6 African tech companies transforming the KYC landscape

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 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’ identity, and assessing their risk factors. KYC protocols also are used by a variety of companies to prevent fraud and theft.

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 know you customer (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.

“Efforts to improve national identification systems in African contexts have coincided with the increasing deployment of mobile technology, leading to some actors promoting digital ‘solutions’ for facilitating forms of identification and registration – often via biometric attributes,” according to a report 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: 2017

Headquarters:  Lagos, Nigeria

Founder: Gbenga Odegbami

What they do:  One of the biggest issues that financial institutions deal with in Africa is the lack of proper documentation for their clients and leaves out 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 institution to be efficient in disbursing services without worrying about identification issues.

You verify 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’re 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. Its efficient platform helps in financial inclusion as it streamlines the KYC process for busy enterprises like banks.

Smile Identity

Year Founded: 2017

Headquarters:  San Francisco

Founder: Mark Straub

What they do:  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. According to the company, it 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: YouVerify, VerifyMe Nigeria

Customers: Payment companies, financial institutions including digital banks and telecoms

Why they’re 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: 2013

Headquarters:  Lagos, Nigeria

Founder: Esigie Aguele

What they do:  Fraud detection is a much needed solution for the financial industry in Nigeria, Africa’s 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: YouVerify

Customers:  Banks and financial institutions.

Why they’re a top KYC company: Firms can also conduct a know-your-employee process using VerifyMe’s OneIdentity report built from the largest work history database in Nigeria.

IdentityPass

Year Founded: 2021

Headquarters:  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: VerifyMe, YouVerify, Smile Identity

Clients:  Financial institutions

Why they’re a top KYC company: IdentityPass integrates data from national identity cards, voter’s card, driving licenses with face recognition to ascertain the identity of the customer. Their technology is also designed to protect users from having their identities stolen.

ThisIsMe

Year Founded: 2013

Headquarters:  Cape Town, South Africa

Founders: David Thomas, Juan Furmie, Nadeem Shahid

What they do:  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 also offers individuals a way to verify people when interacting online and to control their identity data

The firm also is unique in identifying corporate and business entities to ascertain their identities. They verify incorporation information, financial licenses, creditworthiness, directors and beneficiaries and check them against watch lists

Competitors include: Smile Identity

Customers:  Individuals and Corporates

Why they’re 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: 2018

Headquarters:  Accra, Ghana

Founders: Arinze Christopher, Charlette Desire, Jean Cedric Attiembonon, Samuel Sowah Mensah

What they do:  BACE enables financial institutions to do due diligence on their customers using face 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 where industry experts can use it to configure their own identification checks.

Competitors include: Smile Identity

Customers:  Financial institutions, event managers, educational institutions.

Why they’re 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.