Friday, October 30, 2020

Kenya: CBK bets on single clients database to rein in fraudsters

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Kenyan banks and mobile money firms are set to shift to a centralised database of clients in a proposal that aims to curb fraud and money laundering.

The platform will convert manual data on customers into electronic form, reducing the need for users to present physical documents when opening an account or conducting a transaction in a banking hall.

Customer information will be stored and accessed from a single electronic platform as opposed to the current mode where each bank and mobile phone operator has its own database.

Read MoreKenya: Mobile-based lenders pose money laundering risk – CBK governor

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The development of the platform will be guided by the memorandum of understanding that the Central Bank of Kenya (CBK) and its Singapore counterpart, Monetary Authority of Singapore (MAS), signed Monday evening.

The CBK governor Patrick Njoroge said the proposed platform will provide “an efficient mechanism that can actually deliver Know Your Customer (KYC) requirements for banks and others …or rather effectively in terms of cost and in an efficient way”.

The platform will be used by financial institutions and other regulated firms such as mobile money providers to identify their customers and verify other information before opening accounts and completing transactions.

KYC, a due diligence requirement, is undertaken by banks on their customers largely to reduce fraudulent transactions and money laundering.

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Kenya Bankers Association (KBA), the banking industry umbrella body, said e-KYC will help banks cut the cost and time they spent to individually verify the identity of clients.

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