IDC 2025 - Digitization of the Financial Sector in Ethiopia

11:00AM Jan 21, 2025

Speakers:

Keywords:

Digital finance

Ethiopia

FinTech

mobile banking

digital transactions

financial inclusion

cybersecurity

regulatory framework

digital transformation

payment gateway

QR code

AI

blockchain

data analytics

financial ecosystem.

Digitization

Financial sector

Ethiopia

MSMEs

Access to finance

Digital footprint

Fintech collaboration

ATM operators

Conversational banking

Alternative data

Nano and micro customers

Financial inclusion

Digital transactions

Business operations

Cyber security.

So he's not here on downtown, not yet, right, okay,

I think you're supposed to cover on the Ethiopian financial sector digital strategy, because there is a need to strategize this digital change and maps in the whole nation. But I'll pass to our second presenter, Mr. Mirka durma, who is the CEO of Sega media that I got so far, but you should have a lot of things to say. He'll be presenting for a couple of minutes on digitization of the financial sector. He will shed he'll he will share us his experience

on what they did in shenga media and

basically what the digital landscape looks like in Ethiopia. And after that, we'll be hearing from Mr. Bazama, who is a director of payment applications in ethos. And I think he'll share us what the FinTech and startups are doing in Ethiopia, the whole ecosystem and how they're actually basically operating. I believe this will be actually very important and informative for all our attendees and for myself. And then we'll have a panel discussion, which we'll share from the two presenters, plus Mr. Sudha, who is the Director of Information Security in CBE. CB is the biggest, the largest bank in Ethiopia, and you would definitely share us what they're doing in the transition of the finance plus the security issues that what they've been doing, the risks and possible ways to mitigate. So now I'll leave the floor to Mr. Yes, I think you have your slide, right? All right. I

Good afternoon and welcome. Thank you for being quick. Introduction, Dr bakal,

my name is mal Kama. I'm the Chief Operating Officer of shega media and technologies. I'll be discussing presenting about digitization of financial service sector in Ethiopia. But for going to that, since it's after lunch as well, let me try to share an interesting story that I usually share in areas related to transaction, digital transaction, cashless transactions. How many of you did you know that almost 18 years ago, in 2017 The Economist magazine predicted an end to the cash era? Well, the message could not have been clear right after 1000 years of during technology as as as a transaction, cash

is going to disappear in the next decade, and have

the magazine illustrated a big, magnificent dinosaur made of coins, right? So they were predicting casual disappear in the next decade, and and have and that was in 2017 now fast forward, 2025 18 years later, that prediction has not arrived yet. And personally, I don't think it's going to arrive anytime soon. We can discuss that later, but it also highlights the potential that's untapped yet for financial service providers to, you know, innovate and provide more financial services, digital payment services, so that it's, you know, cash based transactions can be converted into gradually converted into digital transactions. So that was something I found very interesting when it comes to where digital transactions are going whether cash is going to disappear anytime soon or not? Having said that, I will be covering a few topics I

will be discussing about, what are the key indicators

when we say digitization of financial services or digitization of the financial sector in Ethiopia, I will be also touching base on the Ethiopian Digital finance ecosystem with a specific focus on the role of fintechs. And I will also share you a bit of highlights on the drivers of digitization of financial services or the financial sector. We'll also discuss about the challenges that are existing in Ethiopia, and we'll have a couple of takeaways from our presentation, but in the middle, I'll also discuss about data and analytics. A bit of better reason to put that in the slide. I will come to that in a moment. So talking about key

indicators, this is not an exhaustive list, but I

think those four

key indicators tell us a lot about digitization of financial services in Ethiopia, as you can see, the first one is digital finance minus okay. Thank you. Thank you.

I think this is much comfortable. So digital financial services adoption,

we can talk about mobile banking, mobile money, payment gateways, data lending, among others. We will come to the details next in terms of Ethiopia's context. But the other key indicator that I found is critical when it's when we speak about digitization of financial services, the volume of transactions that are being conducted, it could be in terms of values and volumes. Third innovation and technology, yeah, about investments being made on technology and other startups, as well as financial inclusion, account ownership and usage among different demographic groups. Those four are the key indicators that I have selected to explain our digitization of financial service going on in Ethiopia. But other indicators are still relevant, such as, what does the regulatory environment looks like, the customer services and things like that. But those are the key indicators that I think are more relevant for our today's discussion. A quick snapshot in Ethiopia in terms of digital adoption, I've put some

key numbers that you can take away as of

June 224, these are the data that

I've collected from National Bank of Ethiopia, et switch and

Fs Ethiopia. There are 190 8 million digital accounts of all kind in Ethiopia. Currently, out of that, almost half, around one, 10 million of them are mobile money accounts. 47 million are mobile banking accounts. The rest are debit cards and internet banking services in terms of transaction currently in Ethiopia, close to 8 trillion mobile banking and wallet transactions are income conducted annually.

Means around

7 billion

timber per day, or around 8 million digital transactions in terms of count, in terms of innovation and

technology, as you can imagine, new startups are flourishing. Tech companies are coming up in all the areas I have noted there, FinTech, agri tech, Education Technology, Health Tech e commerce, media and logistics, job to take, just to mention some in terms of financial inclusion. Currently, the data shows 45% of Europeans have back accounts as 60 million mobile money subscribers and 782 financial access points per 100,000 adults. What are the drivers of digitalization of financial sector? I have put three core areas at the top. You can see government initiatives. That's one of the key drivers. I believe it's about enabling the digital financial inclusion policy and regulatory frameworks. In the context of Ethiopia, we had a national digital payment strategy that was enacted in 2021 and as has just come to an end, in 2024 that was version one, and version two, I believe, is going to be launched anytime soon, that that's my prediction. Along with that, for the first time in the country, non bank institutions were allowed to provide financial services with the use of technology. And within that, two types of directives were issued back in 2021 core payment instrument issuers and payment service providers. So now fintechs are coming to the space of banks and and providing financial services with the use of technology. So we can mention those key aspects in terms of government initiative, and next in terms of mobile and Internet penetration. Again, there are some statistics you can refer to 60% of adult population Ethiopia are mobile subscribers. Currently, internet penetration, mobile money penetration is also close to that. And along with that, we use demographic in Ethiopia, as in other African countries, is useful in tech savvy who are ready to embrace digital solutions, close to 40% are under the age of five, and around 30% of them are between the age of 15 and 29 just give you a bit of highlights on what Ethiopia's Digital finance ecosystem

looks like.

This was the data that we have compiled a year ago. I believe there might be some changes by now, but it will pretty much covers what's happening on in the country, as you can see, there are different payment service providers, consumer fi intake providers. Under that, there are a lot of categories, as you can see, along with that, you can see also mobile money providers, some are tail COVID, some are bank packed, and some are independent. Well at the bottom you can also who are the key telecom operators and who are the organizations that are enabling this ecosystem. When we come to the role of fintechs, I think have to speak about MSMEs as well. In Ethiopia for the last 10 years, of all businesses that were registered, 98% of them were MSMEs. Imagine MSMEs are critical to an economy, not only in countries like Ethiopia, but elsewhere in the world, they contribute a lot towards the GDP in terms of employment and things like that. But the problem is they lack digital footprint to get financial services, and fintechs are there to fill that gap with different solutions. Again, the role of fintechs is also exemplified in terms of financial inclusion. In places where banks have not accessed people these days are accessing financial services we just meet the use of their telephones and phone numbers, as I just mentioned earlier, this number has went up a lot in recent years in Ethiopia, along with that, fintechs also bring enhanced efficiency, innovation and competition into the financial

ecosystem.

