The three national IDs of Kenya, Nigeria, and South Africa were the most frequently misused among the numerous IDs that fraudsters targeted. Using lost or stolen IDs for KYC throughout the onboarding process was the main method fraudsters used.

The State of KYC in Africa H1 2023 study, published by Smile ID, the top KYC and identification platform in Africa, exposes the ongoing issue of fraud in the cryptocurrency sector.

The survey claims that the crypto industry in Africa has the greatest fraud rates of any sector.

The H12023 review of Smile Identity’s Know Your Customer (KYC) in Africa found that during the first half of 2023, there was a 23% reported decline in fraudulent KYC attempts. In comparison to the same period last year, this decline is five percentage points smaller.

The recent achievement by Smile ID of checking 75 million distinct ID checks since 2018 and the drop in fraudulent KYC attempts that have been recognized suggest a dip in the total number of such attempts across the continent.

The three national IDs of Kenya, Nigeria, and South Africa were the most frequently misused among the numerous IDs that fraudsters targeted. Using lost or stolen IDs for KYC throughout the onboarding process was the main method fraudsters used.

On the continent, the following types of identity fraud are most frequently committed:

Selfie spoofs are an effort by con artists using stolen identification documents to pose as someone else in a photograph and claim ownership of the documents as their own.
When a valid ID number is given, but the facial biometrics do not match the ID, this is known as a face mismatch.
counterfeit identification cards, inappropriate identification kinds, altered documents, out-of-date identification cards, or instances in which a real identification card wasn’t delivered
As stated in the report:

Identity fraud rates in the BNPL sector have reached a historic low of 4% after previously being 37%.
Contrarily, the bitcoin market in Africa is still plagued by significant levels of fraud.
From 2022 onward, the payments and remittances industries will see a sharp rise in fraud.

Despite a 30% rise in KYC onboarding at the time, crypto had the fewest fraud cases, according to Smile ID’s 2022 report.

On the plus side, their systems have handled significantly more female ID verifications in the past two years, going from 10% in the third quarter of 2021 to 35% in the first half of 2023.

The business emphasized significant progress in female verification in three industries:

Banking and Lending
Purchase Now Pay Later
Remittances.

In these places, the rising acceptance of female verification was very noteworthy.

The research from Smile Identity also provides an overview of digital identity programs throughout Africa. It included:

Enrollment in Ethiopia’s Fayda national ID
Kenya’s adoption of a distinctive personal identification
A digital ID program will be introduced in Uganda in the fourth quarter of 2023.