KYC (Know Your Customer) protocols are difficult to follow in Africa, where much of the population does not have official forms of ID. These KYC tech companies are working to change that.
A huge swath of the African population lacks any form of identification. This makes it difficult for financial institutions and other companies to conduct KYC (know your customer) protocols and the issue spills into various facets of life, leading to financial exclusion and denial of government services.
KYC guidelines, including government regulations, are meant to prevent unlawful access to the banking system and typically include anti-money laundering requirements such as verification of customers鈥� identity, and assessing their risk factors. KYC protocols also are used by a variety of companies to prevent fraud and theft.
More generally, all sorts of interactions with enterprises like banks and insurance companies require some form of identification, which in turn makes the onboarding experience difficult for many customers.
In countries that have official forms of identification, they are typically paper-based, which makes them difficult to use for businesses using newer, digital services.
The growing threat of identity theft has also left many institutions without the appropriate tools to do proper KYC checks.
However, technology including mobile phones, aided by internet penetration, is opening up opportunities for start-ups to offer KYC solutions to businesses across the continent.
鈥淓fforts to improve national identification systems in African contexts have coincided with the increasing deployment of mobile technology, leading to some actors promoting digital 鈥榮olutions鈥� for facilitating forms of identification and registration 鈥� often via biometric attributes,鈥� according to a by Research ICT in Africa. The report estimates that 500 million people in Africa lack a form of identification.
The same report said that digital identity can enable enterprises to improve service delivery, as well help individuals by enabling them to be visible to the state and therefore be eligible for services.
Even though Africa is yet to see a major undertaking in fully digitizing identity, there are some companies that are already making impact in the private sector, enabling companies to fulfil their KYC mandates. Here are the top six.
YouVerify
Year Founded:听2017
Headquarters:聽 Lagos, Nigeria
Founder: Gbenga Odegbami
What they do: 聽One of the biggest issues that financial institutions deal with in Africa is the lack of proper documentation for their clients and the leaves leeway for fraud. Youverify is a digital solution that gives enterprises such as banks the ability to identify customers. Its identity access management enables financial institutions to be efficient in disbursing services without worrying about identification issues. YouVerify draws on big data from telecommunications companies and government institutions to confirm identities of clients. See their story here.
Competitors include: VerifyMe
Customers: Mostly banks and financial institutions
Why they鈥檙e a top KYC company: The use of big data from telecommunications companies and some government agencies has highlighted the usefulness of this information for identification purposes. The company鈥檚 platform helps in financial inclusion as it streamlines the KYC process for busy enterprises like banks.
Smile Identity
Year Founded:听2017
Headquarters:聽 San Francisco
Founder: Mark Straub
What they do: 聽Smile Identity is a US-based but Africa-focused digital identity start-up looking for ways to introduce identification metrics in a continent that lacks universal IDs. The company provides real-time digital KYC, identity verification, user onboarding, and user authentication across Africa. Using machine learning and artificial intelligence, the platform provides face detection, face verification and face deduplication suited for African faces.
Competitors include:听驰辞耻痴别谤颈蹿测, VerifyMe Nigeria
Customers: Payment companies, financial institutions including digital banks and telecoms.
Why they鈥檙e a top KYC company: Smile Identity ID Validation covers over 250 million identities across Africa. They have partnered with growing companies such as Chipper Cash, Paystack, Paga, Flutterwave and Kuda.
VerifyMe
Year Founded:听2013
Headquarters:聽 Lagos, Nigeria
Founder: Esigie Aguele
What they do: 聽Fraud detection is a much-needed solution for the financial industry in Nigeria, Africa鈥檚 most populace country. VerifyMe uses facial recognition solutions to enable banks to conduct contactless account opening and onboarding of new clients. The company also offers credit score services for banks and financial institutions, in the loan approval process.
Competitors include:听驰辞耻痴别谤颈蹿测
Customers:聽 Banks and financial institutions.
Why they鈥檙e a top KYC company: Firms can also conduct a know-your-employee process using VerifyMe鈥檚 OneIdentity report, built on the largest work history database in Nigeria.
IdentityPass
Year Founded:听2021
Headquarters:聽 Lagos, Nigeria
Founders: Lanre Ogungbe, Niyi Adegboye and David Obi
What they do: Identitypass is a digital compliance and security company. It offers businesses a platform on which they can validate the identities of customers they interact with. According to the company, identity theft increased by 53% from 2019 to 2020 and continues to increase.
Competitors include:聽VerifyMe, YouVerify, Smile Identity
Clients:聽 Financial institutions
Why they鈥檙e a top KYC company: IdentityPass uses face recognition technology and integrates data from national identity cards, voter cards, and driving licenses to ascertain the identity of customers. Their technology is also designed to protect users from having their identities stolen.
ThisIsMe
Year Founded:听2013
Headquarters:聽 Cape Town, South Africa
Founders: David Thomas,聽Juan Furmie,聽Nadeem Shahid
What they do:聽 ThisIsMe provides companies with a way to onboard customers and automate background checks. They use trusted global sources, biometric and social media data points to identify people in real-time, according to the company. ThisIsMe offers individuals a way to control their identity data and verify people when interacting online.
The firm also is unique in identifying corporate and business entities and ascertaining their data. They verify incorporation information, financial licenses, creditworthiness, directors and beneficiaries and check them against watch lists.
Competitors include:聽Smile Identity
Customers:聽 Individuals and corporates
Why they鈥檙e a top KYC company: The firm has been able to work with big corporates to ease onboarding and KYC requirements. The firms include Old Mutual, Stanlib, Sanlam, Marriot and BET.co.za.
BACE Group
Year Founded:听2018
Headquarters:聽 Accra, Ghana
Founders: Arinze Christopher, Charlette Desire, Jean Cedric Attiembonon, Samuel Sowah Mensah
What they do: 聽BACE enables financial institutions to do due diligence on their customers using facial recognition. The company allows users to take a selfie, which is matched with the official ID of the person to ensure their identities. The company offers an API service that allows companies to configure their own identification checks.
Competitors include:聽Smile Identity
Customers:聽 Financial institutions, event managers, educational institutions.
Why they鈥檙e a top KYC company: Complete with facial recognition, BACE Group also uses artificial intelligence in processing data points that it collects. Its use of smartphone selfies could appeal to the younger generation.
