In Africa’s journey toward greater financial inclusion, the role of compliance is often overlooked. In this blog, Carmia Lureman-Norton, Head of Strategic Delivery & CX at JUMO, explores how innovations in Know Your Customer (KYC) processes are transforming access to financial services. From digital verification to tiered KYC models, she highlights how technology is breaking down barriers, simplifying onboarding, and unlocking new opportunities for underserved communities—proving that meaningful customer experiences can start behind the scenes.
Want to craft beautiful customer experiences? Don’t work in financial services – or so I was told.
When it comes to people and their money, the compliance and red tape alone are enough to create various headaches. (More so when customers are already encumbered with literacy challenges.)
But while you might think that the ‘sexy’ in Fintech sits in instant transactions or digital interfaces, some of the most revolutionary advancements – especially for financial inclusion – have been on the periphery: in the world of Compliance. Take KYC, for example.
KYC (Know Your Customer) is a critical component of fintech operations because it directly impacts compliance and security, customer experience, and financial inclusion.
In many African markets, traditional KYC processes adopted by the banking sector from developed markets have historically excluded millions of customers from financial services due to barriers like lack of formal IDs, complex onboarding, and inaccessibility. Technological advancements in KYC and innovative adoption of technology by regulators have turned KYC into an enabler of financial inclusion.
Digital verification simplifies access
Lengthy paperwork and strict ID requirements make accessing financial services difficult for underserved populations. Users with advanced smartphones can access features such as Face ID, but this does not help everyman—especially in regions where feature phones remain prevalent. While 4G adoption in Sub-Saharan Africa is expected to reach 50% by 2030, a significant portion of the population still relies on basic mobile devices. However, in recent years, we’ve seen markets like Nigeria and South Africa move to accept fully digital verification and biometric KYC. The latter has further benefits for customers who are challenged by literacy.
For underserved customers, this means faster onboarding with fewer physical documents and wider access to financial products.
Enhancing security while reducing customer friction
Trust, and specifically security concerns, are one of the main reasons people hesitate to adopt digital financial services. Innovations in fraud detection and AI-powered risk assessment, like JUMO employs, ensure that customers can transact confidently without worrying about fraud or identity theft.
Technological advancements that ease the process alongside building trust stand to boost adoption and transaction volumes. Markets like Kenya and Ghana that have employed widespread initiatives to improve national ID verification and biometric authentication on mobile networks, while risking initial customer attrition, win both customer trust and that of public markets in the security of their ecosystems.
Both Nigeria and Ghana have furthered access to identification by investing in digital systems, like Nigeria’s BVN (Bank Verification Number) and NIN (National Identification Number) or Ghana’s Ghana Card.
Alternative KYC methods extend the reach
The Nigerian Central Bank allows for a tiered approach to KYC, allowing customers to use mobile wallets with just a phone number and requiring more information to upgrade their accounts and unlock further functionality. For customers, this can mean faster onboarding with fewer physical documents.
SIM-KYC, or mobile-based KYC, allows customers to verify their identity with a mobile number in markets like Kenya and Tanzania.
Unlocking Advanced Financial Services
KYC is more than just an entry requirement – like it or not, it remains a gateway to more advanced financial products like insurance, and wealth-building tools. While credit in particular has eased KYC requirements in some cases (like microlending); there are very few avenues for customers to access these advanced products without KYC. The easier and more seamless KYC is, the more customers can benefit from financial inclusion.
Furthering financial health beyond credit is a necessity for true inclusion.
Faster & smoother digital transactions
Nobody likes long wait times when signing up for financial services. AI-powered and digital-first KYC is reducing verification times from days to minutes. While this is not yet widespread, neobanks across the continent – the likes of Kuda in Nigeria and TymeBank in South Africa – use AI-driven KYC in app interfaces to verify ID, allowing customers to open accounts in minutes.
These innovations pose a win-win-win:
- Customers gain easier access to financial products and pathways to financial growth.
- Fintechs gain higher adoption rates of financial services and improved risk management.
- Central banks benefit from more secure ecosystems and greater trust in local systems.
It’s easy to focus on the product when targeting inclusion and forget about the back-end systems and policies that can make or break the next wave of financial reach. By making verification more seamless, secure, and customer-friendly, KYC advancements can increase inclusion across the continent.
