Know-your-customer (KYC) innovation and integrity

Know-your-customer (KYC) innovation and integrity

March 27, 2019    
Read our latest report with the Alliance for Financial Inclusion (AFI) exploring KYC innovations

It is estimated that approximately one billion people across the world do not have access to an officially recognisable identity. Most of these people live in developing economies. The ability of a person to prove their identity is fundamental to their active participation in political, social and economic life.

Without a trustworthy identification mechanism, an individual may be unable to exercise their range of human rights as set out by international law and convention. This is of particular concern for marginalised individuals, such as forcibly displaced or stateless persons and other vulnerable groups who lack the most basic forms of identification.

These people are also prone to being excluded from accessing and using financial services that are key to their livelihoods. Furthermore, the accurate verification of identity is integral to the KYC processes necessary for compliance with anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations. The inability of financial institutions to properly verify prospective clients will lead to financial exclusion, and high levels of exclusion are a threat to the financial integrity of economies.

Read our latest report here, with the Financial Sector Deepening Africa (FSD Africa) Risk, Remittances and Integrity programme. This work was commissioned by the Alliance for Financial Inclusion (AFI) under the Digital Financial Services Working Group (DFSWG) to explore KYC innovations across a number of AFI member countries. The report highlights technological and regulatory innovations in KYC that have led to financial inclusion and improved social outcomes, especially for marginalised groups like women and those who have been forcibly displaced.

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