The Central Bank of Nigeria (CBN) has released its Customer Due Diligence Regulations 2023 or financial institutions under its regulatory purview as it takes a decisive stance against financial crimes.
The CBN’s latest move aims to bolster compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) provisions while aligning with international best practices.
In an effort to enhance the accuracy and depth of customer identification, the CBN has made it mandatory for financial institutions to collect and verify customers’ social media handles as part of their Know Your Customer (KYC) requirements.
New Regulation
These new regulations, which complement 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, are designed to fortify the fight against money laundering, terrorism financing, and proliferation financing.
Under the new regulations, financial institutions are required to establish internal processes and procedures for conducting customer due diligence measures for both potential and existing customers, including occasional customers.
They must identify customers, whether individuals or legal entities, and obtain specific information such as legal names, addresses, contact details, identification documents, account types, nature of banking relationships, and signatures. Furthermore, the regulations emphasize the need to identify politically exposed persons (PEPs).
- To verify customer identities, financial institutions must rely on reliable and independent source documents, data, or information.
- For individuals, this involves confirming date of birth, residential address, contact details, and the validity of official documentation.
- In the case of legal persons or legal arrangements, financial institutions are required to undertake searches on public registries or databases, review annual reports or relevant financial statements, and examine board resolutions.
The regulations also emphasize the importance of record-keeping and maintaining up-to-date customer information.
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 existing customer records are required based on risk categories, with high-risk customers requiring annual reviews, medium-risk customers requiring reviews every 18 months, and low-risk customers requiring reviews every three years.
Social Media Handles
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.
- The inclusion of social media handles in KYC requirements aims to enhance the accuracy and depth of customer identification.
- By obtaining this additional information, financial institutions can gain valuable insights into customers’ online presence and activities, enabling better assessment of potential risks associated with money laundering, terrorism financing, and proliferation financing.
Optics
The CBN’s decision to include social media handles as a mandatory KYC requirement 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.
- Financial institutions will be required to establish internal processes and procedures to collect and verify customers’ social media handles accurately.
- This information will be used alongside other KYC data, such as legal names, addresses, contact details, and identification documents, to create a comprehensive profile of the customer.
What this means
The addition of social media handles to the KYC requirements reflects 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.
- This development serves as a reminder to individuals and businesses to be mindful of their online presence and activities.
- Customers should ensure that the information shared on social media platforms aligns with their stated profiles and remains consistent with their financial transactions.
- Financial institutions will leverage this information responsibly and strictly adhere to data privacy and protection regulations.
Download the new regulation here => CBN Customer Due Diligence Reg. 2023-combined
Thank you
I don’t have a social media handle as matter of choice…I believe same applies to many others … this to me doesn’t appear to be well thought out.
What the fools should have done is this: make the so-called social media handles part of the information attached to everyone’s NIN or other governmental ID. Then banks and other institutions can obtain from there.
But of course, the infrastructure isn’t even working properly: you give banks your NIN, and still need to tell them your Phone number.
And then again, social media handles/accounts can be created on the fly 😏
Won’t work and is superfluous….this policy looks like a remnant of emeifule and his poor policies – what happens to those that don’t have social media? And what happened to our privacy laws?
Pls banks should focus on their poor service delivery and extremely bad banking services….its ironic that on all Nigerian bank’s social media pages they are filled with customer complaints….dispense and debit errors…etc….complaints for days! And yet nothing is being done…customer care people drop calls on customers….talk back….the bank denies customers their money with impunity – when will all this stop??
This is another very poor and unreal policy and I don’t see these people knowing better than Emefiele.
To me it’s a welcome development. This shows that Nigeria is advancing in technology
No it doesn’t. It shows that the CBN believes it has more competence than it truly possesses. The banks have no means to verify social media. One person may have any number of associated handles on any number of platforms. It’s simply the same kind of moronic reasoning that led them to believe it was within their power to replace a currency in a cash intensive society in under a year. Something far better funded far better organised central banks dare not try.
What a crazy, preposterous and unrealistic law. So, I guess even the semi literate and those without social media accounts or access to the Internet are supposed to start running around to have a social media account opened for them in order to continue banking. And this same apex bank claims to be targeting greater financial inclusion in the country, talk about policy somersault. Finally, if the government is serious about tackling the illegalities highlighted in the report, I believe the DSS and the EFCC can give them any information they need to prosecute defaulters most of whom I believe belong to the elite class. Hence, the government doesn’t need to further complicate the lives of struggling Nigerians who are already dealing with a lot, all in the name of making a show of tackling economic crimes, corruption etc.
So if someone is smart/foolish enough to defraud another human, they won’t be smart/foolish enough to spoof a SM account. Dey play.
I don’t think this is a compulsory requirement, it is an added item to KYC if you have it. There is no need to worry about this at all.
To me I don’t think this is a compulsory requirement, it is an added item to KYC if you have it. There is no need to worry about this at all.
I know people who have changed their Facebook accounts for over 5 times this year. It’s not because they’re fraudsters but because they always forget their login credentials. Which of them will they submit? Tiktok is busy banning people’s accounts and they’re opening new ones regularly. What does CBN think it’s doing? Banks already have our date of birth, address, biometric information and you’re still talking about verifying people’s date of birth. Anibi no read well?
This is a very stupid step, so everyone should be on the social medial, including the oldies who don’t even know how to get one and suppose to be resting after serving the do dam government, una go carry deadbody.
Wow…. This is really funny…
…… What about those not on any social media platforms……… 🤔🙄
…………..is bank going to force them to create one?
Let’s wait and see what happens next ….. Cos right now am out of words let’s push it down to the press conference table