Claim: The Central Bank of Nigeria (CBN) has made it mandatory for banks to collect and verify customers’ social media handles as part of their Know Your Customer (KYC) requirements.
Findings:
After conducting a thorough fact-check, it has been determined that the claim is TRUE. The Central Bank of Nigeria (CBN) has indeed introduced new regulations requiring financial institutions to collect and verify customers’ social media handles as part of their KYC process.
The CBN’s Customer Due Diligence Regulations 2023, which complement existing provisions related to anti-money laundering (AML), counter-terrorism financing (CFT), and proliferation financing, aim to enhance the fight against financial crimes. These regulations emphasize the need for financial institutions to establish internal processes and procedures for conducting customer due diligence measures, including the collection of specific information such as legal names, addresses, contact details, identification documents, account types, nature of banking relationships, and signatures.
Under Section 6 (IV) of the new regulation, financial institutions operating under the regulatory purview of the CBN are now obligated to collect and verify customers’ social media handles as part of their KYC process. This requirement applies to both individuals and legal entities. By obtaining customers’ social media handles, financial institutions can gain insights into their online presence and activities, enabling a better assessment of potential risks associated with money laundering, terrorism financing, and proliferation financing.
The inclusion of social media handles in KYC requirements recognizes the growing influence and prevalence of social media platforms in individuals’ and businesses’ daily lives. It acknowledges that social media can provide valuable information about customers’ professional networks, affiliations, and potential sources of income.
Conclusion:
Based on the Central Bank of Nigeria’s Customer Due Diligence Regulations 2023, it has been confirmed that the CBN has made it mandatory for financial institutions to collect and verify customers’ social media handles as part of their KYC requirements. This new regulation aims to enhance the accuracy and depth of customer identification and strengthen the fight against financial crimes such as money laundering, terrorism financing, and proliferation financing.
It is important for individuals and businesses to be mindful of their online presence and ensure that the information shared on social media platforms aligns with their stated profiles and remains consistent with their financial transactions. Financial institutions are expected to handle this information responsibly and comply with data privacy and protection regulations.
Sources:
1. Central Bank of Nigeria (CBN) – Customer Due Diligence Regulations 2023
2. News report – https://nairametrics.com/2023/06/23/cbn-makes-social-media-handle-mandatory-kyc-requirements-for-bank-customers/
In the News: CBN Makes Social Media Handles Mandatory KYC Requirement for Bank Customers
Date: June 24, 2023
The Central Bank of Nigeria (CBN) has taken a decisive stance against financial crimes by introducing the Customer Due Diligence Regulations 2023 for financial institutions under its purview. The latest move by the CBN aims to strengthen compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) provisions, aligning with international best practices.
As part of the Know Your Customer (KYC) requirements, the CBN has made it mandatory for financial institutions to collect and verify customers’ social media handles. This new regulation complements the existing provisions outlined in the CBN’s Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions Regulations of 2022. The objective is to reinforce the fight against money laundering, terrorism financing, and proliferation financing.
Under the new regulations, financial institutions are obligated to establish internal processes and procedures for conducting customer due diligence measures for both potential and existing customers, including occasional customers. The regulations require the collection of specific customer information such as legal names, addresses, contact details, identification documents, account types, nature of banking relationships, signatures, and identification of politically exposed persons (PEPs).
To verify customer identities, financial institutions must rely on reliable and independent source documents, data, or information. This involves confirming personal details such as date of birth, residential address, contact details, and the validity of official documentation. For legal entities, financial institutions are required to undertake searches on public registries or databases, review annual reports or relevant financial statements, and examine board resolutions.
Record-keeping and maintaining up-to-date customer information are emphasized in the regulations. Financial institutions must retain records obtained through customer due diligence measures, account files, business correspondence, and analysis results for at least five years after the termination or cessation of a business relationship or an occasional transaction. Regular reviews of customer records based on risk categories are also mandated.
The inclusion of social media handles in the KYC requirements is outlined under section 6 (IV) of the new regulation. Financial institutions operating under the regulatory purview of the CBN are now required to collect and verify customers’ social media handles as part of the KYC process for both individuals and legal entities. This additional information aims to enhance the accuracy and depth of customer identification, allowing financial institutions to better assess potential risks associated with money laundering, terrorism financing, and proliferation financing.
The decision to include social media handles as a mandatory KYC requirement reflects the CBN’s acknowledgment of the growing influence and prevalence of social media platforms in individuals’ and businesses’ daily lives. Financial institutions are expected to establish internal processes and procedures to accurately collect and verify customers’ social media handles. This information will be used alongside other KYC data to create a comprehensive profile of the customer.
The addition of social media handles to the KYC requirements demonstrates the CBN’s commitment to keeping pace with technological advancements and evolving risks in the financial sector. By adapting regulations to include digital footprints, the CBN aims to ensure that financial institutions have a more holistic understanding of their customers, promoting enhanced due diligence and risk mitigation. Individuals and businesses are advised to be mindful of their online presence and activities to ensure consistency with their stated profiles and financial transactions.
Financial institutions are expected to handle this information responsibly and adhere strictly to data privacy and protection regulations.