Having said that, I want to touch base a bit on

data and analytics, which I think is going

to be the next frontier in terms of accelerating digitization of financial services in Ethiopia. Now, different kinds of financial service providers are flourishing. That's one thing, and they are producing a lot of data. Using those data for better decision making will put organizations in a better position in terms of navigating the competition they have, in terms of understanding their consumers, in terms of monetizing different investments they have made, as as you can see to the right side, I have, I have put some key areas where financial institutions, including FinTech, banks and telcos, can, in a way, they can transform the kind of data there be they are producing into different insights, which is again going to help them as they make decisions as they expand markets and things like that. There is a specific case study that I have mentioned underneath. I don't know how many of you know this, but there is a site in Ethiopia, which is called fstop. It's a place where most of digital finance data is aggregated, analyzed, and is providing insights for individuals, innovators, entrepreneurs, banks and others. You can also go to the site and visit the information that's provided in terms of challenges. So we have seen some successes that still need to be open about what are the challenges we have in terms of digitization of financial services in Ethiopia, I've put some five key areas here. First one is infrastructure and network efficiency. I think a lot has been said in the morning the other session, and again, informal digital financial activities, which are going to affect the formal digital commerce, I think are going to be some of the challenges that we need to tackle as a nation, sir. I believe financial awareness issues is critical as well. A lot is being advertised, but we still see financial awareness gaps, both in the cities and in rural areas and level playing fields. So as I mentioned earlier, there are different kinds of fintechs. For example, some are government owned, some are private. Some are telecom based. Some are back bank packed. But unless the playing field is equal for all competition will be affected and grows of those specific organizations as well. So that is, again, one of the key areas that needs improvement in this country, I guess. And lastly, cyber, cyber security concerns, since a lot has been said about that in the morning as well, I'm not gonna go in detail into that, but addressing these barriers is crucial for the continued goals and impact of fintechs, not only fintechs, but the continued role of digitization of financial services in Ethiopia. Key takeaways, I think, as the numbers tail as well, Ethiopia has made significant strides in terms of DFS, adoption, financial inclusion and tech innovation. However, collaboration, collaboration between the governments, financial institutions as well as fintechs is essential as and third, there should be a critical focus in in terms of accessibility, to ensure these financial services are being provided to all with equitable access. And last, I think leveraging data and analytics for better decision making will be will take financial service providers, or will take our financial sector to the next frontier, having said that the future of digitization of financial services in Ethiopia As a financial sector and Ethiopia is not something that has been finalized. A lot needs to be done, and I think some of the discussions can also be made during the panel. Thanks so much for listening. I will hand over to

thank you.

So we're not used to podiums. We just teach,

like horizontally. No, no one is you know that, right? Okay, thank you. Thank you for your presentation, and

of course, we'll have questions, especially experience on the

financial inclusion and what I've been doing so far. And let's hear to second presentation Mr. Beza mamo. I've known Beza for, probably for four years or more, and now he's the director of payment applications in 80 switch. I think the 80 switches the company which makes transfer across banks, right? And they say 80 switch didn't settle yet. So they owe me some money because I tried to take money from awash but they didn't give me. Commercial Bank said they should give me back. I think he'll give me back today. So Beza, I'll invite him to present FinTech startups and companies and what the landscape in Ethiopia looks like. You

for the introduction, Dr Bucha and hopefully we will

manage your claim.

Yeah, so saying this already, I'm introduced is Amadou, Director payment application at switch. So my presentation today is about the fintech startup companies. So I will go through some basic points, and then, along with the basic definitions, historical backgrounds and models, then I try to link with what has been happening here in Ethiopia. So as everybody knows, the FinTech is. It is a blend of two words, the financial and the technology. This is a common phenomenon. So when we thought of fintech startup, these are companies that that try to strive the financial services to the to its customers, and mainly the financial services they struggle to provide is disruptive as compared to that of the traditional mechanisms of actually sending and receiving or managing all financial aspects. So for that the there are several technology drivers, which I'm going to deep dive in subsequent presentations, like the blockchain and other important techniques, AI the the Bitcoin and so forth. So let's have some historical view. So even if it is a new world, a buzz nowadays, but the the assumption that the fintechs are back date to the 80s, late the 80s, all right, so this side is in terms of the technology progression. The other side tells you about the use case they actually deliver after the execution of the fintech startup. So FinTech 1.0 is assumed to be the foundation where there is actually a telegram and more codes, and actually the early foundation for the transfer between institutions and across across countries as well. So the next development is a FinTech 2.0 which is the traditional financial inclusion where, or financial technology, sorry, where these are actually relies on the brick and mortar, not necessary to to bring, actually a cashless, but a cash light, because there is ATM online, and actually there is also credit card and so forth, so and the core banking system invent during this period. Then after actually the two 2008 is the demarcation where the global, especially the western, face a crisis, where they call it the mortgage, right? So after that, most financial institution thinking dramatically in another way, and instead of investing on the brick and mortar on the branches, it will be good to strive and drive those actual financial services online. And actually there are a lot of technology that comes and emerge, like the rise of mobile banking, cloud computing, big data analytics. Then comes the globalization, where the API and interoperability across a border services emerging, and this is actually more drive by the blockchain because of the distributed ledgers, so the accounting or the ledgers of the financial services are linked each other, so that the verification, the validation, the authentication and authorization and other services are also derived via the blockchain technology. Now we have at the cores era that is the FinTech 4.0 which is a disruptive since 2082 present artificial intelligence, machine learning and open banking are the new phenomena. And I think we are not hitting this one, especially the open banking is not yet come to us. So this is simply in terms of the technological progression. The other side is

in terms of the use case execution. As you can see,

from late 90 to early 2000 the electronic banking and online stock trade platforms introduced, and now we are at the verge of actually introducing this online stock marketing now in Ethiopia, somehow we are late, but we can, we can get advantage of the available techniques in technology. Then, from 2005 to 2010 mobile payment, the peer to peer lending, where there is no financial institution, the borrowers and actually the lenders can do a contract online by using the internet infrastructure again. So then from 2010 to 2050 we have the digital currency and crowdfunding. Then following the robo advisor, which has a lot of a lot of benefits, when it comes to the decision making for financial services. Uh, yet recently, we have the register at the era where digital insurance, open banking, digital security and online lending available. So that is the overview as historical backbone to talk about the fintechs, and let us compare. Because here's we are talking about the internet as a basic infrastructure for fintechs. Let's compare, what is drivers at the FinTech side, especially the internet, and what, what is the hindrance, when we thought of the actually the traditional banks, one is operational model, primarily digital, so that it needs the internet infrastructure fully. It relies on internet. If you look at the traditional bank, this is a physical so it is actually relies on the branch and the presence of actually the customer to that location. Those are experience fast convenience, often designated for mobile. But when it comes to the traditional banks, it is actually often involved with long waiting, even for a loan approval, okay, and maker checker, usually, these are the traditional way of doing the bank services, which elongates the process for any financial service to be claimed at at that specific location. Probably it can be operational for eight hours, and then it might be closed, okay. That is also another limitation from the customer base perspective, actually take service young and the millionaires are part of the FinTech and startup. And if you look at the traditional banks, this, this, these are people who have a face to face interaction. So usually eight peoples, or we can say those who needs? Actually, the the physical attachment of the cash itself, actually there from the regulatory requirement. Of course, there are a very light regulatory requirement as compared to that of the traditional, the traditional or, I mean, sorry, the traditional banks demand stringent requirement by perspective National Bank. So, right. So that is 111, thing for actually blocking the innovation side and the speed of service instant that is slow, and the cost structure this the fintechs and startup doesn't have actually much more cost, lower cost comparatively, because the traditional bank would have the cost for renting the branches and actually for the staffs. The technology heavily technology driven. They use a legacy system. Even nowadays, the bank or banking system is at the age of like 1990 so right, we can have the ISO 8583 protocol, which is the latest one, is 9093, all right, but recently he's the digital phenomenon happened the other other standards, like ISO 222 emerging risk management, growth and others. So there is a high discrepancy comparative in the discrepancy arises as a result of the availability and penetration of internet at the end of the user the convenience. So saying this, the role of internet

