Financial Crime World

Kenyan Fintechs Must Verify Customer Identities and Search Beyond Account Holders to Combat Financial Crime

The Kenyan financial technology (FinTech) sector is under pressure to prevent financial crime, and to achieve this, FinTech companies must verify customer identities through reliable documents and data, as well as search beyond account holders to identify beneficial owners.

FATF Recommendations for Kenyan Fintechs

The Financial Action Task Force (FATF), a global anti-money laundering (AML) and counter-terrorism financing (CFT) body, has issued recommendations for Kenyan FinTechs. These guidelines aim to prevent shell companies and other structures used to disguise illicit funds.

Adopting a Risk-Based Approach

Kenyan FinTechs must adopt a risk-based approach when implementing AML/CFT measures. This involves assessing the level of risk associated with each customer, transaction, or business relationship and taking proportionate mitigating actions.

  • Verify the identity of customers through reliable documents and data.
  • Conduct due diligence on customers, including Politically Exposed Persons (PEPs) and individuals from high-risk countries.
  • Monitor transactions for suspicious activity and report any irregularities to regulatory authorities.

Collaboration Key to Success

Implementing the FATF recommendations requires a collaborative effort between regulators, FinTechs, and traditional financial institutions. Regular dialogue and knowledge-sharing can help identify best practices and address challenges.

  • Industry associations must organize training programs for FinTech companies on AML/CFT compliance.
  • Provide access to essential resources and guidance.

Leveraging Technology

RegTech solutions can streamline AML/CFT processes, making it easier for FinTech companies to comply with regulations. Cloud-based platforms can provide sophisticated tools and resources without requiring significant upfront investment.

Public Awareness Crucial

Educating the public about financial crime and the importance of AML/CFT measures is essential in empowering citizens to identify and report suspicious activity.

  • Public awareness campaigns through media channels and community outreach programs.
  • Build trust and encourage wider adoption of FinTech services.

Conclusion

Implementing the FATF recommendations in Kenyan FinTechs is crucial for reducing the risk of financial crime, enhancing regulatory compliance, and increasing customer trust. Continuous collaboration between regulators, FinTechs, and traditional financial institutions is essential to maintaining a robust AML/CFT framework.

If your FinTech organization needs assistance in complying with FATF requirements in Kenya, reach out to Youverify, a leading provider of compliance solutions. Book a demo today and take the first step towards securing your business.