VerifyMe Nigeria CEO calls for greater collaboration to enhance KYC compliance
Industry operators and stakeholders involved in the know your customer (KYC) chain in Nigeria must close ranks if there is to be improved compliance with KYC regulations and best practices, says Esigie Aguele, co-founder and chief executive officer of digital ID solutions company VerifyMe Nigeria.
At the same time, improved KYC compliance could help boost Africa’s growing market for cryptocurrencies.
Aguele was speaking alongside other experts during a recent exchange with journalists in Nigeria on the situation of KYC compliance in the country, reports national daily Vanguard.
The outlet quotes the VerifyMe Nigeria boss as saying greater KYC compliance within the financial system, for instance, will reduce the high amount of fiscal crime, such as money laundering, which is harmful to the country’s economy.
Talking about money laundering, the CEO mentions figures which show that the losses suffered as a result of the practice are huge in Nigeria and globally.
The global economy loses $1.6 trillion through money laundering annually, while in Nigeria, the figure is between $15 million and $18 million, says Aguele, alluding to different sources.
“While government and its regulatory organs are making concerted efforts to confront the challenge, the reality is that technology is ever evolving and criminals are constantly on the lookout for ways to circumvent existing structures. Particularly in Africa, regulation and policymaking must proactively evolve ahead of the new techniques and technologies deployed by the criminals,” says Aguele, according to Vanguard.
To Aguele, the rate of compliance among many companies in Nigeria is still very slow, a situation he believes is partly as a result of the fact that “the internal systems of many companies are not yet digitized or because the companies are mainly focused on a high-risk subset given the high cost of conducting full KYC in the country.”
As a suggestion, the official holds that developing a strong culture of KYC compliance should not be only an issue for regulators. Industry operators, he says, also have a role to play as they have to be able to “understand the regulations and policies put in place to protect the system so that they can secure their own internal processes and also advise their users rightly.”
Aguele acknowledges the complexities that come with full KYC compliance such as anti-money laundering regulations (AML), but he believes a deep understanding of all the processes involved, including data collection and management, is vital.
He cites the example of his technology company VerifyMe Nigeria where their tier 3 address verification solution has been developed for end-to-end agent monitoring.
The company said last October that its VeriFind solution had done more than 200,000 ID verifications for KYC and AML.
KYC and the crypto industry in Africa
Meanwhile, an article by Forbes underscores the importance of KYC in Africa, the challenges as well as the underlying opportunities, especially for the crypto industry which is strongly finding its feed on the continent.
The article notes that it is impossible to participate in crypto without KYC. However, there are a number of stumbling blocks hindering the process, one of which is the fact that hundreds of millions of people on the continent still lack a legal or digital identity. Other problems raised include issues with biometrics matching for people with different skin tones, as well as difficulties in address verification systems.
These difficulties notwithstanding, there exist avenues for growth, notes the article, with strong KYC collaboration mechanisms highly recommended.
The burgeoning and youthful population of the continent is one of those strong points which can be capitalized on, as is the need for extended collaboration by regulators and other stakeholders, not leaving out improved service delivery channels and more efficient identity verification frameworks.