Nigerian banks want to use social media for KYC
Social media has emerged as a powerful tool that transcends geographical boundaries and brings people together.
Beyond its role in connecting individuals, the platforms have become a valuable resource for sourcing information, improving risk management as well as enhancing customer experience.
Little wonder that most foreign banks and firms are using it to strengthen their Know Your Customer (KYC). Adhering to international standards, the Central Bank of Nigeria (CBN) has now directed commercial banks to obtain social media handles and digital identification of customers as a mandatory KYC policy in the financial services sector.
The new directive according to the apex bank is targeted at strengthening the fight against financial crimes as contained in the CBN’s Customer Due Diligence Regulations 2023 report, which was posted on its website and addressed to all banks and other financial institutions in the country.
But, with only about 31.6 million active social media users in Nigeria, as of January 2023, per data from Statista, one wonders how the CBN plans to implement this policy since there were around 133.5 million active bank accounts in Nigeria, as of 2021, according to data from Nigeria Inter-Bank Settlement System (NIBSS).
By requesting social media handles as part of the KYC process, financial institutions would be able to leverage the information available on social media platforms to enhance their due diligence efforts as well as enhance security, and improve customer experience.
As banks continue to adapt to the digital age, utilizing social media for KYC verification will become increasingly important.
