Why is it hard to open digital accounts in local banks?

Bank of Kigali staff help some new customers to open accounts at the head office. File

In an era where the coronavirus pandemic has forced people to stay home, people have remained with no other option but to adopt technology and do business online.

This is even truer for people who make transactions.


Demand for digital financial services has accelerated as more people migrate from traditional ways of doing things.


However, one challenge remains: people are not able to open digital accounts in local banks.


At the moment, only Equity Bank Rwanda allows its clients the option of opening digital accounts using their mobile phones without a need to go to physical branches.

Equity Bank customers are able to open an “Akokanya” account straight using feature phones through the USSD system or smartphones by downloading an application and following the process.

Hannington Namara, the Managing Director at Equity Bank said it is now the right thing to do and insisted that it is just a matter of making the right investment.

“I think everyone will head there because it is now compelling in these circumstances,” he said, referring to the fact that local banks will be forced to do it.

I&M Bank Rwanda’s partnership with Blockbonds – a Norwegian firm – also allows the bank’s clients to own digital banks through Spenn, a blockchain-based platform.

Like elsewhere, the National Bank of Rwanda directs banks to put a minimum requirement in place for people opening accounts, and this includes basic information verification.

Robin Bairstow, the Head of Rwanda Bankers Association told The New Times that a “number of banks are working on this but it is quite complex and is dependent on a number of factors.”

This, he added, includes Know Your Customer (KYC) and identification which are the most important in the entire on-boarding process.

The KYC requirements include asking clients to have a basic photocopy of one’s identification card, passport or driving license, a signature, quality colour passport size photographs, and fill account opening application forms which mostly are paper-based.

Namara argues these are things that can be done through technology.

“We invested in the right technology to allow that to open. When we established Eazzy Banking the idea was to digitize what would have brought a customer to a bank,” he noted.

On the other hand, Thierry Inshuti, the Head of Marketing at Bank of Kigali Group suggested that going fully digital when it comes to opening bank accounts requires having a dedicated centre for biometric information.

“I think the only way for banks to be in a position of allowing fully the opening of digital banks is through having a biometrics data centre in Rwanda. This can facilitate in the verification of customer identities,” he said.


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