KYC, in its most basic level, is an acronym for Know-Your-Customer. In the KYC stack, there are important attributes to note- you may need to capture customer data; verify the identities of customers or to simply identify the customer’s location, so that you would always be able to track him/her.
Therefore, KYC connotes harnessing data for critical business decision making. In his recent interview with ICT Editors, in Lagos, the Managing Director and Co-Founder of Seamfix, Chimezie Emewulu, spoke extensively on e-KYC, arguing that the process can’t be complete until the captured data is verified. Excerpt.
The concept of KYC
The concept is rooted in the ability to understand more about your customer. Customers vary per industry or organization, including individuals, other organisations, youth/adults. KYC offers you a better way to safeguard your brand.
On the other hand, knowing your customers’ birthday/marriage anniversaries, etc, offers you something to leverage upon for personalised service. So, the investment of organizations in KYC, from the point of enrolment to the entire lifecycle, helps them to provide better services.
Considering their nature of operations, which organizations should implement KYC solutions?
Like I said earlier, KYC is about organisations or institutions understanding their customers vis-a-vis customer’s details. The KYC journey begins when you are meeting/enrolling the customer for the first time. If you are in the financial sector, the law mandates that you implement KYC. In the banks for instance, when you conduct transactions that transcend certain thresholds, you are required to report for anti-money laundering, to enable agencies like EFCC to track when certain crimes are committed.
Thus, identifying the people you’re providing services to is particularly important if your services are quite sensitive and involves certain human risks. These range from Telcos (telecommunication companies) that need to know their customers through and through, to the power sector that is required to have details of electricity consumer’s identity/details for billing purposes, etc. So, it is sufficient to say that many sectors and government organisations need KYC.
The range is very diverse. Schools need to have details about each student down to the knowing the parents/guardian- I am referring to the crèches, primary and post-primary schools. Seamfix has noticed that even a tailor wants to know the details of his/her customers. If they can have such details they can even offer services on credit. Some of them still work manually; when the papers are lost, the transaction is over. But a proper record keeping process will offer them insights about the customer and enable them to provide specialised services.
Also, if you consider that humans are dynamic and personal data change over time – for instance, my surname today might change tomorrow; Marriage, change of location, economic status, etc. Thus, we would realize that there is a need to periodically update your records to be sure what you know about the customer is still valid.
What Are the processes of conducting KYC?
The depth of information you may require varies from one industry to another. For instance, the banks and Telcos: these are two sectors we are actively aware of that operate a lot of KYC activities, albeit requiring different data. Overall, similar basic information is often required, such as personal data and some form of identification. So, the nuances come depending on industry and organisation.
The second step is typically to verify what has been provided; to ascertain how correct the provided information are. Trust cannot be established until verification. It is at this stage that some organisations would hire agents to conduct a manual verification of the data provided. Therefore, the revalidation could be quarterly, annually, or as in some cases, dependent on the stipulations of the law.
How Important Are Fingerprints To KYC?
Fingerprints are a core part of the KYC framework, especially if it is a regulatory requirement. This is because fingerprints are very sensitive information to collect and difficult to alter as well. Past experiences show that most people/organisations capture data without necessarily verifying the ID (identity) they collect. So anything passes as ID, especially when you are collecting information en mass. Capture and verification go hand in hand, like inseparable twins. Organizations would therefore do themselves a whole world of good by doing both – to capture and verify. Fingerprints help to achieve this equilibrium in identity management by availing you correct information about individuals, especially for future references.
Tell us more about e-KYC?
e-KYC serves to ease the KYC process. Electronic KYC (e-KYC) is a systematic and seamless approach to obtain and update someone’s data without needing to be physically present. Recently, a bank sent a general SMS to its customers, asking them to revalidate their records. Customers were required to visit banking halls to be able to revalidate their records. However, it was possible that they updated their records from wherever they were. All they needed was to somehow ‘ID’ themselves and for the banks to verify the data supplied.
Another instance occurred while trying to perform a transaction- transferring school fees to a cousin’s account. The transaction failed with a message that the recipient’s account could not receive such amount (it was above the stipulated quota). So, you see a situation where someone cannot receive funds due to a cap on the account; but imagine if there was a health emergency and funds can’t be transferred. This is where e-KYC comes in. If the bank had such a system in place at the time, it could have easily allowed the cousin of mine to provide information that could be validated against a database and ultimately an account upgrade. Instead, we had to wait for the beginning of a new week for a staff to go to bank and do the necessary update before the transfer could be allowed. That’s time wasting and unnecessary delays which e-KYC would have handled.
So, as a KYC company, we have built an e-KYC platform that will allow both the capture and verification of information. We are also working on an upgraded version that will enable you to verify any document with regards to the physical address. That will solve the full stack of requirements in the KYC industry.
What do organizations stand to benefit from e-KYC?
It boosts customer retention index. Although there are times when businesses try to implement KYC and customers seem inconvenient with having to provide so much information. However, through a seamless platform, they wouldn’t get the feeling that you have invaded their space, instead it makes them feel related. That also points at comfort and convenience. It increases reliability. Remember in most cases, it is a machine that makes the automated decisions. So, it can easily automate without necessarily human interferences.
How does SEAMFIX’s e-KYC solution operate?
We are providing the platform for organisations to obtain important information from customers. It is a suite of solutions comprising BioRegistra and Verified.ng. The data capture solution is BioRegistra, while verified.ng is an extension for verification. e-KYC is a means of capturing and verifying data electronically. For us to combine both processes, we provided the suites. Don’t forget we are in a mobile-first world where convenience is key. So, any organisation that wants customers to get real-time service should cue into doing things electronically.
How is any information, textual and biometrics, validated when they are entered into the system?
If you give me a voter’s card or national ID, the first step will be to identify the card information, including textual details and biometrics. The second level is to verify; to ascertain what is contained in the card. It should basically confirm, or reject, who you claim to be, as the case may be. Now, we are integrated to the BVN system and are able to validate against its database. Other systems in the country are work-in-progress.
How flexible is this suite?
I will explain this using an example-we have an organisation that uses BioRegistra to manage information about its staff. We worked with them to configure the specific details the business required- from names to address, qualifications, etc., and because BioRegistra has a mobile app, all the agents in their offices around the country are integrated. They hire new staff en mass, across the country- blue collar workers, using the platform to conduct KYC. The beauty for them is that even if they need to transfer the staff from Sokoto to Lagos, they have the data in one place and can confirm against the BVN that the data provided are in order because data is now cloud-based via BioRegistra.
Any final remarks?
It is important to note that failure to implement a KYC system slows down the rate of customer acquisition by businesses, especially because the process is manual in nature. So, businesses need to automate KYC processes such that they can acquire customers on the go; and Seamfix’s KYC stack are trusted in the marketplace.