With the rise of digital banks and neobanks in recent years, the banking sector has undergone tremendous upheaval. By giving customers more options and convenience than ever before, these new businesses are upending the conventional banking model.

Digital banks are companies that only conduct business online and have no physical locations. They offer a variety of services, including credit cards, loans, current accounts, and savings accounts. Everything about the process—from account creation to customer support—is done online. With features like quick account opening, real-time notifications, and AI-powered financial advice, digital banks use technology to offer a simple user experience. Compared to regular banks, these financial institutions provide better interest rates and reduced costs for savings accounts.

Neobanks, in contrast, function solely online, making them comparable to digital banks. However, they collaborate with conventional banks to provide their services because they lack a banking license. Neobanks offer several services, including credit cards, loans, current and savings accounts, and loans. They frequently provide greater interest rates and lower costs than traditional banks, but they could offer fewer features than digital banks.

Digital banks and neobanks differ from one another in terms of their business models and target markets. Neobanks specialize in aspects of banking, whereas digital banks provide a broad range of services. Neobanks are often independent startups or fintech enterprises, while digital banks are frequently owned and run by traditional banks. Neobanks seek to disrupt facets of the banking sector, whereas digital banks aspire to offer a whole banking experience.

The Central Bank of Egypt (CBE) recently published legislation in Egypt authorizing the creation of digital banks. CBE issued rules for licensing, registering, controlling, and supervising digital banks, according to an announcement dated July 12th. To practice all banking services, except funding large-scale firms, the new licensing requirements require digital banks to have a minimum issued and paid-up capital of EGP 2 billion ($64.6 million). These rules are designed to encourage financial inclusion and boost competition in the banking sector. Egypt has a lot of promise for digital banks; thus, the country's tech-savvy population is looking for more practical banking options.

The drawbacks of traditional banking, such as the inability to access services in remote locations, high costs, and lengthy wait periods, can be overcome with the use of digital banks. They can offer creative financial management and investment solutions, which are crucial for the expansion of the economy and people's financial security.

Digital banking is the way of the future in Egypt, and the possibilities are promising. As a result of recent regulatory modifications, digital banks could promote financial inclusion in the nation. They might introduce a flurry of online banking services to Egypt and give users greater options and ease.

The traditional banking business is being disrupted by digital banks and neobanks, which are giving customers more options, convenience, and better rates. Neobanks concentrate on aspects of banking, whereas digital banks provide a whole range of banking services. The potential for digital banks in Egypt is enormous, given the country's recent regulatory revisions. They can contribute to greater financial inclusion, help solve traditional banking problems, and offer creative financial solutions. Digital banking is the way of the future in Egypt, and the possibilities are unlimited.