Wed. May 22nd, 2024

Africa Records It’s Lowest Drop In KYC Crypto Fraud.

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Latest report from a leading pan-African identity verification provider on the State of KYC report H1 2022 examining the different KYC processes as well as fraud trends noticed in Africa shows a significant drop in KYC fraud in Africa crypto ecosystem.

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The “Know Your Customer” (KYC) process is a requirement that helps businesses identify their users and verify their credentials. KYC allows companies to identify risks associated with individual customers before they happen. Central banks often require KYC checks to prevent financial crimes like money laundering. For fintechs, online payments companies and e-commerce, KYC can prevent fraud.

The first is serial submitters, people who use an identity repeatedly to collect on a reward. Minimizing these losses is as simple as limiting signups or checking to see if IDs have been used before.

Also Read: KYC Process in the Crypto Space.

Database infiltrators are more dangerous. They have gotten access to authority databases. The fraudster creates as many apparently genuine identities as they want. The company says face biometrics is ineffective against these attacks.

There are larger fraud dangers plaguing the world, but duplication fraud can have outsized economic impact, and biometrics can have an equally disproportionate effect on curbing it.

According to the report, “This fraud can only be caught using biometric de-duplication.”

Plus, addressing duplication fraud now would be a better investment than trying to contain it later.

Looking at identity fraud as a whole in Africa, the picture is not as bad as it is in other regions of the world. The payoff-to-effort ratio dissuades large-scale ID fraud.

Smile Identity says that began changing during the pandemic. Fraud attempts grew 17 percent comparing 2019 to 2020 and 20 percent from 2020 to 2021. It grew 26 percent comparing all of 2021 to just the first half of this year.

Fraudulent KYC checks included biometric fraud and data validation errors when comparing to government ID databases.

Unless addressed, identity, including biometric, fraud is going to grow because the amount of money at stake is growing.

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