In light of the recent $5,2 Billion fine that MTN Nigeria faces for their non-compliance with customer registration regulations Inthis article I share the lessons learned in Tanzania and how they may be applicable to Nigeria and the rest of the continent.
Full disclosure upfront – I am the General Manager of the Agency division of AIM Group and the solution I will be referencing is the eKYC platform provided by AIM Group’s Projects Division. This is not a pitch but simply a perspective from an insider on how MNO’s have taken the lead in customer registration. This is not a pitch, but that said; feel free to take all of this with a hearty pinch of salt.
The story of eKYC in Tanzania began on September 25th, 2013, a day after Westgate Mall in Nairobi was officially declared secured. Immediately after the attacks the crackdown began – many suspects were difficult to trace because of poorly captured data during the point of registration and regulators let their ire be known on the MNO’s.
Know Your Customer Online Tool, Tanzania
Investigations into the mobile operators’ ‘data houses’ were initiated, arrest warrants were issued for senior staff and all types of ultimatums were made on the consequences of poorly registered customer data.
Tanzania, being a close neighbor to Kenya with a strong Communications Regulator in place (TCRA) was not immune to these pressures and very quickly a similar clampdown began on local operators.
Recognizing the opportunity we immediately began engaging with the regulator and shared a prototype and process of how we could register customers using an Android-based solution guaranteeing up to 99% data integrity – by October 11th, 2013 we had a letter of no-objection from TCRA to utilize our solution as a method of registration customers.
While getting the blessing of the regulator was absolutely necessary the bulk of the work went into operationalizing the solution with the mobile operators.
The first operator we talked to was Vodacom, they were excited but explained that a superior registration platform was not a competitive advantage (this has changed over time) and that they would only go ahead if we could get all the mobile operators in Tanzania on board.
To summarize, in a period of 16 months we managed to get Airtel and Tigo on board to a pilot we invested in jointly, agreed on commercials and successfully rolled this out to a significant number of their agents. So far, approximately four million customers have been registered on the eKYC platform.
Tanzanian context aside, looking at what is happening in Nigeria at the moment and specifically the fine that MTN has just been slapped with I think there are some clear messages that the regulator is trying to communicate and lessons to be learned from our experiences.
Although the fine seems hefty, to look at it from a regulatory perspective it is a clear signal that the Nigerian Communications Comission (NCC) want “compliance to be taken seriously” to use the words of AIM Group’s Projects Division GM, Paul Bomani.
“The fine is high but the regulator is trying to show that proper customer registration isn’t simply a box-ticking exercise but is a necessity to have an evolving sector”.
Paul goes on to say “What is most interesting here is that the operators are not seeing this as an advantage. We went through this in Tanzania and the operators took a leading stance. Customer registration is now actually driving their businesses forward, adding to the bottom line and making them the leaders in identity verification”.
This is where I think the lessons are to be learned – in Tanzania, what started as purely a compliance-driven exercise has begun to unlock many hidden opportunities. As in many developing countries, universal ID is not fully implemented and having verifiable methods of identity verification can sometimes seem impossible.
Using a solution like this, mobile operators are now on the leading edge of identity and are in fact collaborating with us to explore how they can actually utilize their databases as the verification authority given they are far outpacing any other form of customer or ID registration in the market in Tanzania.
Clean, verifiable data has opened up conversations on driving efficiency in retail payments and creating models of programmatic mobile marketing. All of these opportunities have been unlocked through simply taking compliance seriously and effectively, driving the bottom line and cutting the high costs of inefficient paper-based or USSD methods.
The point of all of this is not to show you how great a platform eKYC is or isn’t but rather demonstrate that in technology-driven sectors what is required is for the industry to lead innovation through support of regulation. It is not the regulator’s job to determine how to practically operationalize customer registration but simply to mandate it.
If the industry unites and actually takes the leading role there is money to be made and efficiencies to be earned, thus I am reluctant to actually sympathize with an operator that simply says effective customer registration is not possible or is too expensive – that is just a signal of laziness in an industry which has relied on baseline services to drive profits for too long and is struggling to find their new, evolved role.
There is a lot Nigeria can learn from looking at Tanzania, there are opportunities that can come into play with every form of regulation for all stakeholders and most importantly there are lives that may be saved.
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