infrastructure for fin tech and startup is paramount

important. One is it's actually democratize access to financial service, so no arbitration in terms of age, gender, in terms of the location of the service you can access as long as there is an internet you can access it in urban area. You can also access it in rural area, so long as you have the internet connectivity. And the other one is enhanced cross border transaction, because in the legacy system, the there is a wire, a wire transfer possibility, which takes some, some dates nowadays that that is, that is a history, right? You can have the possibility of getting the fund from abroad easily on your land, just because of the technologies that have described the blockchain and others and foster innovation and collaboration. Yeah, development happens in one FinTech or startup can be, can be a benchmark, and actually it can drive to other say, for instance, if we have an SMS payment driven by wi chart is the one just that initialize this, this sort of messaging payments with the application. Now we can have we can have the Facebook, we can have the WhatsApp and other social media networks. In terms of the category, we can have the payment services. Most categories in Ethiopia are relying on the payment services, all right, either to transfer, to pay, or actually to send and receive money, so which I'm going to describe later. They are focusing only on the payment services, but there are other areas which needs attention, like the wealth management service, like the insurance services, like the lending services, right? So the insurance service is actually it can drive electronically between the insurance company and the insurer, and it makes use of the machine learning algorithm to predict the risk level. And the robo advisors would have a lot of a lot of advantage over here, I think, to understand the FinTech in the startup the key players, one is the startup company itself. The other is the financial institution in Ethiopia. The big financial institutions are banks. Then comes the ML fi and we have also the corporates. All right, if you go to the rural areas, corporates would have much more role. So these are the financial institutions and technology companies are also Paramount important for for the ecosystem, and the trend shows, AI, Blockchain, big data analytics, okay, so they are is much more important, especially for fraud detection, air based fraud detection. So there is a heuristic possibility that you can, you can have a data, and you can train that data and can trap some malicious, or, sorry, some fraudulent transaction is leash, and the other one is a big data analytics nowadays, you know, the data is a fuel. It is an oil. The new oil is a data. So you can, you can make use of that data to predict the upcoming, the upcoming financial phenomena, or financial prediction, as well as a challenge. Usually, regulation is one challenge because fintechs should comply minimum requirements. It is not as as stringent as the traditional banks, but they are supposed to comply minimum rules and regulations and cyber security and the customer trust are these. These are challenges because they are always looking for a niche of products to a certain level of products that can address some, some, some niche of users. So they are they also struggle to address that issue. So this is a three dimensional view of the financial technology already. Probably it can be repetitive, but as you can see, we have the digital financing, where you can have a collateral, but digitally you can fund and defend the amount easily using some application. We have the digital investment, digital money, digital payment, digital insurance, everything, digital and then the upper one is the technological concept, is the blockchain, the social network. Is the near field communications, the peer to peer technologies, the big data analytics and including the cyber securities. So these are the disruptive business models, I think again, in our country, the payment solutions are more applicable. We are not yet come to the new banks. The new banks are supposed to be brought a branchless activity. Every service of the bank is supposed to be online, starting from the KYC gathering up to the up to the end services. So right now, heavily, most banks and financial institutions heavily invest on the branch instead of wi. It looks that we are in contrast to the new bank. So this, this is one model, but we don't address that one. The other one is digital lending platform, a bit started by some, some recording in progress. Providers like it, your telecom and others come up with one with this sort of services, the robo advisor, which is a back, a backing service, yet not actually to the level that we expect, but we can have this payment solution, which I'm going to describe and subsequent presentation. So one is the mobile payment. Nowadays you can see the payment. The payment can be drive using the pause, but the investment of the post is very high as compared to that of the QR. And the QR, you have the QR code being represented in a paper. So the acceptance, the payment acceptance, of QR from the investment perspective, is very much, very much light as compared to the cost devices. So right now, the National Bank of Ethiopia mandates all financial institutions to abide to specific, actually scheme. The Ethiopia defined its own scheme recently, and I think by end of February, all financial institutions make use of identical QR representation, which is relying on MV cost 3.0 definition. So that is one thing. The other one is the peer to peer payment. So person to person transfer is up and usually mobile banking between any financial institution, no arbitration. As long as you know the account, you have the possibility of pushing that one. The other one is a digital payment. It is a bit of starting, but it is not at the level of its maturity right now, because most of the services now, they especially the ecom services are drived by telegram and cash on delivery, if you experience this one than the E commerce, but there are e commerce sites like charagall Z these are e commerce sites which are available and linked with the card information. And card loss is going to be happen sooner via its switch, I believe so. And the other one is a payment processing where this is actually the settlement and disputes resolution and other phenomena. So when we look at the Ethiopian financial landscape, this is a report produced a year ago by Chaga. Okay, so there are players in the remittance, known the smile pay and cash go and Mama pace. These are players in in a remittance, usually the international remittance, not for local remittance, mobile money and payments like amole, Kacha, yanepe Belka, some of some of the institution, I'm afraid, are actually finished right now, and they are also players under the payment processing, like the something pay, RFP, you can, you can watch, Okay, gotcha, and servers, but most of the payment processing are not doing the actual payment processing. I'm afraid they are focusing on the gambling, yeah, yeah, just, you know, waiting, yeah, that is how they back up their their survival. But that is not the the only needs they can serve. There are a lot of spaces to be addressed, in my opinion, and lending and saving

the others. So the next, as I came from its switch, I think I should say something about its switch and its role. So its which is owned by all financial institutions, banks, M fi, and actually pi is the payment instrument issuers and the PSOs. So with actually the mandates given from the National Bank, the mandates are interoperable among the financial interoperability so that we are supposed to create an open loop, so no arbitration whether you are a customer of Bank X or bank y, alright, but you have a freedom to transact freely as long as the banks are interoperable across across the common platform. That is the it switch routing platform, and the other one is providing a national payment gateway, which we activate a year ago via the card, but we have other payment instruments, not only the card, but also account. Can be drived by account, it can be drived by QR, it can be drived by alias, which are a subsequent phase of project to be happened sooner, and the other one is shared platforms and infrastructure. We provide reconciliation software for all banks as long as so long as they need it. And the other mandate is the central clearing house. So the at every day for especially card payments, we match a t plus one every 24 hours. Then the inter bank are going to be the inter bank transaction going to be happening the day time, but settlement will happen once in a day. But when it comes to the instant payment switch that it is, which acquired recently, we start settling twice a day. I think since last year, February. And the other one is implement domestic payment scheme. The QR scheme is derived from its switch, and actually it is mandated for all banks by international bank. We have also the Ethiop Card Scheme, like the visa and Master Card is a card scheme we Ethiopians are supposed to be proud of say we have Ethiopic card instead of visa and others. So this is the, the execution, the road map that we are really reaching. The company established in 2011 in 2060 ATM services across all banks or happen. And in 2020 the post interoperability is realized. In 2021 the person to person actually fund transfer is happened. In in 2022

we have executed our grant project. And in 2023

the national payment gateway is piloted and convinced. And in 2024 we are now shifting our person to person to the instant payment switch that is the new phenomena. And QR is currently also drived by central eBay switch. So after, maybe after three months, you have a possibility of scanning any QR. It is interoperable. You can use any payment, any any mobile banking or any wallets. So long as you read that QR, there is no restriction, all right, you can read it using the etio Telecom, or you can read it using the CB or whatever, whatever application. So I think I have said much. These are the product portfolio that we do have, really thank you.

