Nigerian Central Bank now requires customers to provide social media handles for KYC verification

The Central Bank of Nigeria (CBN) has released new Customer Due Diligence Regulations for 2023 to combat financial crimes and align with international best practices. The regulations require financial institutions to collect and verify customers’ social media handles as part of their Know Your Customer (KYC) requirements. This is in addition to 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.

Financial institutions must establish internal processes for conducting customer due diligence measures for both potential and existing 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. Politically exposed persons (PEPs) must also be identified.

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 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.

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.

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. Financial institutions will be required to establish internal processes and procedures to collect and verify customers’ social media handles accurately.

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. Customers should ensure that the information shared on social media platforms aligns with their stated profiles and remains consistent with their financial transactions.