Anti-money laundering, KYC penetration to rise by 70% in 2023
Penetration of Anti-Money Laundering (AML) and Know Your Customer (KYC) activities is predicted to witness a 70 per cent increase in 2023 as players in the financial industry intensify efforts to adapt to strict regulatory compliance obligations.
This is as predicted by Co-founder/Chief Executive Officer, VerifyMe Nigeria, Esigie Aguele, a leading digital identity and Know Your Customer (KYC) technology company; and owners of QoreID, a B2B identity, and consumer data infrastructure company.
He said: “The increasing regulatory scrutiny and the need to comply with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations have led to a growing demand for more robust KYC and compliance processes. As financial crime evolves, regulators and financial institutions must improve their risk-based approach to AML issues and find new tools to detect risks and criminal links.
“With regulatory progression, the industry will likely witness an increased focus on the use of technology to automate and streamline compliance processes. Artificial intelligence and machine learning will become critical in enhancing the efficiency and effectiveness of KYC and AML/CFT screening, helping organizations categorize and arrange relevant risk data while improving the transparency and traceability of financial transactions.”
Aguele also believes that the consumer analytics segment will grow exponentially, especially with the rise of several Buy Now Pay Later (BNPL) models and the widespread availability of financial loan products.
According to him: “Consumer analytics is facilitating the mainstream adoption of credit lending, open banking, and other micro-economies by providing the necessary infrastructure and tools to help the finance industry better understand their customers and provide value-laden products and services. With access to reliable and credible consumer data, financial services companies can comply with KYC regulations and streamline the process of verifying and authenticating customers.”
“An efficient and secure KYC system allows these companies to reduce the risk of fraud and identity theft, making it easier to offer credit and loans to a wider range of customers. The availability of diverse customer data also means institutions can provide better, more customized services, culminating in a seamless and enjoyable customer experience.
“In addition, consumer analytics, when utilized properly, would yield immense positive results for financial institutions as it would boost operational efficiency, create more efficient compliance procedures, and ensure the presence of effective risk management practices,” he concluded.