It has emerged that fintech services are becoming even more popular in Africa.

This follows an assessment put together by Smile Identity, a firm that has also established that fintech and mobile money have become powerful growth drivers in Africa, responsible for two-thirds of all financial accounts, surpassing banks, and attracting billions of dollars of investment.

For instance, fintech alone was responsible for 75% of all venture capital investment into Africa in 2021.


Consumers and businesses are adopting mobile money, digital wallets, and cryptocurrency to make it easier to send, receive, and use money.

However, these services are also attracting the attention of bad actors.

Fraudsters are mounting more frequent attacks and undermining basic KYC (know your customer) checks with social engineering, stolen IDs, and duplicate accounts.

This is resulting in higher reported fraud and losses, bringing scrutiny from regulators.

Remote onboarding

More services are moving online, hence KYC and onboarding are becoming mostly remote.

In place of having users show up physically to provide credentials, many African businesses are conducting the entire process through a web or mobile interface.

In some cases, agents are extending the reach of online services by visiting users who do not have smartphones.

In 2019 and onwards, Smile Identity says it has run 30 million KYC checks, with exponential growth noted during the pandemic period.

As such,  the firm has developed insights and pattern recognition about fraudulent activity happening in the digital space.

Fraud attempts have increased by more than 50% in the last two years

At the start of the pandemic, there was a shift towards remote onboarding, which, while faster, initially lacked the same checks present during physical onboarding.

Cybercriminals and fraudsters capitalized on this shift, emboldened by the perceived ‘anonymity.’

In 2020, 17% of all Smile Identity KYC checks were flagged as attempted fraud.

In the first half of 2022, the number increased to 26%.

For the foreseeable future, as businesses adapt to the new virtual reality, it is expected that there will be more and new types of fraud emerging on an increasing basis.

Government-issued documents are lucrative to attackers

Across the continent, there are various identity documents used for identity verification.

The national ID is the most common in many markets.

These IDs are used to gain access to products and services across the government and the private sector alike.

There are varying degrees of fraud attempts depending on our clients’ activity, size, location, and industry.

Promotional offers tend to attract more fraud attempts as bad actors try to game the system in order to reap promotional rewards.

There were a lot of promotional campaigns coming from South Africa in the first half of the year, with some businesses entering the country and attempting to attract customers to their service.

Fraud attempts by country

The use of biometrics has become part of everyday life, be it unlocking your phone with your face, accessing office buildings with a fingerprint, or clearing customs at the airport.

Its pervasive use has made it attractive to adopt due to the shallow learning curve required.

To this end, governments across Africa have been adopting biometrics for their new and improved national ID systems.

The Huduma Card in Kenya is built around biometrics.

Ghana has released its new Ghana card, which consolidates information from tax identification numbers and ID numbers into a single card with a chip.

As countries see wider adoption of their improved digital ID systems, it is possible there will be a stabilization in the number of biometric fraud attempts.


Countries with lower adoption of biometric IDs may notice fluctuations in fraud as less modern systems provide more avenues for attack.

Additional assessments of this report can be read here.


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Kenn Abuya is a friend of technology, with bias in enterprise and mobile tech. Share your thoughts, tips and hate mail at [email protected]