Operators in the digital identity space have been challenged in optimising their services. This comes on the heels of regulatory challenges facing many African fintech operators, particularly as they expand their operations across the continent.
Speaking at the fifth edition of the Inside Identity Webinar Series (formerly Digital Identity Matters), Co-founder/Chief Executive Officer, VerifyMe Nigeria, Esigie Aguele, said African fintech companies and the broader finance ecosystem faced a unique situation.
Aguele stated that fintech firms are currently at an intersection where they crave a one-stop digital identity infrastructure that could help them scale and meet compliance requirements swiftly and seamlessly.
He added that this would create the possibility of simultaneously unlocking new opportunities and accelerating the continent’s drive towards open finance.
Aguele said: “We are fast approaching an era when there will be no separation between the different types of knowing your customer (KYC) checks, ranging from basic consumer profiling to Anti-Money Laundering (AML) regulatory demands. The industry is evolving beyond just identities for KYC, especially as it pivots beyond the Application Programming Interface (APIs).
“We see a trend where the demand for identity verification and KYC services will expand beyond merely telling fintech whom their customers are to providing further insights on what they are.
“At this stage of our evolution as a continent, compliance is a very important factor without which Africa may never be able to crack open finance. We look at it from a four-stack perspective using a technical, operational and regulation lens, with identity at the core. Even if we decide to look at comparable countries, you must go through identity, then payments, and it is the attributes of the data mined from the payments – volume, veracity, value, variety and velocity – that get you into the third layer which is data as a service, where worthiness information on customers is created before you get to the fourth layer which is the use of the data to evaluate customers to unlock opportunities in credit, lending, mortgages and others.
“Compliance is the glue that holds all of this together because the reality is that the internal analytics and due diligence that any company undertakes on its own cannot be compared to what a company like VerifyMe can do for them. For instance, we have access to government-sourced data points as well as relevant identity data.”