I thank you, Mr. Ba for the next presentation. Of course, we have many questions, and

I think let's take a break now, because if we start, because if we start the discussion and the questions, it may take long so to be active, I think I have a nice Ethiopian coffee and also tea. So let's take a coffee break for how many minutes? 15 maximum. So after 15 minutes, you'll come with all of the questions we have, And we'll have a panel session. Thank you all. You

recording stopped, whoa,

Uh, okay, welcome back. I hope we had good coffee and tea

as a nurse refreshment. I think less it's time now we will have a panel session, and

I would invite our

previous our previous presenters, merca Girma, please come to

come to the floor. And I will also invite

bazama. And I think I need to introduce another person who is from commission

bank of Ethiopia, the largest bank in terms of money and the same time, volume and number of customers, I would invite Mr. Sunda, who is the Director of Information Systems. CBE, you

okay, we have heard the presentation, but let me start from

Mr. Soym Bah, the Information Security Director of CBA, and with the topics that we have been discussing, which is digitalizing financial sector as a leading commercial bank in Ethiopia, I would like to ask, what is the status of CBE in terms of Digital finance and digital transactions as a forefront digital transformation in Ethiopia, would you share as a current status and especially, particularly What CP is doing in enhancing digital banking services? I

Okay, thank you very much Good afternoon, and thank you to having me here. Just to give a

glance about CB. Current status. CB is, as it's mentioned, the largest bank. We can say it in East Africa, not only in Ethiopia. It has like 45 million customer base and like 2000 branches, 3000 ATMs in the country, and about 47% of the deposit of the country is in CB. This just

high level status of CB, but

from digital penetration perspective, just to give you an insight, let's say, in a daily basis, we have 7 million transactions total, with all those 2000 branches, 3000 ATMs and digital channels like mobile banking, CD, Beaver, internet banking, card banking, post all out of these, 75% of the transactions are via our digital channels, which is out of 7 million transaction of daily transaction. Around about 5 million transactions are via our digital channels. Out of these digital channels, the most prominent one is our mobile banking. Mobile Banking, which is which has two channels, we using applications for Android as well as for iOS, and using USS D channels. So by now,

most

third parties around financial technologies in the country, they are integrated with these channels, including CBI and mobile banking, just to differentiate CB web and mobile banking, mobile banking is for those customers with account, whereas cbwr is for those customers which doesn't have an account, but only a phone number, so his status of CV, thank you. I think I'll get back to zoom. Since he from he sees he's

from security. He chair as

the cyber security aspects of CB, what they have been doing and the challenge they have. But before that, let me bring you back to ml Academy again for a very difficult question. And that's very difficult. I just since seeing the digital landscape, and also in the fi, in the FinTech I always wonder where we are as an Africa, where our where we are in our digital financial ecosystem, and what we have did so Far, and especially in comparing with what they did, for example, in Kenya, the M page, where they have reached in the whole East Africa, and also the Nigerian Fintech is booming. Recently, we hear stat six. And at same time, I would like you to share what you think about the global payment ecosystems. What's happening the UPI systems in in India, and also the Chinese along that I would like, if you can stress where you can see Chaga

media contributing to

bridging this deep the gaps that you identify in your answers, and to be a leader in this, in this, in this digital Finance landscape. Okay, thank you, Dr barkal, for the question, I think, from

my experience

and from my perspective, Ethiopia has has made great strides in terms of digital payment adoption when we compare to some African countries you have mentioned as well. Let's take Kenya, for example. As you mentioned earlier, I was I was mentioning 2007 where the third period, The Economist predicted in its article, the end of Kashira. That same year, M PESA was founded, or established in Kenya. So it has been 18 years since m PESA was around in Kenya. Now I believe they have close to 40 million subscribers, close to 14 million subscribers, and it has taken them almost 18 years right however early as Dr a wit was mentioning 51 million subscribers as of now, just four years. So we can compare the the, you know, the stride that has been made in recent years. Of course, coming late has an advantage as well. Sometimes, I think, given that Ethiopia has has made great strides in terms of mobile money adoption, but given the volume of the economy, the volume of the population and load needs to be done, that's in terms of mobile money. When we come to Nigeria, Nigeria, I believe, is known mostly for, course, business. Last time I checked, there are close to 3.5 million source devices in the country. That's a lot for your comparison. Ethiopia, there are only 12,000 post devices. That's very minimal. What I wanted to compare is not just the number of devices. But you know, post has two sides. There is the issuing side cards. And as a matter of fact, close to probably 45 million David cards has been issued in this country, and we have just 12,000 post devices for 45 million Naveed cards. So the acquiring side of the house is not at par with the issue inside of the house. So I think a lot has not been done in that regard. And usually the close business in Nigeria is mentioned as an example in Africa, I think it's an area where Ethiopia has not made great strides, and, in fact, better outcomes are being observed in terms of mobile money than, you know, car based transactions, apart from, you know, the digital payment options and things like that. I think a lot of FinTech laws also exist in these countries. Probably there are more than 200 FinTech companies in Nigeria. We are talking about a few. So there's a lot that needs to be done in that area as well. We need more fin tech companies innovations that create use cases for the economy in Kenya as well. There are, there are probably close to 60 or 70 in the companies. So they are making great situations that make it that is something I think Ethiopian is to progress as well, maybe looking at a bit of the global perspective as well. Let's take maybe Japan. Japan is one of the most developed countries in the world. However, their their number one national agenda is creating cashless society. So Japan is one of the developed countries with the least digital payments adoption yet. So they are cash is a king in Japan. They are very comfortable with it, but they are working towards making the society digital. So that kind of tells you, Well, basically, I don't think cash is an enemy, and we don't have to level in a way cash should disappear or sort of think there is always a use case for it. However, the experience from other countries also is also helpful. You also mentioned India, I guess. I think one critical use case that we can refer to India is the interoperability of accounts into a single interface, right? You have a single application where you can access all your bank accounts. That should be very convenient for people, because in Ethiopia, apparently the mobile banking transaction is huge. Last time I checked, the digital transaction in the country has reached almost 9.7 trillion. QPI number, and out of that six point something trillion is mobile banking. So you can see the adoption in the country. But there are different kinds of mobile banking being issued by different bankers. Having that in one platform. It's something that we can take as as a good lesson from the other countries as well. I think I've said much, but the second question you asked,

yes. So Sudha

medias and technology is an Information Service and technology company that provides an integrated media

data in intelligence service. So what we do is we aggregate lots of data from different sectors. It could be education, it could be finance, it could be agriculture, it could be health care. We provide insights for organizations, interpreters, innovators, investors, you use, utilize those insights and decide so we are in a business of elevating decision making processes in Ethiopia and beyond. We have platforms. We have we have solutions that people can use. We have a research and advisory service as well. So what we are trying to do is, there is a lot of data in the country. As you can see. Let's simply look at, for example, financial services. There is a lot of data being produced by the banks and others, right? But most of these data are in C loss. So what shed guy is trying to do is to bring that in one infrastructure where people can go to and refer, get insight out of it, and be able to decide on what to do next in whatever business they have. So that's what we are doing, and we have a specific focus for innovators. And as you as you see in my earlier presentation, as well, fintechs, education technology companies, agriculture technology companies, health tech these can utilize our platforms to be able to, you know, have an idea of what the economy looks like, what the market looks like, what the market segments look like, and can also predict out of it. So those are the kind of services that we are providing for the ecosystem. Thank you. Thank you. Thank you very much for your for your answer.

