Central Bank of Kenya regulations inform use of selfies by digital credit providers

"I was hesitant because I wondered, do they really need my image? Don’t they have my ID already?" he questioned.

Providing a selfie for identity verification has become part of the Know Your Customer (KYC) processes for financial service providers, especially those offering services digitally and online.

Evolution of KYC processes in Kenya's banking sector

Traditionally, for a bank to ascertain your identity, you had to physically enter a banking hall to open an account and you could not open an account on behalf of someone else.

The bank had to verify that the person opening the account was the one whose image was on the ID - by literally comparing that image against your face - and you also had to submit passport-size photos that the bank representative also had to match with your face and the image on the ID card.

Now, banks such as Standard Chartered, Absa, and Diamond Trust Bank have fully online account opening services.

In fact, there now exists fully digital banks, such as Fingo Africa that launched in Kenya earlier in May 2023 in partnership with Ecobank.

With digital services such as opening a digital current/salary account, digital savings account and more, you do not have to visit a banking hall at all to open an account. You do it virtually.

Equally, it is commonplace to access credit services, particularly unsecured personal loans now offered in the form of digital loans provided by Digital Credit Providers (DCPs), leading telcos, and commercial banks.

The switch to the online financial world has presented opportunities, but also unique challenges - such as identity theft and fraud.

When a bank or a digital lender asks for a selfie in the registration process, it is so that they can compare the image that appears on the ID copy you upload and the selfie image you provide to ensure you are indeed who you say you are.

This is done instantaneously using an AI software with no human intervention.

Depending on the financial institution, the selfie will be inspected for liveliness. This is to determine whether the selfie is a real-time image of a real person or if it is a recording or other form of deep fake imagery.

"In the digital age, privacy is a concern. I paused to do some research before I could decide whether to complete the application or not. I learned that providing a selfie is a security measure that protects my identity," Musau recalls of his experience with Zenka.

CBK regulations for licensed financial institutions

According to the CBK Prudential Guidelines for Institutions Licensed Under the Banking Act, among other things;

Any bank offering telephone banking, mobile banking and /or internet banking should implement procedures to identify and authenticate the customer
The procedures adopted should confirm the identity as robustly as those for face-to-face verification
It is for each institution to decide upon which checks to employ.

On the digital lending scene, the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022, Regulation 31 states: "a digital credit provider shall take reasonable measures to satisfy itself as to the identity of its customers while performing transactions with them".

That is why both banks and digital lenders are requiring non face-to-face customers to take pictures of their identity documents and using the provided app/web platform, users are prompted to take and submit a selfie image to accompany these government documents for sufficient identity verification.