Cenfri, in conjunction with FSD Africa, hosted a webinar on customer due diligence innovations for COVID-19 recovery – options, challenges and opportunities. These are the key takeaways. 

The following challenges were highlighted during the discussions:

• COVID-19 has changed the way financial risks are experienced and hence require a revamp of current AML-CFT approaches
• Increasingly limited capacity of regulators to cope with COVID-19 induced risks
• Infrastructure challenges limiting the adoption and roll-out of innovative KYC and CDD options (e.g. remote KYC)
• Limited contextualisation and adoption of recent FATF guidance on digital ID as well as guidance on COVID-19 risks and response
• Limited capacity of institutions and regulators regarding addressing risks

The following KYC and CDD options and opportunities were highlighted for COVID-19 recovery:

• COVID-19 specific regulatory dispensations and flexibilities to enable innovation
• Collaborative KYC and CDD, especially to address infrastructure limitations
• Enhanced communication, information sharing and guidance for stakeholders (regulators, business, FSPs and COVID-19 stakeholders)
• Increased sharing of financial intelligence among authorities
• Design new products amenable to remote KYC and align risk controls with anticipated higher risks that may arise due to remote KYC
• Crowdfunding to reduce remittance costs for senders and receivers
• Increased use of reg-tech to enable remote KYC (including in a collaborative way as in above)

This work forms part of the Risk, Remittances and Integrity programme, a partnership between FSD Africa and Cenfri.