I think what I got is we

cannot simply aim for cashless without

understanding the pros and the tones. And even in the developed countries, people are tending to prefer to use cash and the same time, information is actually the fuel of the day. So whatever being processed will help us to foster this digitization efforts. I think let me come to Mr. Bah. I'll give the floor to

to our audiences,

and when, while you are presenting, you're sharing us the maturity levels, actually no, the historical advancements in the FinTech from 1.0 to four from the presentation, I think I was pretty convinced that we are around, uh, three point, something not four, but three is not even fully covered. So still, I want to ask a question. Since you mentioned that the cryptocurrency and artificial intelligence and also big data analytics are some of the advances that we see in the progress of digitalization Digital finance. Where do you see us? Because I visited Nairobi probably 23 years ago, and I was surprised to make all payments with M PESA. And I was tempted to try it this small shop, and I just bought avocado, two pieces I did intentionally, and I said, I'm paying the same PESA. And the guy was happy, and I was surprised. And now it's coming to us, right? It's coming to us. So this is actually unexpected progress in the digitization that I see, and considering what it is which is doing, how do you compare our efforts like the fintechs in flat and also in PESA in Africa. And how do we scale? Are we only here for local consumption? So how do we plan to scale to the level of Africa? And how do you see us in in the AI blockchain and big data, that's what I want to ask.

Thank you again.

Dr Bucha, so just say capture I try to

raise, of course, into

bit the FinTech 4.0

but some of the projects,

the current projects that we execute right now, like the instant payment system, or the way that that can lead us towards the 4.0 so right now, we have deployed the instant payment switch, using the person to person. Then we can go to the QR payment. We assume that the QR payments, especially the merchant presented QR is the one that drive most of the transaction at a ground level. So we can, we can expect more volume than the value using the keyword, so every merchant would have the acceptance QR that can be scanned by the different payment instrument mechanisms and then pay as you go. So we assume the merchant presented keyword is a basic driver that has this at least a cash related society in

terms of the data analytics,

we have exercised some models, but the models should be mature as you get more data. So we have a framework DeFi, especially for lending services and for our monitoring, as well as for the shared SOC, we as one of the thing that we provide as a shared platform is the shared soc. There are very few banks who own their their own SOC, but others demands the so again, the fintechs demands the security as a basic backbone for their services. So it is which is already secure a grant from building nuggets that's supposed to cover the build, build up of the SOC, if we compare our services with M PESA, M PESA is on the market for large years, as indicated by ML, but we start like back two years. The this project is so we are in a good pace, phase by phase we are going to execute. But the models they use, the M PESA model is a telecom lead model, date switch model is a bank lead model. So there is a actually, we can't compare apple to apple if M PESA is in country right now, but m PESA is supposed to be a wallet provider. So they there are restrictions. The amount to be drive by the wallet is not it's not as equivalent as to that of the mobile banking, because the mobile banking is more trusted. It is directly linked to the account. So there are some variations. Of course, I admire what M PESA is doing right now. If we consider the flutter wave, it is a sort of SDK, especially for the E com, sort of application that you can easily integrate your market place with the financial systems we brought NPG. We call it NPG the national payment gateway, where this national payment gateway is actually relies on the local currency, and if there is a possibility to have remote, remote ecom to be happen, this national payment gateway is also a gateway for other so bit of latter, or flutter wave or whatever. These are APIs that can easily integrate and drive the transaction. So we have our own SDK and API which we which we can connect to payment gateway, to payment gateway, or we can assume as hosted bridge as well. So that is the most important aspect with regard to the AI. Right now we try to implement a multi tenant fraud monitoring AI capable. So we are at the verge of executing this. This as a project. Most of the things are underway. The project is okay. Thank you. I think let me give two minutes to Mr. Because,

like security, the base for trust, so that people can use our digital system. And you remember what happened to CBE last time because of this online and digital bank transactions being allowed, but, but for the good reason all, almost all the money is recovered, so we shouldn't worry about CBE. But I want to say, with the scale of CBE, and at same time, assume there are a lot of fraud, or maybe suspicious fraud activity is being detected at your side. And can you share us a few minutes, maybe two minutes or three. What are the challenges and what mitigation strategies are

you deploying at CPE?

Thank you again, maybe as

Dr Baca raised it,

I think you remember the March 15 incident, what happens in the bank? A human error where the coders add a

line in

wrong line, so that the transaction which goes from our core banking to the one of our digital channel, which is C Weaver, is auto reversed. And so all the transactions goes to there will be auto reversed, while we are trying to address some other challenges, which is, which was reconciliations So, but all the transactions then during that period, was 100% recovered by now, and I think it's already mentioned in different medias. So this shows that I think cyber attack is, is, is expected by this time, but the the quality of an organization is resilience for cyber security, and not only for cyber security glitch that happened like March 15 to the bank. The bank has proved that it's endurance or resilience for such levels of incidents. So coming to to the digital channels challenges, I can say cyber fraud, cyber security and KYC are the major challenges in the ecosystem.

Cyber fraud is mainly

related to these days fraud lands activities are done mainly before it was like illiterate people are doing crowd productivity, like they call, they call the to the customer, and they say that to do this and do that, so that they, They, they persuade our customers to do mobile banking transaction or CB web transactions based on the series of command is given by the fraudsters by saying that you are a winner, or you have to add some data to the bank or something. So with different mechanisms, but these days, proud fraud is moving from illiterate approach to literate approach cyber. Literate approach that means malware. Fraud is malware are distributed to our customers via different channels, different social medias saying that you you get a winner. If you click this link and download or something while they're clicking that link, they're installing application to their mobile banking, mobiles or appliances or computers, then that's that malware will automatically do transactions. So this is one of the key areas where we have a challenge while tracing the fraud or fraud fraudulent many, most of the time it goes to cryptocurrencies where it is no more traceable. That is the other challenge. So maybe in terms of KYC, know your customer these days, as you know, National ID is in progress. Of course, maybe out of one 20 million or 70 million, around 70 million who are expected to have banking account or eligible for banking, only 10, around 10 million have national ID. So lack of national ID in the country, or fulfilled national ID, or complete national ID in the country, KYC becomes difficult, because these days our customers, they came with double A ID or local IDs where they can easily for Git. So someone who comes to the bank by saying Mr. Si Yoon, and when it goes to another bank or table or other digital channels, then it may say, Dr bakal. There is no single source of truth, and that is a big challenge for for digital ecosystem in general. The other challenge in the digital ecosystem is digital literacy of our customers as employees, how to manage their digital channels or digital service from the service provider side. And insider threats are very key these days, also because insider maybe employees may be manipulated by fraudsters so that they provide information knowingly or unknowingly to the fraudsters and technology limitations. For example, majority of the transactions is by USC, D, USSD and USSD channel by its inherently, it has a technology limitation. Let's say, for example, the transaction between any bank and telecom service providers, the USS D channels are unencrypted. Means like there are pin numbers who are used as for authentication purpose for transactions. And that will be easily manipulated by fraud employees, as well as someone who has a capability of sniffing that traffic. Maybe the other the trends of cyber attack is becomes is changing now, for example, we know about artificial intelligence, but these days, artificial intelligence are used for attacking. Also, you can generate your own phishing email easily using artificial intelligence chat, GTP, you can create malware using artificial intelligence easily. So the ecosystem will create not only for the good players, but also for producers. So also a new terms, called prime as service. For example, you can acquire malware as a service with small money, ransomware as service, phishing campaign as service, key logger as service, where you can manipulate or monitor someone's key log, for example, in my mobile if you install that malware, then someone can easily capture what key I type after I open my mobile banking, so that they can Capture my pin number easily. So these are the major challenge areas where the digital ecosystem is impacted. For example, previously, my friend is or presenters, they raised about QR code, but the new fishing technique is called Q fishing, where you can be easily fished using the you will not just scan every QR code you get, otherwise you will end up with malware or spywares where you can be easily manipulated by those spywares. So as a big challenge is data leak, where our employees, knowingly or unknowingly, they can leak data to to the dark web. So these are the major areas, but the emerging or the future also is more worse, for example, quantum computation. Look at the crypto graphic technologies that we have using these days. For example, if you configure IPsec or VPN, then you may use as or DS or something where we have a cryptographic computation based on the current computational capability of our computers or computer systems. But after quantum computing is realized, then this all crypto cryptographic technologies will be easily manipulated. So these are the major challenges and what is doing to address this emerging ecosystem. So just to address some of the way forward, this that I, that we suggest, is for in general, for fintechs, cryptocurrency players in the market, we should have a framework, a governing framework, where each cryptocurrency owners or FinTech should be governed by but that has some gaps these days, coming to the bank. The bank is following standards like ISO, 27 001, and 2022, currently, it's already certified fulfilling or the Ninth Street controls and PCI. This is nice. These are the framework as the bank is following and and state of the art principle like zero trust architecture is followed in just to mention zero trust in little zero trust has five pillars. One of the pillar is identity, where, who is accessing my systems. And do I know who think at what time from where as identity, like privilege, access management, identity, access management, these technologies and processes frameworks need to be implemented in an organization where zero trust is implemented. The other pillar is device identity, where which devices are connected to my critical systems, core banking, digital channels, so we have to identify which devices are there, so and network segmentation before we have a trusted, based approach, yeah,

inside, outside and DMZ demilitarized zone, so whatever inside communication, East West communications are trusted, but with zero trust approach. There is no trusted network will trust after verifying so that north to south, east to west, traffic should be well monitored and manipulated. So micro segmentation should be well implemented, focusing the critical systems. The other pillar of zero trust is application and data. Data is data. Leak protections should be implemented in the bank. We have already implemented these zero trust application areas, principles like or processes like security clearance are very vital and very important so that any system in when it's acquired from outside or developed from inside, in house, because it goes to customer or goes to life for production purpose or use, it should Pass the security clearance of the bank and including third party integrations and others.

Other is related to Fraud Management. We have implemented state

of the art proactive based Fraud Management

Technology, where we can monitor the behavior of our employees as well as our customers, so that we can detect abnormal behaviors and respond or protect our customers not To be manipulated. Principles like secure by design. It's a before implementing any technologies, we have to review the high level design, the low level design from security aspect, so that we have to follow the zero trust principles, architectures, secure by operation. Any change in the bank should pass through change change management process, secure by operation, secure by demand. These are the principles that we are using to secure the ecosystems. Moreover, like treat intelligence these days, with all these controls applied, we might have a data leak where our customers credential or employees credential will be sold in the dark wave. So we have a dark wave indulgence where we can detect leaked credential, including leaked hard information, for example, if we launch e commerce in the country, then the E commerce means the card number, expiry date, CbV number, and others. If someone gets this information, then he can do transactions without your knowledge. So we have to have like manufacturer authentication techniques as well as we have to have a Dark Web Intelligence techniques. So last but not least, but it's critical and key to collaborate with stakeholders like telecom operators, because fraud starts after they did the fraud, they vanish within 20 minutes. For example, if I fraud, Dr Barrack has money, then I'll send the money to some telecom operator, then from the telecom operator, maybe to some cryptocurrency, then I branch, because I don't have single source of truth when my account in the cryptocurrency is Mr. X, while my account in telever Is Mr. Y. So even for legal enforcement, it's becomes too difficult. So the basic principles to because now this digital ecosystem is increasing, but in order to maintain it and make it a trusted digital channel ecosystem, we need To have well organized governance as well as like National ID, that's it. Thank you. Thank you very much. I think he highlighted the whole cyber security framework should be from people to process and also technology,

and it also needs governance. And security should be by design, not something that we add up. So thank you for sharing what CB is doing. I think now let me give a chance to our audiences. I think we have few minutes. So not few actually, we have around 20 minutes. Yeah, 20 minutes or more. So if you can raise your questions, I can give you the chance to ask Nora reflects. If you have anything to add one up for a question or a comment or yes, please introduce yourselves when you ask your questions.

I My name

is and I am a great fellow students

in dandigo school. And my question

as a Mohamed, my name is Marik Zuru and Marx, I'm a grateful students in dandigo school, okay, yeah. And my question is, you have mentioned that you like the solutions to this fraudulent activities might be like a quantum computing and quantum cryptography, and have you implemented any of these in your banking systems? That is my question. Anyone else i

Yes, we're not a lot, so we should take advantage of the time. Thanks so much. My name is kabadu

belaccio. I

am an IT professional,

just enthusiast in what's happening in Ethiopia in terms of Internet and Internet based services, particularly FinTech, is of very special interest to me, because a couple of one or two years ago, I had a chance to interact with payment gateway systems for raising donation, systems for the bird as well as for victims of conflict, is in michael.com specifically so at that time, when we were trying to establish that The only solution we had was to use external payment gateway, service provider, the limit of the flatter wave looks like. Since then, ETP has progressed in developing and implementing various services of its own, like the commercial bank. So my question is, this being a financial system, security, as many of you mentioned, is very important. Their standard. Is there a body that regulates the qualities, the requirements of financial transaction systems. Is there a national body? I know you mentioned the standards, like the DSS and so on. You might be doing that on your own, but there should be a national level regulatory body that kind of accredits each system. So is there a certain body, maybe National Bank, or the Ethiopian standard agency? I don't know. I just want to know a little bit more about that. Thank you so much. Thank you, sir, please. Hello. My name is fo and I'm an

aspiring entrepreneur, hopefully in the fin tech scene.

So it was mentioned

earlier that India and Japan are somehow more progressed than Ethiopia, and I've been to so what can I can comment on is, for example, in India, UPI, or United payment interface. It's the common thing that people, most people, use. You can buy from a street vendor, I don't know, like the lowest thing, you can buy for 20 or 10 rupees and use the UPI, and that came from the Aadhaar card, I think the fi da or national ID, right now what we're trying to implement, they have had that for almost two decades now in India. So it was much easier, I think, to implement the UPA. And also the government incentivized and pushed the UPA implementation on the people, much like us, as a duty, rather than as a choice, that we could probably follow that as well. And in Japan, you have said that it's cash is king. But also we have to recognize that they use some crypto currencies as it is acknowledged. For example, you can use Bitcoin to buy, for exchange, to gain from the 18 motions, and as such. So I think first of all, as as a nation, we should focus on the infrastructure first, and then the rest can come. For example, once fi DA is, I would say, 80% 90% populated in Ethiopia, then we can have the UPA, the United payment interface, or the QR code, much like at a faster rate, I would say. So my question is, in some nations, post motions and a team or vending machines, it's a type of vending machine, basically. So do we have any plans on privatizing that like sector, and if there's any progress towards that, I would let us know. Thank you anymore, no one else, thank

you for giving me the chance. My name is sepu. I'm working on a startup in FinTech, the Hulu, okay,

my first question is from, my name is, name is Ali AB sepu. I'm working a new startup that for Le Hulu, in FinTech. My first question is from regulatory and policy framework, what are the current regulatory challenge facing the digital of financial service in Ethiopia? The second question is, from technology and infrastructure, what technology infrastructure is necessarily for the success of successful digitalization of financial services in Ethiopia. The third one bill will be for Mr. Segu in financial inclusive, inclusive part specific strategy should be implemented to ensure that women and marginalized community benefit from digital financial sector the force the false questions from security and trust, what major need to be taken to ensure the security and privacy of customer data in digital Financial Service, the last and last, but not least, future trade. What emerging technology do you see as having the most significant impact on the future of financial in Ethiopia, also in the collaboration of ecosystem development? What's collaborative effective between government, financial institution and tech companies are essential for serving digital financial ecosystem. Thanks for like people are getting

wrong. Thank you very much. My name is FIDU. I work in the investment space.

