The National Bank of Ethiopia (NBE) and the National ID Project have agreed to roll out a Digital ID for all financial institutions. The move is part of NBE’s plan which aims to modernize the financial industry while fostering financial inclusion and preserving market stability.

In the 2023/2024 fiscal year the first project between NBE and National ID intends to onboard all consumers in the financial sector into the digital ID platform. By lowering entrance barriers and adhering to legal and technical protections, such as cyber-security and personal data protection standards entrenched in the current legislative framework, the move intends to improve financial inclusion. All financial institutions will be able to accept the Digital ID as their primary Bank ID.

The second step is implementing the Digital ID in Know-Your-Customer procedures within the financial industry. In order to onboard new consumers and launch new digital products and services while reducing associated financial risks, the new digital ID platform "Fayda" offers a trustworthy and real-time identity verification method. The usage of e-KYC procedures can lower obstacles to financial access significantly and raise service delivery standards.

Ethiopia's use of the Digital ID as a bank ID is expected to considerably increase the financial sector's transparency, stability, and security and support national development initiatives aimed at developing a digital economy.

Source: Fana BC