Financial Institutions

Egypt’s financial services sector - one of the oldest and most-established in the Middle East - is also one of the best-developed in the region, thanks to an industrious private sector and key regula­tory reforms. Today, the nation’s banks, brokerages, investment banks and private equity houses are among the most vibrant in the MENA region, attracting heavy foreign investment from major local and international names while launching their own ambitious regional expansion plans.

The Egyptian authorities undertook major banking reforms in the 1990s towards a more liberal system. This included the strengthening of bank supervision and regulations on the basis of internationally accepted standards to deal with the risks inherent in the new policy environment. To ensure the stability of the banking industry, the regulatory policy should include elements of private market discipline along with strong enforcement mechanisms of prudential bank regulation. The safety nets should be based on rules designed to align the private incentives of market players with the social goal of financial stability. Incentives for prudence and safe banking practices can protect market stability and increase the banks’ franchise values.

Most financial institutions face a host of varied issues that include market uncertainty, write downs, drying up of funds, falling demand for products and services and falling equity values. Basel requirements need expertise in financial markets and banking industries to provide advice and recommendations for improvements and implementation of such measures. Financial Institutions need to develop a more systematic and integrated approach to governance its risk management and explore opportunities to transform their business models to comply with Basel and other banking requirements. They should aim at making technology convergence more possible and gain trust from all people interested in their business.

In order to meet these challenges, it has become necessary for financial institutions to review processes for mitigation of risks while increasing performance. Stakeholders, including regulators, shareholders and clients, expect rigorous standards to be upheld to protect their funds and rights. In addition, fierce competition is driving boards and management teams to reassess their service provider relationships.

Crowe Dr. A. M. Hegazy & Co. has gained wide recognition for services designed to meet the risk management and performance needs of financial institutions. Our industry specialists practice within the following Centers of Excellence: