1.In order to address financial crimes such as money laundering, terrorism funding, and proliferation financing, the Central Bank of Nigeria (CBN) issued new Customer Due Diligence Regulations in 2023.
2.As part of their Know Your Customer (KYC) requirements, banking institutions must collect and authenticate their customers’ social network handles.
3.By including social media handles into the KYC process, the CBN hopes to improve the accuracy and depth of customer identification.
4.Financial institutions must have internal systems and procedures for doing customer due diligence on both potential and existing clients, including infrequent customers.
5.The new requirements emphasise the need of identifying politically exposed persons (PEPs) and necessitate the verification of specific customer information such as legal names, addresses, contact information, identification documents, account kinds, the nature of banking ties, and signatures.
6.Reliable and independent source papers, data, or information should be utilised to verify customer identities, such as confirming date of birth, residential address, contact information, and the legitimacy of official documentation.
7.Financial institutions are expected to conduct searches on public registries or databases for legal persons or legal arrangements, check annual reports or relevant financial accounts, and examine board resolutions.
8.Keeping records and keeping up to date client information is critical under the new laws. Financial institutions must keep customer due diligence records, account files, business correspondence, and analysis results for at least five years following the termination or discontinuation of a commercial relationship or an occasional transaction.
9.Regular checks of existing client data are required, with the frequency determined by risk category. High-risk customers require annual reviews, medium-risk customers require 18-month reviews, and low-risk customers require three-year evaluations.
10.Including social media handles in KYC procedures acknowledges the importance of social media platforms and attempts to get important insights into consumers’ online presence and activity. This extra information enables financial institutions to more effectively identify possible risks connected with money laundering, terrorism funding, and proliferation financing.
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