E-Financial
Nigerian Banks Spend Billions Annually on KYCs – KPMG
A KPMG report has revealed that Nigerian banks spend billions of naira annually to implement the Know Your Customer (KYC), which is a compulsory regulatory tool used to reduce the menace of money laundering, terrorist financing and corruption, especially in managing public finance.
The report stated that its survey showed that individual banks could spend between N50 million and N400 million per annum on KYC requirement depending on the customer base of the bank.
The report also stated that on average, between 15 to 30 per cent of customers who start the KYC process do not complete it, because the process is too manual, information required would be difficult to obtain and time consuming and could last for more than four weeks in some cases.
It also noted that the KYC requirement could also be an inhibitor to the attainment of financial inclusion policy in Nigeria that did not have centralised identity management systems.
The report, which is titled “KPMG 2021 Know Your Customer (KYC) Survey: KYC Challenges and Opportunities in Nigeria,” revealed that 85 per cent of the banks that responded to its survey stated that KYC process constituted a significant cost to their operations, with 71 per cent anticipating that the cost of KYC would continue to increase.
In addition, more than 70 per cent of the responding banks, according to the KPMG, spend about N10,000 as direct cost for identity and address verification of a customer while others spend as much as N40,000 on the KYC of a customer.
The key drivers of the continual increase in the cost, according to the report, included frequent changes in regulatory requirements, financial inclusion programs, increase in customer base, initial cost of acquiring technology needed to implement KYC, more complex ownership structures of some businesses operating bank accounts and increase in the number of employees required to administer the KYC unit in a bank.
The survey findings added: “Our analysis of the data reveals that for many banks, the direct cost of KYC is below N50 million per annum, but depending on the size of the bank it can rise to as much as N400 million per annum, which do not include the indirect cost of KYC.
“Banks also incur significant indirect cost in performing KYC that include cost incurred in staffing the compliance office/sanctions screening desk, purchasing, installing and implementing technology, storing and managing customer KYC data, cost incurred due to regulatory reporting, fines incurred as a result of failure to report, opportunity cost incurred as a result of customers who are discouraged from opening accounts due to inefficient or cumbersome KYC systems.”
KPMG also highlighted that some of the topmost challenges banks encountered while implementing KYC in Nigeria include identifying complex legal structures, verifying addresses and identities, identifying and verifying politically exposed persons (PEPs), as well as remediating rather high-volume of legacy accounts.
It added: “Due to the current manual nature of searches at the Corporate Affairs Commission (CAC) as well as continued existence of jurisdictions designated as tax/secret havens – it is difficult for banks to unravel complex legal structures, especially where these complex legal structures are employed to mask true or ultimate beneficial owners.”
The report also noted that address verification is expensive and cumbersome in Nigeria and might not be effective in ascertaining the true location of potential money launderers or terrorist financiers during investigations.
It acknowledged that the deployment of Biometric Verification Number (BVN) and the ongoing National Identification Number (NIN) registration would continue to contribute to addressing this challenge of disparate identity systems in Nigeria that made it difficult for banks to effectively and efficiently identify individuals.
Mr. Saheed Olawuyi, Partner and Head of Forensic Services, KPMG in Nigeria, explained: “It is important for regulators and banks to continuously develop ways to address the KYC challenges, while not compromising the integrity of the financial systems.”
The report recommended that banks should continue to explore technology as a way of tackling the challenges of KYC in Nigeria and create opportunities to share the cost of KYC among them by maintaining common KYC utility facilities.
The KPMG report said: “We would like to encourage more investment in the deployment and adoption of artificial intelligence, machine learning and robotics to automate certain segments of the KYC process, so as to build more efficiency, accuracy and predictive capabilities in the KYC process.”
The report also urged the CAC to further enhance its recently launched digital platform to seamlessly enable users to carry out search on the directors and shareholders of companies, in order to drive efficiency of corporate onboarding and identification of complex ownership structures.
It also called on the CBN and other relevant regulators and stakeholders to streamline the definition of PEPs and “create a collaborative environment where all parties come together and proffer solutions to common KYC issues.”
By 8 am on July 9, GTCO Holdings is set to commence trading on the London Stock Exchange.
As the group is set to list all its shares on the London Stock Exchange, becoming the first Nigerian banking entity to do so.
