Prembly Co-founder, Niyi Adegboye, on issues on digital security and KYC compliance within Africa’s private sector
In an interview with Niyi Adegboye, Prembly's co-founder and COO, he gave insights on how KYC verification policies affect businesses within the African private sector and how businesses can position themselves to solve some of these issues.
Over the past decade, Africa's digital sector has experienced tremendous growth, driven by rising internet penetration and mobile device usage. This trend has paved the way for a vibrant ecosystem of digital services and opportunities.
Despite widespread internet access, only 40% of Africans use mobile internet. Additionally, a significant portion of the population, estimated at 542 million, lacks proof of identity, creating a substantial opportunity for ID verification solutions.
These ID verification solutions play a crucial role in Africa's growing digital economy, combating fraud and boosting trust in online transactions. The African Development Bank projects the digital economy to reach $180 billion by 2025, underpinned by secure digital identities. However, many African businesses face challenges with customer verification due to data infrastructure limitations, compliance complexities, high operational costs, and limited internet access.
Fortunately, these challenges can be surmounted with the right processes and structures. Prembly, a leading ID verification company in Africa is working assiduously to help businesses do that.
In a conversation with Bendada, Niyi Adegboye, Co-founder and COO of Prembly spoke on the state of Know Your Customer (KYC) standards and ID verification across Africa. He emphasised the importance of reliable identity verification solutions for businesses operating in the region.
How can startups better position themselves to solve problems in different markets and increase their impact within Africa's private sector?
In a dynamic business environment, startups must be prepared to adapt and solve problems as they arise. Collaboration can provide the resources and expertise needed to overcome challenges more effectively than working alone. They need to be ready to solve problems as they arise, more problems can be solved by joining assets and collaborating rather than working independently because problems will keep coming. Overcoming challenges is essential for business success. By focusing on problem-solving, businesses can position themselves for growth. Some challenges must be overcome for a business to move smoothly. When businesses position themselves to solve problems, they position themselves to succeed.
What measures can businesses employ to ensure growth and stability in the private sector?
Businesses should first look out for an enabling environment that brings innovators together to discuss how things should be done. The available regulatory framework must support business operations and ensure risk mitigation. By implementing policies that encourage business growth and innovation, governments can ensure that funding is used to its full potential to drive economic development and create jobs."
What are some difficulties businesses in Africa face when adopting KYC policies?
The first difficulty stems from the fact that most African countries want to operate independently. For instance, despite being located in West Africa, Nigeria, Ghana, and Sierra Leone have distinct KYC regulations, highlighting the regional disparities in compliance standards across the continent.
The next is that compliance itself is costly. It is compulsory to pay compliance service fees before you onboard customers. Business owners try their best to reduce costs while trying to be compliant because they know non-compliance fees are higher than compliance costs.
Another issue is that millions of Africans lack a valid means of identification, hindering the creation of digital identities.
What is Prembly's role in securing the privacy of the digital sector?
Prembly aims to open up endless opportunities for individuals and businesses while enabling trust, we sit between the regulators and the regulated. We plan on working with regulators, and business individuals to provide secure access to everyone within the digital sector. We've worked with the Namibian government and the Nigerian government. We plan on working with the government of Gambia to provide digital identities for their citizens.
Following the recent Prembly and Peleza merger, how can startups position themselves for such partnerships across Africa?
By understanding their unique capabilities, startups can form strategic partnerships to expand their reach and overcome challenges more effectively than competing alone. They should seek partnerships that can help them turn weaknesses into strengths.
Why have past efforts to address identity issues in the private sector continuously failed?
One of the key responsibilities of the financial intelligence unit of every country is to ensure that suspicious activity reports are filed appropriately and early to ensure such issues are dealt with timely. But you discover that these units do not do that. Nobody's coming out to say, ‘Oh, this is what is happening.’ If suspicious activities are not reported on time, they cannot be followed up duly to ensure they do not happen again. Unfortunately, because most companies want to protect their public reputations, they keep such reports private, making it impossible to note and address such issues.
What strategies does Prembly plan to adopt to try to control these issues?
We're yet to figure it out completely. To effectively combat ID theft, data breaches, and fraud, we plan to secure government approval to collect and store data responsibly. This will allow us to make informed decisions based on reliable and secure information.