieve Egypt’s goal of digitization of economy to accelerate development, modernize economy, and enhance spheres of activity in society.
As per TechCrunch, there has been an increase in Egypt’s investments in the technology sector, with Cairo attracting the largest number of investment deals in technology startups accounting for 24 percent of total transactions in Africa in 2020, with a total of 86 deal.
Additionally, according to Egypt’s Ministry of Communications and Information Technology, with the improved quality of the internet, the number of individuals with access to the internet has increased and this could be attributed to the huge investments in the internet infrastructure. Egypt has advanced by five places in the Inclusive Internet Index for the year 2021, taking the 73rd place in 2021 up from the 78th place in 2020 among 120 countries, and came fourth among 29 African countries, which increases the attractiveness of digital banking sector in Egypt and boost growth in it.
Overall, Egypt is considered one of the promising markets for digital banks, being one of the largest consumer markets in Africa. The Egyptian economy depends heavily on cash and the use of payment cards is still limited. Tilda took the first step, taking advantage of these opportunities, and the market is still huge. There are still opportunities for other digital banks to gain a large share of the market, particularly with the increasing awareness of individuals about digital marketing, implementing supportive policies, and backing digital entrepreneurship.