Esigie Aguele, Co-founder and CEO of VerifyMe Nigeria, a digital identity and KYC technology company, stated in his keynote speech at the recently concluded 5th Edition of the Africa Tech Summit in Nairobi, Kenya, that stakeholders in the digital identity and finance space have been charged to work together to establish a holistic framework for open finance in Africa.
During the Decentralized Finance (DeFi) session of the summit, Aguele stated that open finance, backed by a strong digital identity infrastructure, was critical in bridging the gap between identification and financial inclusion in order to achieve results at scale for Africa’s over 500 million people without a recognized form of identification.
“Facilitating openness, transparency, and lower costs is crucial in a more interconnected world and with the development in peer-to-peer transactions,” he said.
This will rely heavily on digital identity. Thankfully, open finance initiatives like mobile payments are already making an impact for many of Sub-Saharan Africa’s 85 percent unbanked individuals. However, if we are to accomplish results at scale, we must act quickly.
“In Nigeria, for example, digital identity has the potential to unlock opportunities from open finance initiatives to address the 16 million home mortgage shortfall, as well as the insurance and auto-loan markets, which are currently under-scaled at 0.3 to 0.5 penetration on maturity and have the potential to grow to $800-$1 billion industries.”
“Undoubtedly, the regulatory systems of Web2 have proven insufficient for the expanding pivot to Web3,” Aguele said, elaborating on how digital identification will effect open banking. As operators develop standards to give comprehensive digital identity solutions, we’re seeing regulators push back against entirely decentralized privacy methods, particularly if it limits them access to security, control, and governance.
“As a result, while effective regulation is required to standardize and grow the ecosystem, it is vital to strike a balance such that legislation enables rather than suffocates innovation.”
“I envisage a future where entrepreneurs and regulators increasingly collaborate to discover solutions that benefit all stakeholders while maintaining standards, quality, identity privacy, and ownership,” the VerifyMe founder stated.
VerifyMe Nigeria is a leading digital identification and Know-Your-Customer (KYC) technology company that supports open finance in Africa. The company offers a variety of trust-based digital identification solutions to assist businesses in onboarding customers and scaling their operations.
The Africa Tech Summit brings together African and international tech experts to help move business and investment ahead on the continent.
The event also brings together a diverse group of stakeholders, including technology companies, mobile operators, FinTech, DeFi, and crypto initiatives, investors, top startups, and regulators.