Actually, my question is concerning

cryptocurrencies, the cryptocurrency sector, it is lightly mentioned, but not loyal to very well, even though there is no regulation, the National Bank of Ethiopia has no regulation concerning the cryptocurrency ecosystem and market, but there are a lot of informal activities here in Ethiopia as well, and some literature says it is the future of financial inclusion and democratizing The financial sector. So in this regard, I don't have any moment or opinion from the panelists concerning the regulation, how it's going to be actually developed in the future in Ethiopia. So if there is anything, especially from Mr. Beza is from the switch and envy, I want your insight and selection suspect. Thank you. I think we could talk to you to respond to I think, yeah, we can respond. Let

me reiterate the questions and redirect to the panelists. I think Marx

question was, I think,

let me send it to Mr. SIU. Are you using quanta, quantum crypto, quantum cryptography, and if not, what's your plan? I think I should redirect it to you. And I want to redirect fellows questions about maintaining the quality of transactions. What where is the regulator, the regulatory body, and that we see that qualifies transactions, and I think it should be for Beza or I think Melka or Baza, both of you, but I have a question for him. So

you take the question, okay,

and let me go to

right, yeah, she mentioned that experience and the need for find a national ID. But still, the question is, unless we have this infrastructure data itself, we don't, we're not going to proceed because experiences are mostly encouraging and also creating Regulatory Sandboxes for innovation. That's what you shared, and thank you for what you have shared. I think you don't have question do you? I Yeah, yes, yes, yeah, privatization of items and course machines,

yeah, I think to you, yes, okay,

the last question, not the last the first question is a lot of concept questions. Actually, I'm fine with them.

I think link takes

these two depends about the legal framework in digitizing and also what infrastructure, infrastructure, infrastructures are actually needed. One of them is a national ID, the QIC, the customer due diligence is very important. That's already mentioned. Is there anything that you want to add? And also would like you to emphasize on by adding the question, so the question of Mr. Shot to on whether National Bank has regulations or policies regarding crypto crypto currencies, because we see some activities happening which are informal, and same time you see the government pushing that we shouldn't use this technology. Because they are open for money laundering in other terrorist financing. But still, we see people sending money to M PESA from blockchains. Recently, I just found out, and I was surprised. So is there any regulatory framework that you want to share with that if there is, or if you know, if there is any under development, we'll be happy to hear what you see. Another one is financial inclusion. I think I should add this to Dr Mr. Sium, financial include inclusivity for women, and also the use, I think, in most of the presentations, it was mentioned, more than 40% of the Ethiopian population is more with from age 15 to 35 right? That is actually the productive, the productive age that we see. So how do you make this possible? I don't know who is going to address, but I think I'll redirect it to Mr. Sioux. But anyone I would like to jump in, because, like for information, you know, less than 2% of the Etho prime population is having financial access of credits. Also don't know me, but the Jon, I to say that. Used to say that so equitable access, financial access, to all the citizens introduce us. We don't have record and we cannot use the technology, is actually a critical problem that needs addressing. So I think I'll redirect this to Dr CEO in making sure how women disable, disable people with disabilities, and the use with very ambitious, yet with no collateral to gain money from the formal banking. Then they're banked and Zander served people. At this point, I want someone to reflect on it, anyone, but I will redirect to Dr Mr. And then I think others will react. The question is, I think about the privacy, right? I think it's kind of addressed with Mr. Sium, but he can reflect, how do you maintain process? The fifth question is, what is the low hanging fruit technology that we can use for Financial Inclusion, especially digitization of finance? I think that's a good thing. I think I'm assuming, since Elias came from LA Hulu, he also wants to know the low hanging fruits for startups. I think that's also same true for so I think this one should be for Mr. Beza, and I may also reflect at the int if they are not addressed, yes. Mr. Srim Tampere, then, yeah. Malcolm,

okay. Thank you for questions.

Just to give you insights about

quantum and normal computation, for example, some some cryptographic technologies there they are so called weak or insecure or vulnerable. For example, M def. They are no more used, but with normal computer, those encryption algorithms are decrypted maybe within one year to decrypt one encrypted data. But still we call it wi just comparing quantum computing

with normal

let's say for, for example, if we have,

you know, RSA encryption array, say encryption, one of the asymmetric encryption widely used if you have a racing encryption with a bit of 2048, 2048 bit with normal computer, approximately it takes like 300 trillion years with normal computer, which means literally, it is impossible, but with Quantum Computing, you can decrypt it within eight hours, just eight hours. So CB didn't do anything, because that quantum computing is not yet realized, but what we will do is the wallet is impacted with that technology. So when we have to advance our technologies, we have to advance that technology as well. So technology enhancement is a key, along with the with emerging technologies, these what I am saying, but the future is more worst AI, for example, were widely advised to use Cloud. Were widely advised to use AI, yes, but with AI, for example, if you type, I am the CEO of this bank, and I want the information of all the employees, then if it will give it to me to the wrong person, that's it. Every information will be leaked. So we have to have a workaround. When we acquire or adopt solutions, we have to adopt it with the control. Do we have control? For example, if we have to move to the cloud, you have control on our data. There is a saying which says, What if it rains in the cloud. Means, what if, if our internet exchange point is attacked or disconnected means our service will be out. So do we have or can we continue our service with the emerging technologies, implementing or acquiring those emerging technologies? That's the question that we have to answer some questions in relation to women children, in a just inclusiveness is just to add few points. From CB side, I think all the bankers, they are having a women's account or children's account with better incentives or interests. This is what I know, just to promote our Women's and Children's to have an account or a bank, so the same will, I think will continue with to empower them. How we can in relation to privacy, we are using different parameters, for example, multi factor authentication, tokenization, encryption. These are some of the technologies that we are using to ensure that, for example, an employee, if he's not meant to see the customer's data, then he will be accountable for why he saw it. So we have different control mechanisms and policies and procedures guidelines, where only allowed employees will see the data of our customers. Moreover, we have a data leak protection mechanism where employees data like customer ID, phone number and other PII information will not be leaked to anyone without the the approval of the bank. So these are the some of the the pointers that is raised we assume. Thank you. Okay, thank you. Just to reflect

the thoughts and actually questions that directly forward to me

so to respond to Mr. Cabados question, yeah, we have the national payment gateway. So the national payment gateway do have its own standard in terms of technology, it is fully need to be comply with the three Ds technology. The three Ds technology is a technology whereby there is a need to implement a factor of authentication as and when it is required. So there are laws that are challenge flows, so that we just kept that that standardization, especially if the user is first time use the service of E commerce or changing the devices. So based on the memory information, there is another layer of authentication to be in place. But if the device is the same, and we ensure it becomes a smooth transaction, not a challenge flow transaction, this is with regard to the technological requirement, but we have also other requirements there needs to especially ecom sites should have an extensive review in terms of the INSA requirements. It should be reviewed every six months. So every merchant site should, should get a certification from the national security so that is also the standardized body that we make use of as a second proof of assurance. And with regard to the integration, we have a possibility of integrating payment gateway to payment gateway, so that that is actually, if the payment gateway is supposed to save the data of the customer, should be comply with the PCI, DSS, so the data should be encrypted at rest, at transit and on use. Those principles should be kept for payment gateway to payment gateway, and we have another mechanism that is the hosted payment page, where directly the ecom is going to be connected with our national or NPT national payment gateway to respond, I don't know, maybe ml car or myself. Probably ml card can go on. The privatization of hosting ATMs with regard to the infrastructure, yes, it is paramount important. We know the Indian practice the Aadhaar, because they have the Aadhaar the onboarding mechanism, and, of course, the first layer of authentication become very smooth nowadays. The UK is a public commodity. It is a public trait. It is not only available in India, but you have the UPI in UAE. You have the UPI in Europe. So it is a public trait because of it is capability for the identification mechanism, and one can drive the Any, any, any payment on top of this platform. When it comes to the switch it is, which is now start integrating with the National ID, and we are supposed to draft action, not directly by the individual account, instead by aliases, so that is using the phone number or that that can cover the account and but the individual can and link that information directly to specific account and multiple areas reference is also possible. So we have, we have that mechanism, but the data that we have right now at the National ID is not in a position to actually execute this. Maybe the LA Hulu? Yes, la Hulu is a previous company. Are you coming from?

