The National Bank of Ethiopia, also known as the Central Bank of Ethiopia, along with its ID Program Office, announced an initiative yesterday. This initiative aims to establish the nation’s citizens’ use of the Digital Identification (ID) called “Fayda” as the primary identification for all financial institutions in the country.
The government is implementing a nationwide biometric digital ID system with the goal of registering all eligible Ethiopians by the end of 2025. The NBE plans to onboard all financial service customers to Fayda, the Digital ID platform, by 2024. Fayda will serve as the accepted means of accessing banking services.
The initiative, as stated by the Central Bank, aims to enhance financial inclusion by eliminating entry barriers and is one of the significant measures undertaken by the Government to modernize the financial sector in line with its mandate.
In its press release, the NBE highlighted that the process would adhere to various legal and technical safeguards, encompassing cybersecurity and personal data protection principles, which are already embedded in the existing legal framework. As a result, the Digital ID will serve as a primary Bank ID and will be legally recognised by all financial institutions.
According to the National ID website, Fayda is a robust digital identification system at the national level, offering real-time biometric authentication and eKYC for various use cases. Similar to the Nigerian Government’s BVN, individuals can obtain a Fayda Identification Number (FIN) by pre-registering and initiating the application process.
The purpose of pre-registration is to schedule a date and time for individuals to physically visit a center for data capture and entry. The entire system consists of four stages: Pre-Registration, Registration, Credential Provision, and Authentication. While the system is considered “robust”, it can also be time-consuming. The National Bank of Ethiopia (NBE) claims to provide a reliable and real-time identity verification system that can help mitigate financial risks.
However, in today’s digital era, customers expect a seamless and almost instantaneous user experience. For instance, the acquisition of BVN, an 11-digit unique identity assigned to individuals across the Nigerian banking industry, typically takes up to 24 hours after enrollment. The process involves filling out an enrollment form, which can be downloaded online, submitting it to a bank for biometric verification (fingerprint and image capture), and receiving the BVN via SMS.
Ensuring prompt verification of a customer’s identity is comparable to granting them a VIP pass for a seamless and efficient digital journey. The NBE should prioritise these requirements, minimise wait times, and uphold a high-speed digital environment.
