A large part of the African population does not have any form of identification. This makes it difficult for financial institutions and other businesses to implement KYC (know your customer) protocols, and the problem spills over into various facets of life, leading to financial exclusion and denial of government services.
KYC guidelines, including government regulations, aim to prevent illegal access to the banking system and typically include anti-money laundering requirements such as verifying customer identities and assessing their risk factors. KYC protocols are also used by various companies to prevent fraud and theft.
More generally, all kinds of interactions with businesses like banks and insurance companies require some form of identification, making the onboarding experience difficult for many customers.
In countries that have official ID documents, they are typically paper-based, making them difficult to use for businesses using newer digital services.
The growing threat of identity theft has also left many institutions without proper tools to carry out proper KYC checks.
However, technology, particularly mobile phones, aided by internet penetration, is opening up opportunities for start-ups to offer KYC solutions to businesses across the continent.
“Efforts to improve national identification systems in African contexts have coincided with the increasing deployment of mobile technology, leading some actors to promote digital ‘solutions’ to facilitate forms of identification and identification. registration – often via biometric attributes,” according to a report. report by Research ICT in Africa. The report estimates that 500 million people in Africa do not have an identity document.
The same report states that digital identity can enable businesses to improve service delivery, as well as help individuals by allowing them to be visible to the state and therefore eligible for services.
Although Africa is yet to see a major undertaking in full identity digitalization, some companies are already making an impact in the private sector, enabling businesses to fulfill their KYC mandates. Here are the top six.
YouCheck
Year of foundation: 2017
Headquarter: Lagos, Nigeria
Founder: Gbenga Odegbami
What theyre doing: One of the most significant problems facing financial institutions in Africa is the lack of proper documentation for their customers and room for fraud. Youverify is a digital solution that gives businesses such as banks the ability to identify customers. Its identity access management allows financial institutions to be efficient in providing services without worrying about identification issues. YouVerify leverages big data from telecommunications companies and government institutions to confirm customer identities. See their story here.
Competitors include: Check me
Clients: Mainly banks and financial institutions
Why they are one of the best KYC companies: The use of big data from telecommunications companies and some government agencies has highlighted the usefulness of this information for identification purposes. The company’s platform helps drive financial inclusion by streamlining the KYC process for busy businesses like banks.
Identity Smile
Year of foundation: 2017
Headquarter: San Francisco
Founder: Marc Straub
What theyre doing: Smile Identity is a US-based but Africa-focused digital identity startup looking for ways to introduce identification measures to a continent that lacks universal ID cards. The company provides real-time digital KYC, identity verification, onboarding and user authentication across Africa. Using machine learning and artificial intelligence, the platform enables face detection, verification and deduplication tailored to African faces.
Competitors include: YouVerify, VerifyMe Nigeria
Clients: Payment companies, financial institutions, including digital banks and telecommunications.
Why they are one of the best KYC companies: Smile Identity ID Validation covers over 250 million identities across Africa. They have partnered with growing companies like Chipper Cash, Paystack, Paga, Flutterwave, and Kuda.
Check me
Year of foundation: 2013
Headquarter: Lagos, Nigeria
Founder: Esigie Aguele
What theyre doing: Fraud detection is an essential solution for the financial sector in Nigeria, the most populous country in Africa. VerifyMe uses facial recognition solutions to enable banks to conduct contactless account opening and onboarding of new customers. The company also provides credit scoring services to banks and financial institutions, as part of the loan approval process.
Competitors include: YouCheck
Clients: Banks and financial institutions.
Why they are one of the best KYC companies: Companies can also conduct a know-your-employee process using VerifyMe’s OneIdentity report, built on Nigeria’s largest employment history database.
Identity Pass
Year of foundation: 2021
Headquarter: Lagos, Nigeria
Founders: Lanre Ogungbe, Niyi Adegboye and David Obi
What theyre doing: Identitypass is a digital security and compliance company. It provides businesses with a platform where they can validate the identity of the customers they interact with. According to the company, identity theft increased 53% between 2019 and 2020 and continues to rise.
Competitors include: Verify Me, YouVerify, Smile Identity
Clients : Financial institutions
Why they are one of the best KYC companies: IdentityPass uses facial recognition technology and integrates data from national ID cards, voter ID cards and driving licenses to verify customer identities. Their technology is also designed to protect users against identity theft.
It’s me
Year of foundation: 2013
Headquarter: Cape Town, South Africa
Founders: David Thomas, Juan Furmie, Nadeem Shahid
What theyre doing: ThisIsMe offers businesses a way to onboard customers and automate background checks. They use trusted global sources, biometric data points and social networks to identify people in real time, according to the company. ThisIsMe provides individuals with a way to control their identity data and verify people when they interact online.
The company is also unique in identifying companies and business entities and verifying their data. They check incorporation information, financial licenses, creditworthiness, trustees and beneficiaries and compare them to watchlists.
Competitors include: Identity Smile
Clients: Individuals and businesses
Why they are one of the best KYC companies: The company has been able to work with large companies to relax onboarding and KYC requirements. The companies include Old Mutual, Stanlib, Sanlam, Marriot and BET.co.za.
BACE Group
Year of foundation: 2018
Headquarter: Accra, Ghana
Founders: Arinze Christopher, Charlette Désir, Jean Cédric Attiembonon, Samuel Sowah Mensah
What theyre doing: BACE allows financial institutions to perform due diligence on their customers using facial recognition. The company allows users to take a selfie, which is paired with the person’s government-issued ID to ensure their identity. The company offers an API service that allows businesses to configure their own ID controls.
Competitors include: Identity Smile
Clients: Financial institutions, event organizers, educational establishments.
Why they are one of the best KYC companies: Equipped with facial recognition, the BACE group also uses artificial intelligence in the processing of the data it collects. Its use of smartphone selfies could appeal to the younger generation.
