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Nigeria on course with digital banking drive as smart addressing system suggested for KYC



Efforts to digitize Nigeria’s banking and payments landscape are taking a somewhat significant step forward, and realities on the ground reveal a couple of lapses which if fixed, will go a long way in expanding the digital ID space in Africa’s biggest economy.

While more banks are setting up digital platforms with biometrics to offer better services, customer verification still remains big a challenge, as experts are suggesting the introduction of smart addressing systems to address the problem. In the same light, some policy changes in the country including the recent ban on use of bank ID numbers known as BVNs are also said to be triggering an increase in onboarding costs for startups.

Polaris Bank launches digital platform with biometric KYC

Polaris Bank Nigeria has unveiled a digital banking platform (VULTe) which uses facial recognition technology to onboard new customers and allows them the liberty to carry out their transactions whenever they want 24/7.

According to an announcement by the bank, the digital platform offers customers total control of their financial activities such as account opening, bills payments, transfers, balance enquiry, airtime recharge and quick loans, among others, once they have completed biometric know your customer (KYC) checks.

VULTe is an application which can be downloaded from Google Play or App Store or can be used as a web application and leaves customers the choice to access banking services at the click of the button, said Polaris Bank Chief Digital Officer Bamidele Adeyinka.

About onboarding, Adeyinka explained: “To onboard, customers with BVN (Bank Verification Number) will input their BVN and take a selfie (photo of their face) which will be compared automatically with the photo on their BVN profile (via Facial Recognition – an advanced cognitive and artificial intelligence facial recognition technology).”

“Are you opening an account, setting limits on your account, verifying your identity documents, registering your biometrics, making inquiries, taking an instant loan? You are in total control – you do it at your time, at your convenience, and on your terms – you determine how delightful your banking experience will be,” Innocent C. Ike, acting managing director and CEO of the Bank said at a recent ceremony to launch VULTe in Nigeria’s commercial capital Lagos.

He added: “With VULTe, we affirm our resolve to serve the customer better and make their banking experience, more pleasurable. Therefore, we will continue to launch an array of banking products to cater to the varying needs of our diverse customers.”

Polaris Bank Chairman M.K. Ahmad said the launch of VULTe is a milestone in its digitally-led brand retail pursuits which offers customers full control of their financial service needs.

Smart addressing system good for KYC in Nigeria

The Chief Commercial Officer of OkHi, a digital ID verification solution provider, says customer onboarding using digital means can help accelerate and improve KYC processes, especially address verification, in Nigeria.

In an interview with Technext, Galen Crawley suggests that the current system which is largely manual can be replaced by a smart addressing system using a business app like that which OkHi runs. He believes this will accelerate the KYC process, especially for big businesses which have to deal with thousands of onboarding cases daily.

The digital address verification system created by OkHi enables businesses to collect addresses from the customer and verify them easily without agents, and this is done by matching their phone GPS against their OkHi address, Technext explains.

Crawley also speaks about the importance of digital onboarding, the various types of KYC methods that exist and those that businesses prefer, as well as issues of cost. He explained why he believes smart addressing systems are better that the old manual and paper-based methods for KYC.

According to Crawley, businesses can integrate the OkHi system into their apps and verify their customers’ addresses using their smartphones in shorter periods of time.

Ban on bank ID as KYC method drives onboarding cost

Technext, in another report, examines the consequences on onboarding costs of the suppression of the Bank Verification Number (BVN) by Nigeria’s central bank.

The report quotes some stakeholders of the industry as saying that the move has triggered an increase in onboarding costs as startups and fintechs have to resort to alternative methods of customer verification.

The article also notes that the move by the federal government to replace the BVN with the NIN, which was initiated back in February, comes as a big blow to many fintech startups which built theirk customer ID verification systems based on the BVN, which includes biometrics.

It however notes that although non-banks have been deprived of a comprehensive method of customer verification because of the BVN suppression, alternative methods can be used depending on the kind of business.

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