CEM REPORT, FINANCE | Riding on the success of the Bank Verification Number (BVN) implemented by the Central Bank of Nigeria, funding for a new bank identification system has been approved by the Board of Directors of the African Development Fund (ADF).
The ADF approved the sum of $8 million in funding for the creation of “The Unique Bank Identification (UBI) and Digital Interoperability” project which will create a digitally interoperable unique bank identification system and harmonised customer identification framework for The Gambia, Guinea, Liberia and Sierra Leone.
The project will commence in July 2023, led by the West African Monetary Institute (WAMI), working with central banks of the participating countries and in close collaboration with banking and non-banking financial service providers.
The project is expected to enhance financial sector efficiency within the participating countries, leading to increased access to finance and further regional integration efforts, working closely with over 53 financial service providers across the participating countries
The new bank identification system will link the banking accounts of individuals across different financial service providers.
This will allow banking and non-banking financial service providers to verify their clients’ identities on an ongoing basis (Know-Your-Customer or KYC), combat fraud, discourage loan defaulting and strengthen correspondent banking relationships. On the part of customers, KYC-compliant finance sectors will bolster trust and confidence and ultimately, encourage access and usage of financial solutions.
WAMI Director General, Olorunsola E. Olowofeso, said: the Digital Interoperability project was borne from the success of the Bank Verification Number (BVN) implemented by the Central Bank of Nigeria, adding that Unique Bank Identification will leverage existing national identification systems and help to strengthen financial integration in the West African Monetary Zone.
African Development Bank Director for the Financial Sector Development Department, Ahmed Attout, welcomed the Board approval, noting that it attested to the strong partnership between the Bank and WAMI. “Irrefutable and secure identification is fundamental to building financial consumer access and trust and overall development of the financial sector,” he observed.