ADDIS ABABA – The Digital Identification (ID), named Fyda, is on the fast track to becoming a primary ID for use by all financial institutions in Ethiopia.
The move is among the “major steps the National Bank of Ethiopia (NBE) is taking “to modernize the financial sector consistent with its mandate.”
To this end, the NBE says extensive work has been undertaken to introduce a foundational Digital ID for use by all financial institutions in collaboration with the National ID Project.
“Today, we announce the launch of two initiatives centered around the introduction of a Digital ID,” the NBE announced on Monday.
Backed by the World Bank, the government is implementing a nationwide biometric digital ID system, aiming to register all eligible Ethiopians by the end of 2025.
NBE’s first initiative targets onboarding all financial sector customers to the digital ID platform in the 2023/24 Ethiopian fiscal year (or 2016 EFY).
The central bank says the initiative will 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,” the NBE said. “As such, a Digital ID will be able to serve as a primary Bank ID and will have legal acceptance in all financial institutions.”
Parallelly, the central bank and the Digital ID Project will also implement another initiative involving “the use of the Digital ID in the financial sector’s Know-Your-Customer (e-KYC) processes.”
The ID platform, named ‘Fayda’, would offer a “reliable and real-time identity verification system,” the central bank said, and can serve as a basis for onboarding new customers and for introducing new digital products 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 NBE added
The digital biometric ID includes an individual’s name and gender, iris scan, and fingerprints, and also displays date of birth, gender, address, and photograph.
“The implementation of the Digital ID as a Bank ID in Ethiopia will significantly improve the transparency, stability, and security of the financial sector,” the NBE said, and it will also “complement national development plans geared towards establishing a digital economy.”
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