10 July 2023 | Addis Ababa , Ethiopia
The National Bank of Ethiopia is taking major steps to modernize the financial sector, consistent with its mandate of maintaining financial stability and fostering financial inclusion. To this end, and in collaboration with the National ID Project, extensive work has been undertaken to introduce a foundational Digital ID for use by all financial institutions. Today, we announce the launch of two initiatives centered around the introduction of a Digital ID, which marks a major milestone in the country’s journey towards a digital economy.
The first initiative aims to onboard all financial sector customers on to the digital ID platform in the upcoming fiscal year (2016 EFY), offering a more robust and secure financial ecosystem for all parties. This initiative will not only benefit the existing customer-base but will also increase financial inclusion by removing barriers to entry. This process will follow several legal and technical safeguards, including cybersecurity and personal data protection principles, enshrined within the existing legal framework. As such, a Digital ID will be able to serve as a primary Bank ID and will have legal acceptance in all financial institutions.
In parallel, the second initiative involves the use of the Digital ID in the financial sector’s Know-Your-Customer processes. By offering a reliable and real-time identity verification system, this new digital ID platform called “Fayda” can serve as a basis for on-boarding new customers and for introducing new digital products and services, while mitigating associated financial risks. The use of such e-KYC processes can significantly reduce barriers to financial access and improve service delivery standards.
The implementation of the Digital ID as a Bank ID in Ethiopia will significantly improve the transparency, stability, and security of the financial sector, and as such will complement national development plans geared towards establishing a digital economy.
