Stakeholders within the digital identity and finance space have been charged to work together to establish a holistic framework for open finance in Africa.
This was contained in a keynote speech delivered by Esigie Aguele, Co/founder and CEO of VerifyMe Nigeria, a digital identity and KYC technology company, at the just concluded 5th Edition of the Africa Tech Summit held in Nairobi, Kenya.
Speaking during the Decentralized Finance (DeFi) session of the summit, Aguele noted that open finance, backed by a strong digital identity infrastructure, was key to bridging the gap between identification and financial inclusion to achieve results at scale for the over 500 million people living in Africa without a recognized form of ID.
He said: “In an increasingly interconnected world and with the rise in peer-to-peer transactions, facilitating openness, transparency and lower costs is key.
Digital identity will be critical to drive this. Thankfully, open finance initiatives such as mobile payments are already making the difference for many of the 85% of unbanked adults in Sub-saharan Africa. However, we need accelerated action to achieve results at scale.
“In Nigeria for instance, digital identity has the potential to unlock opportunities from open finance initiatives that will address the 16 million home mortgage shortfall as well as the insurance and auto-loan markets which are under-scaled at 0.3 to 0.5 penetration on maturity and have the potential to grow to $800-$1b industries.”
Elaborating on how digital identity will impact open finance, Aguele stated: “Undoubtedly, the regulatory systems of Web2 have proven to be insufficient for the growing pivot to Web3. As operators innovate around standards to provide holistic digital identity solutions, we are witnessing a scenario where regulators are pushing back against any fully decentralized privacy methods especially if it denies them access for security, oversight and governance.
“Accordingly, while proper regulation is necessary to standardize and grow the ecosystem, it is critical to ensure a balance, such that regulation aims at enabling, and not stifling, innovation. I see a future where there is increasing convergence between innovators and regulators to work together to find solutions that work for all parties without compromising on standards, quality, identity privacy and ownership,” the VerifyMe founder added.
VerifyMe Nigeria is a leading digital identity and KYC technology company powering open finance across Africa. The company provides a range of trust-based digital identity solutions to help businesses seamlessly onboard customers and scale.
The Africa Tech Summit connects tech leaders from the African ecosystem and international players to drive business and investments forward on the continent.
The event attracts a network of stakeholders including tech corporates, mobile operators, FinTech, DeFi & crypto ventures, investors, leading startups and regulators.