Nahimah Ajikanle Nurudeen
The Managing Director and Co-Founder of Seamfix, Chimezie Emewulu in this interview highlights importance of KYC to business decisions making and the need for organizations to automate their process of KYC by upgrading to e-KYC. Excerpts
What is KYC all about?
It simply means Know Your Customer, KYC. Organizations may need to capture customer’s data; verify the identity of the customer or just to identify the customer’s location for record purposes.
Which type of institutions or organisations need KYC?
KYC is about organisations or institutions knowing their customers’ details. If you are in the financial sector, even the law mandates that you implement KYC. When you offer transactions beyond certain threshold, you are required to report to the Economic and Financial Crimes Commission (EFCC) for anti-money laundering; to track when certain crimes are committed. Others who provide special services ought to know who their customers are.
Thus, services that can be a bit sensitive or human life is at stake at some point require KYC. The most important thing is to identify the people you are providing services for/to. Ranging from hospital that needs to know the patients; and if need be, know where they reside, to the power sector that is supposed to have electricity consumers identity/details for billing purposes.
Schools need to have details about each student down to knowing the parents/guardian.
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 processes will offer them insights about the customer and can provide specialized services.
What does KYC implementation offers today’s businesses?
Like I said earlier, it is instructive to say many sectors and government organizations need KYC. Sometimes, organizations hire people they barely know anything about. They ought to make effort to ‘knowing’ more about that person. If someone says, ‘this is who I am’, the onus is on you to dig deeper to unearth the realities. You need to provide records about that person at any given time. So, KYC is not just about being able to manually or electronically obtain data that can be verified, rather it starts at the point of discussions. One of the thrusts of KYC is increasing trust.
You will agree with me that having details of whoever you are dealing with, the better services you can provide. So, the concept is about having more understanding of whoever your customer is. Your customer could be any one, depending on the industry you operate. Customer here could be individuals, organisations, youths/adults; typically it is about empowering businesses to do more. KYC offers organizations better opportunity to safeguard their brands. Therefore, knowing customer’s birthday, marriage anniversary, etc, offers opportunities for personalized services. So, as organisations invest more in KYC, both from the point of enrollment to the entire life cycle, the better they can provide customized services. Thus, KYC is harnessing data for critical business decision making.
When is the right time to carry out KYC?
The journey of KYC starts when you are meeting/enrolling the customer for the first time. For instance, you are a school proprietor, and a child is brought for registration. The first contact is an opportunity for you to begin the KYC registration. Sometimes, we download apps; it could be for banking, news, games, etc. So, the enrollment point is critical. Across the service value chain you need KYC. At the beginning, it could be- knowing the customers basic data, but as the services increase, you might get to a level you require to know the next of kin.
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 and economic status. So, there is 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 required varies from industry to another. For instance, the banks and telecommunication industries are two sectors that do a lot of KYC. But the data they require differ. However, basic information required are such as personal data and some form of identifications. So, the nuances come depending on industry and organization.
The next step is to verify what has been provided; to ascertain how correct are the information. So, trust cannot be established if you can not verify what you have been given. It is at this stage some organisations would hire people at a later date to conduct a manual verification of the data provided. Therefore, the revalidation could be quarterly, annually or as in some cases, as the law stipulates.
Is capturing of fingerprint part of KYC?
Yes, especially if it is a regulatory requirement, because, fingerprints are very sensitive information to collect. Past experiences show most people/organisations capture data without necessarily verifying the ID they collect. So anything passes as ID, especially when you are collecting information en mass. You are supposed to capture and verify. Fingerprints give you sure information about identity, especially for future references.
Is e-KYC different from KYC itself?
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 SMS to the customers, calling them to come and revalidate their records. So, customers are supposed to visit those banking halls to do that. Meanwhile, it is possible they can update their records from wherever they are. All they need is to somehow ‘ID’ themselves and for the banks to verify the data supplied.
Also, recently, I was trying to transfer school fees to a cousin’s account. The transaction failed with a message that the recipient’s account cannot receive such amount (it was above the stipulated quota). So, you see a situation where someone cannot receive fund, due to a cap on the account; imagine if there were health situation on ground. If the bank had such system, they could have allowed the cousin of mine to provide that insight that can lead to the account upgrade and everybody will be happy. So, we had to wait for the beginning of a new week for someone 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.
As a KYC company, we have built an e-KYC that will involve the capture of information and verification. 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 are the advantages of e-KYC to organizations?
e-KYC boosts customer retention index. Most times, when businesses try to implement KYC, the customer may not like it, but through easy platform without them necessarily feeling like you have invaded their space, it makes them feel relaxed. 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 operates?
We are providing the platform for organisations to leverage to obtain information from customers for KYC purpose. It is a suite of solutions comprising BioRegistra and Verify.ng. The base is BioRegistra and the extension for verification is called Verify.
e-KYC is a means of capturing and verifying data. For us to achieve both tasks, we provided the suites. Don’t forget we are in a mobile first world where convenience is key. So, any organization that wants customers to get real time service should queue into doing things electronically.
Does the suite has feature to detect default or wrong information?
If you give me voter’s card or national ID, I will be able to check against the database to verify how authentic it is. With the new system we are going to launch, we will be able to provide a check on the address that you provide.
If you have a card, first step is that the card has information about you- pictures, facial recognition, fingerprints, in fact, it should tell that you are whom you claim to be. The second level is to verify: to ascertain that what is contained in the card are. Now, we are integrated to the BVN system to be able to validate that. Other systems in the country are work in progress.
What advice do you have for organizations on their approach to KYC implementation?
It is important to note that low KYC implementation slows down the rate of customer acquisition by businesses, because the process is manual in nature. So, they need automate that process such that can acquire customers on the go. Take the banks for example; if they adopt this platform, it simplifies their KYC processes. Once they integrate to it anybody can download the app and do a full KYC check.