Mr. Munich or

it's a startup take care of Danny.

So when it comes to the regulatory challenge, yeah, the regulatory

challenge,

the National Bank put a

very stringent requirement, not only from the technology that you own, because if you are a solution provider, your solution should be comply against the PCI, SSF, okay, software framework. There is a psi software framework, if you are the ATM or cloud issuer, probably other PCI compliance requires there, like the PCIP, if you are involved in the issuing of the customer cards. So this, this is a technical requirements, but also they deep dive into the Manning, okay, you need to have the customer compliance minimum one with this year of experience you will see, or should be this and this and this, they have that all details. So you should, you should have to get and actually look it at as your Bible if you really want to mass as a fintech. I think, yeah, the robo advisor is the new especially the AI that is the most important aspect, if new merchants comes creativity pin so you can, you can. You can provide service by your own getting

a license from the National Bank, or you can approach banks.

So banks do have the digital department, but the digital department can address everything. So in collaboration with the bank digital units, you can, you can come up with a very nice proposal, and you can collaborate so you can be a solution provider, not necessary a Pio or a PSO. I think that's it for

the crypto. The Crypto is mine, okay, probably, yeah, the cryptocurrency, the principles,

the of course, for crypto, it is, it is under the FinTech 4.0

more of

you need to have the mining when we thought of the cryptocurrency. And I know that in ICT park there exists one, one company, I do not success here, but as a national bank, the National Bank demands a centralized system. This is in contrast to the crypto. But what approach to the crypto, to the National Bank, is the cdbc, the central crypto technique, which is managed at a national level, at least not necessarily to reach out to other porters,

leftover questions that I would like to

take on, the first Being the regulation around post operators,

ATM operators, right? I think there is already a regulation for it. There was a directive that was issued, I believe back in 2021 in local companies this place can and take a post operator license. They can take at operator license. There is a requirement for it. And in fact, there are post operators in Ethiopia, as as we speak, the likes of RFP and Santee Bay are post operators. And they are, they are dedicated post operators. So, but I think a few conditions need to be fulfilled for for you know, bankers to let go of these special services for fintechs. The first one is our FinTech companies need to, you know, strengthen their capabilities, their capacities to operate this payment options. And the other thing is the banks also need to, you know, in closer to fin takes, collaborate and bring them up to speed so that they can, you know, partner and let go of some of the, you know, non core activities that the banks are currently doing, including post operation, ATM operation and things like that. But I think the bottom line, there is already a regulation for it. Probably the other that I would like in terms of access to finance, Dr Kali mentioned some sort of I think the answer lies, again, in the digitization of actions. In terms of MSMEs, example, probably, I have the data from 2021 but there are close to 2.5 million MSMEs in Ethiopia, and 98% of them established in the last 10 years. Actually, of all business registered in Ethiopia, 98% of them are Ms EMC. Now, what's the problem with MS Emes is that they don't have digital footprint, and unless you have that, it's very difficult to get, you know, access to finance, one of the pertinent issues that Ms M is facing that lack of working capital, right? So as as many get used to digital transactions, banks and other financial institutions will have the opportunity to provide finance based on the transactions that these merchants are doing. I think we have seen a couple of use cases in the past few years, but there is a lot way to go. So I would say again, a continued digitalization of transactions will eventually lead to more access to finance. I think that's one of the areas where our country needs to do a lot. Those are the questions I wanted to touch base on, but

we finance finally, what are the low hanging fruits that we can take on

again? Any solution, any technology solutions, that is based around MSMEs is going to have a lasting impact. The reason I'm saying so is MSMEs contribute probably close, close to 60% of dignity GDP, whether it is in Africa or in the US, right? And they hire probably seven out of 10 of employment opportunities. So they have the most, they contribute the most to the GDP, and yet they don't have access to finance and things like that, because they don't have digital footprint. Is the reason I'm mentioning things because it's not all about digital payment transactions and things that, things like that. How about digitizing their business operations as well? There are a lot of things that can be done, so probably our startups need to look at what can we do for MSMEs so that they can have, you know, you know, they can create better visibility of the transaction patient for financial, financial institutions and delegates from South LA fi to scale their businesses and yeah, grow accordingly. Not sure if there are any other leftover questions. Those are the ones I had. Thank you. Thank you very much. Maybe let me reflect in on some

some of the questions that raised. Maybe

one of the low hanging fruits, which is really close to financial inclusion, is, maybe, if I make it too specific, is conversational banking. Can you, since you know, there is a value in our country, and most people, they speak the indigenous language. So having access through this digital language probably conversation, because reading also is a problem, as we see in 36 so can I make the person lives right at the border where there is no education access but a phone where he can speak to and he can do transactions and at same time other activities. So conversation, banking, I believe, is actually low hanging fruit, and talking about MS, me this Microsoft medium enterprises, which are actually just registered businesses, most exactly by individuals, and they cannot have access to finance. One of the reason mission was they don't have records, digital

records.

So the other story histories that we see in other other countries. And so one of the solutions which I see forward is alternative data. Alternative data. These are the micros, by the way, and there are also the nine Nano, which we call Nano, which they have business, but they registers business, the ones that we see on the sunshine and grit we sell to all those, all those people that reach this business, but they still need money, and it's proved that they're hard working, commit and they can make impact. So how do you make sure their financial access is a big question, and if you can money, if you can solve that, then that will have a fact. But there are some attempts. They also mentioned about mutual and some banks like Oromia troop, the Amara bank, including, I think Sam recently, they have released products for nano and micro customers, for those who have registered business, and it's at the same time on research business. The amount is not much, but it can help People actually change. Sure. I warm,

yeah, yeah,

yeah, yeah. Yes,

definitely, yeah, yeah,

yes.

Yeah, thank you very much. Actually, I also want to add, I

think there's more than 40 billion

birds being dispersed for this kind of people. I have that statistic. The thing is, do you trust him? We are not sure if he's going to

but you want to use alternative data

and AI to measure whether his ability to pay anything to pay, because some people are, they haven't have the ability to pay, but they don't want to pay. So that's that's interesting. These are the two things that we can measure, but somehow selfish reasoning. In a sense, if people have money, access to finance, then they will not go to Robin people. And also, all the political problems we have may be limited, in a sense, because when you give access. Because I say Amir is a land of opportunity, because it is opportunity, equal access, opportunity. So, but for us, 2% access to finance. That's two sides, by the way. So those guys become like the bigger fish is getting bigger and bigger. So it's so unique. So, so those guys, they are getting richer, and the others are going to diminish. So this is the divide. Is actually overwhelming, and something has to be done. These are some of the first and thank you for sharing. Yeah, what I want to say to somebody we have seen what's happening from in the payment process, and also from sugar media, how they promote this digitalization in the financial sector, and Mr. So you also shared his wide experience and in the banking and also in the cyber security. And I want to thank all of our panelists and presenters, and I want you to give them a round of applause so that they can go to their seat. Thank you very much. Oh, okay, I can take the mic for you, and then once

we take the picture, we're going to give them some full gifts by the Internet Society with, I think, coffee and

a coffee mag. So let's please stand together for a nice photo. If you could step forward a little bit, I'll be there. Please stand together and look at the cameras. Where is my camera? Man, yeah, yeah, there he is. Please take a picture, and then Dr Asra will come up to hand over these wonderful gifts. And in the meantime, if your hand busy, please give Dr bah a Round of applause for moderating the conversation. He came and