On The One Hand
If a business has dynamic employees, the business will survive in any terrain. Many surviving businesses – that have weathered bad policies and regulations – have shown this to be the gospel. In the same breath, understanding your business and knowing your employees are good. Knowing your customers (KYC) is better.
On The Other Hand
KYC process is a major business tool now. It is not jargon. It is a strategy. Many businesses have taken it seriously. Especially businesses in the financial ecosystem. KYC shows the mind of your customers. It shows their dislikes. Likes. And lifestyle. This knowledge has led banks and fintech to design schemes.
In The Long Term
Good KYC processes have helped some businesses grow their revenue. Because the business responded to the desire of the customers. KYC processes can help a business identify and verify its customers, their addresses, income sources, and residences. The other side is that KYC can also help the business to grow, to prevent fraudulent activities (in a bank or fintech), and to be relevant in the regulatory order.
Successful KYC has helped the design of schemes like peer-to-peer lending, buy-now-and-pay-later, etc. Fintech is leading in this aspect. Today’s financial ecosystem is digital-first services. According to McKinsey, the fintech sector experienced a 21 per cent revenue boost in 2024. This could grow by as much as 15 per cent annually in 2025. That is three times faster than conventional banking.
According to RelyComply, fintech firms have been pivotal in the shift from brick-and-mortar service to digital-first. Fintech offers alternative solutions to traditional lenders. This has pushed banks to place emphasis on innovation, speed, and user experience. KYC usually helps the user experience journey. For new entrants, effective KYC compliance is both a challenge and a necessity. Customers embrace fintech for ease and affordability. But burdensome KYC verification processes can drive customers away.
KYC and KYB compliance obligations are critical to ensuring security and trust. Research shows that fintech institutions that fall short on compliance can attract high-risk individuals, such as PEPs or persons involved in money laundering. For instance, a lack of KYC compliance recently led the Central Bank of Nigeria (CBN) to direct Opay, Palmpay, Kuda Bank, and Moniepoint to cease onboarding new customers over alleged illegal forex dealings. About 1,146 bank accounts of individuals and companies were frozen.
KYC is not merely a regulatory box to tick. It is foundational to long-term success. When handled strategically, streamlined KYC processes help firms meet stringent regulatory demands without stifling the customer experience. In today’s competitive market, this balance can be the difference between scaling successfully and falling behind.
Deloitte reports that 38 per cent of customers abandon onboarding if it feels too lengthy or invasive. Financial institutions need to view KYC not as a regulatory burden but as a growth enabler.
In The Short Term
KYC compliance is not about survival. It is about sustainability. It supports trust. Growth. Innovation. It ensures fintech firms can continue to reshape the ecosystem.
