EnterpriseAM sat down with CIB CEO Hisham Ezz Al Arab (LinkedIn) to give us the strategic logic behind the bank’s plans to launch a digital bank, why Egypt’s branch networks are still growing while the West’s are shrinking, and what the country’s banking sector will look like at the end of the decade. Edited excerpts from our conversation:

EnterpriseAM: As of 2025, I believe CIB had around 2.5 mn customers. Is the move to launch a digital bank a defensive play to retain existing customers in the face of fintech competition, or a growth play aimed at attracting new segments and the new wave of young people entering the banking system for the first time?

Hisham Ezz Al Arab: The initiative is primarily about expanding the market rather than protecting the existing one. Egypt has a large and underserved population. The country has more than 100 mn citizens and a young, digitally savvy consumer base, a large portion of which remains outside the formal banking system.

CIB’s digital bank is therefore designed to reach new segments that traditional models struggle to serve effectively. These groups are increasingly digital but often face barriers, such as complex onboarding and limited access to credit.

EnterpriseAM: In Europe and the US, traditional banks have been drastically cutting the number of branches they operate. But in Egypt, the opposite seems to be the case. Why is that?

HE: Egypt is at a different stage of banking market development than Europe or the US. In mature markets, banking penetration is already high, and digital usage is deep, so branches are often redundant. In Egypt, banks are still expanding access, building trust, and reaching customers who are entering formal finance for the first time.

So, the right way to think about Egypt is not physical versus digital, but physical plus digital during this transition period. Traditional branches continue to play a key role, while newer formats such as assisted onboarding, partnerships, and self-service kiosks can deliver much of the same accessibility at a lower cost and with a better fit for digital-first customers.

EnterpriseAM: Digital banks have become a really important and large part of the banking industry in many other countries in the world, but not yet in Egypt. Why?

HE: Digital banks are newer in Egypt, largely because the ecosystem has only recently reached the necessary maturity. Over the past few years, the Central Bank of Egypt has taken important steps to enable this shift, introducing digital banking licenses, strengthening fintech regulations, and enabling tools such as e-KYC and regulatory sandboxes to support innovation in financial services.

At the same time, consumer readiness has accelerated significantly. Egypt now has more than 96 million internet users and a young population, which is increasingly comfortable with digital payments and mobile services. Egypt is at the brink of an inflection point with regulatory momentum, demographic tailwinds, and consumer behavior aligning to drive rapid digital adoption across the country.

EnterpriseAM: With interest rates broadly on a downward path — notwithstanding potential disruptions from the war on Iran in the weeks ahead — will this put pressure on the margins of local banks with large branch footprints?

HE: Lower interest rates can place some pressure on bank margins, as lending yields tend to adjust faster than funding costs. However, the impact in Egypt is likely to be manageable. Banks entered this cycle with healthy profitability and strong balance sheets. Given that lower rates typically stimulate credit demand, this would help offset margins compression.

EnterpriseAM: Will the creation of digital banks in Egypt also add other pressures on traditional banks?

HE: Digital banks will certainly increase competition in specific areas, particularly around customer experience, speed of onboarding, and the use of data to deliver more personalized financial services. Digital-first models are typically able to launch products faster, operate with lower cost structures, and design journeys that are more intuitive for mobile-first customers.

However, this dynamic is also positive for the broader banking sector. In Egypt, the market remains significantly underpenetrated, so there is substantial room for both traditional and digital models to grow.

In practice, the likely outcome is a more diverse and innovative banking ecosystem, where traditional banks continue to leverage their trust, scale, and balance sheet strength, while digital banks push the industry toward faster, more accessible, and more customer-centric financial services.

EnterpriseAM: Are there functions and segments of the population that digital banks can’t serve as well as branch-based traditional banks?

HE: Digital banks are very effective at serving everyday banking needs, but some functions and segments still benefit from traditional, branch-based models. For example, complex financial needs, such as large corporate lending, structured financing, or advisory-heavy services, often require deeper relationship management and face-to-face engagement.

EnterpriseAM: 2026 has already been an eventful year. Has this changed the plan for when you’re planning to officially launch the digital bank?

HE: Our vision, strategy, and ambition for the digital bank remain steadfast as we progress against our strategic priorities and launch timelines. The team is working at pace and progressing well across critical milestones, while closely liaising with the CBE as part of the licensing process.

EnterpriseAM: Looking ahead to 2030, what role do you see digital banks playing in Egypt?

HE: By 2030, digital banks are likely to play a central role in driving financial inclusion and effecting a gradual change across the digital financial ecosystem in Egypt. The country has a young, digitally connected population, which creates strong momentum for mobile-first financial services. As the ecosystem matures, digital banks are also likely to become key platforms connecting consumers, merchants, financial service institutions, and government services.

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