This is as the group launches a public offer of new ordinary shares to raise approximately $100 million on the London Stock Exchange.
The equity offering, which is an accelerated bookbuild and managed by Citigroup, began on July 2 and is to last until July 31.
On July 31, the group announced that it would cancel the listing of its Global Depositary Receipts (GDRs) on the UK Financial Conduct Authority’s (FCA) Official List.
It will also cancel their admission to trading on the London Stock Exchange (LSE)’s main market.
In place of the GDRs, the group will list all its ordinary shares directly.
aims to admit all its shares to the equity shares category for international commercial companies under a secondary listing on the FCA’s Official List.
The shares will also begin trading on the LSE’s main market for listed securities.
According to a regulatory filing on the London Stock Exchange, the net proceeds from the offering will be used to recapitalize GTBank Nigeria.
Based on the prevailing exchange rate of N1,540 to the US dollar, the targeted $100 million equates to approximately N154 billion.
This capital raise is expected to position the Group to fully meet the N500 billion minimum paid-up share capital required by regulators for banks with international licenses.
As of now, both Zenith Bank and Access Holdings have already met—and exceeded—this threshold.
The National Insurance Commission (NAICOM) has handed over new licenses to SanlamAllianz Life and General Insurance Nigeria Ltd at brief ceremony held in Abuja.
Olusegun Omosehin, commissioner for Insurance emphasized the Commission’s commitment to supporting the growth of insurance entities in the country, while ensuring strict compliance with regulatory requirements. He urged the companies to prioritize good corporate governance, stability, and timely claims settlement processes.
The Commissioner reiterated NAICOM’s dedication to removing unnecessary bottlenecks and improving the insurance industry’s overall performance. He expressed confidence that the merger would enhance the companies’ capabilities and contribute to the industry’s growth.
SanlamAllianz recently launched its operations in Nigeria, marking a significant step in the company’s Pan-African expansion.
The launch follows the merger of Sanlam and Allianz’s Nigerian operations, creating a new entity named SanlamAllianz Nigeria.
This joint venture aims to transform the Nigerian insurance landscape by offering enhanced customer experiences, innovative solutions, and improved financial inclusion.
World Bank has approved an additional $65 million loan for Nigeria to support the Sustainable Procurement, Environmental, and Social Standards Enhancement (SPESSE) project, increasing the total financing for the initiative to $145 million.
The approval was granted on June 24, 2025, according to details posted on the World Bank’s website, which also indicates that the project’s status has moved to “active” following the approval.
The SPESSE project, initially launched with an $80 million loan approved in February 2020, aims to strengthen institutional capacity for managing procurement, environmental, and social standards in both the public and private sectors across Nigeria.
The World Bank described the project’s development objective as the establishment of sustainable capacity in these areas.
This latest approval is part of a broader wave of financing expected from the World Bank to Nigeria in 2025.
The bank is scheduled to approve loans totalling $1.61 billion over the coming months, supporting various development initiatives.
Among these is a $300 million loan for the ‘Solutions for the Internally Displaced and Host Communities Project,’ expected to be finalised by the end of July.
This project aims to improve access to basic services and economic opportunities for internally displaced persons (IDPs) and host communities in selected local government areas in northern Nigeria.
In September, the World Bank plans to approve four additional loans: a $10.5 million facility to support technical assistance for the Central Bank of Nigeria, a $300 million Health Security Program targeting Western and Central Africa (Nigeria – Phase IV), a $500 million project for building resilient digital infrastructure (BRIDGE), and a $500 million loan under the Nigeria Sustainable Agricultural Value-Chains for Growth project aimed at promoting sustainable growth and job creation within key agricultural sectors.
Earlier in March 2025, the bank approved three financing requests amounting to $1.13 billion.
These funds are directed towards projects focused on enhancing quality education, boosting household and community resilience, and improving nutrition.
Among the approved loans were $80 million for the Accelerating Nutrition Results in Nigeria 2.0 project, $552 million for the HOPE for Quality Basic Education for All programme, and $500 million for the Community Action for Resilience and Economic Stimulus Programme.
In February, the Nigerian government announced expectations of new World Bank loans totalling $2.2 billion for six different projects in 2025. This follows a $1.5 billion loan disbursed in 2024 aimed at strengthening Nigeria’s economic stability and resource mobilisation efforts.
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