Algeria’s economy is entering a new era with the emergence of digital banks and insurance, two key pillars of financial sector modernization. These innovations promise to transform not only the way financial services are delivered but also their accessibility and impact on the economy.

What Are Digital Banks and Insurance?

Digital banks and insurance companies are financial institutions that fully leverage digital technologies to offer their services. Unlike traditional institutions, these entities rely on online platforms and advanced technological tools to meet customer needs.

Typical Services of a Digital Bank:

• Online account opening and payments.
• SME-focused loans and savings management via interactive tools.
• Secure transaction processing and money transfers.

Typical Services of a Digital Insurance Company:

• Online subscription and management of insurance policies.
• Risk analysis using artificial intelligence (AI).
• Rapid claims processing through digital tools and simplified interfaces.

What Are the Prospects and Benefits?

Currently, Algeria has approximately 12.5 million bank accounts, a figure that highlights significant room for improving banking penetration. With the introduction of digital banks, this reform could transform access to financial services by making them simpler, faster, and more accessible, even in remote areas.

By promoting digitalization, this advancement directly contributes to financial inclusion by integrating segments of the population traditionally marginalized by the banking system, such as young people, informal workers, and rural residents. Furthermore, transitioning to digital services could enhance trust in the banking system, encouraging more citizens to open accounts and actively participate in the formal economy.

A Legal Framework to Ensure Trust

The transition to digital financial services is supported by a strong legal framework. Regulation 24-04, which came into effect in 2023, establishes strict rules for digital banks. This framework also applies to digital insurance activities, ensuring customer protection while maintaining institutional compliance.

Key Requirements Include:

Mandatory Participation of a Local Bank: 

One of the shareholders of a digital bank must be an Algerian bank with recognized expertise in online banking services, holding at least a 30% stake in the company’s capital.

Headquarters Based in Algeria:

 Digital banks are required to establish their administrative headquarters in Algeria to ensure local and efficient management, particularly for handling customer complaints.

No Physical Branches:

 Unlike traditional banks, digital banks are not allowed to open physical branches. They can only set up fully automated access points for their services.

Loans Limited to SMEs:

 Digital banks are primarily authorized to grant loans to small and medium-sized enterprises (SMEs). Specific exceptions may be granted for large companies under certain conditions.

A Promising Future for Algeria

Digital banks and insurance are not just modernizing financial services; they are also redefining their role by supporting innovation and fostering a knowledge-based economy.

With the potential to double the number of bank accounts and integrate massive funds from the informal economy, this digital revolution represents a historic opportunity for Algeria. It also paves the way for a dynamic entrepreneurial ecosystem where startups and cutting-edge technologies play a central role.