KYC verification: What companies in Africa should know

In 2021, over 80 financial institutions throughout the globe paid $2.7 billion in fines regarding anti-money laundering (AML) failures, at a median of $34,151,237 per agency.  These firms have one thing in widespread: a flaw in their customer verification course of which will be manipulated for fraud and different unlawful monetary actions. 

Even in Africa, prime monetary establishments resembling Access Bank Nigeria and GTBank have additionally obtained large fines for breaking AML and counter-terrorist financing  (CTF)  legal guidelines at completely different instances, additional underscoring the significance of AML and CTF compliance. 

Whereas KYC checks are sometimes related to monetary establishments resembling banks, nearly all companies that make funds or rent firms to make funds on their behalf have to implement a KYC course of. Brokers, non-public fee platforms, fintech instruments, or wire transfers want to make sure that KYC varieties a part of their onboarding and monitoring processes. 

Monetary establishments and a few industries are required to implement KYC processes by legislation, however these procedures are hardly ever as easy and simple as they appear. Why is that, “ ID verification has no one-size-fits-all strategy for all companies”,  Ibukun Adeleke, Retention Analyst at Dojah, mentioned on a particular version of TC Dwell held on the thirty first of January. She defined that ID verification has many varieties/methods, so whereas in some industries, the ID verification course of could also be honest, within the monetary sector it’s tougher as a result of it’s a extremely regulated business. Nevertheless, the ID verification processes should not uniform now because of the lack of requirements and finest practices in knowledge assortment and a few customers don’t have the appropriate paperwork for id verification. 

Getting one of the best practices in verification, might not occur now however it’s good that buyers and customers, together with companies, have gotten more and more conscious of the worth of information, Ibukun Adeleke mentioned. 

What companies have to find out about ID verification, “KYC might not fully eradicate fraud nevertheless it may scale back it to minimal ranges, which is why it’s a vital course of for African companies”, Victor Irechukwu, Head of Engineering, One Pipe mentioned. He additional defined that asides from the fraud and AML elements that ID verification tackles, it additionally helps each enterprise know who they’re coping with. With the info explosion and developments in know-how, it’s crucial to confirm identities and conduct KYC to make sure that your small business is coping with the appropriate set of people. 

To assist companies enhance the ID verification requirements, Dojah, an end-to-end id verification and compliance platform, carried out analysis in partnership with TechCabal Insights, the info and analysis consulting arm of TechCabal to look into the ID verification and person onboarding tendencies in Africa. This report was put collectively to critically look at the  Know Your Buyer (KYC) panorama and easy methods to navigate the challenges confronted with buyer verification in Africa.

To get extra insights on the present state and way forward for Africa’s KYC ecosystem together with tendencies resembling using digital strategies for biometric authentication, obtain the report within the link here.