Africa’s technology industry is booming, helped by a competitive tech landscape that has contributed to a leapfrogging effect of bypassing traditional paths like landlines straight to mobile phones. And over the years, this development has led to a rapid adoption of eBanking and mobile money payment systems and made the region an important growth market for business.
But despite the huge potential for business growth and development, Lanre Ogungbe, CEO at Nigeria-based cybersecurity firm Identitypass, said one major challenge limiting opportunities in the region is the high rates of fraud and cyberthreats and the lack of advanced verification solutions to effectively fight fraudsters.
“For someone in the region who uses PayPal there are a couple of things they cannot do,” Ogungbe told PYMNTS in an interview. “But if you change your IP address and move it to the U.S., you can do it because now PayPal can verify you and is sure that you’re actually who you say you are.”
It is this challenge that the Lagos-based company is trying to solve, with the aim to open up the region to large brands that have been deterred by high fraud rates in the region and the inability to properly verify customers they are transacting with.
To ensure that their clients are doing verification for the “right purposes,” Ogungbe noted that they are also required to go through a rigorous compliance check once they sign up on the platform to ascertain if it’s a real business registered with a government entity.
Once they’re cleared, businesses can integrate into one of the multiple application programmable interfaces (APIs) that the firm has opened up to verify the identity of a customer who wants to access a credit facility, for example, or to ensure that the bank account details, or a government ID submitted by a customer, is real and authentic.
The company has also introduced a verification software-as-a-service (SaaS) solution, biometrics technology and data verification endpoints, that allow HR companies to conduct background checks and authenticate potential candidates or retailers to detect unusual transaction patterns of a customer.
“Let’s say a typical customer does about $100 in average monthly transactions on your app but suddenly, the same person is doing $10,000. You can pause that transaction and trigger an image recognition step requiring that individual to take a photo,” he explained, adding that their system can detect if the person submits a still image or a 3D image instead of a real-time image.
Related news: African Cybersecurity and Anti-Fraud Firm Identitypass Raises $2.8M in Seed Funding
Today, the firm serves 200 businesses based in Nigeria, Kenya, the U.K., U.S., and India which operate across various sectors like eCommerce, banking and blockchain. It recently secured $2.8 million in seed funding earmarked to grow its suite of products and expand the platform into new regions, and it has long term plans to leverage its work with regulatory agencies across the region to create a continentwide data security framework.
Strategic Collaboration with Governments
Despite the challenge involved in working with governments, Ogungbe said policymakers are increasingly aware of the importance of empowering “the good guys” to enable them to counter the acts of cybercriminals and fraudsters who are taking advantage of consumers.
But for government collaboration to thrive, he said meeting their local compliance requirements is key, although it can be extremely challenging due to the highly fragmented regional market and ineffectiveness of regional economic alliances like the Economic Community of West African States (ECOWAS) or the Economic Community of Central African States (CEEAC).
“It’s our biggest headache,” Ogungbe remarked, adding that the difficulty in meeting the many local laws and regulations is why “a company that operates in Ghana cannot easily fly to Nigeria to start a business even though the two countries are within the ECOWAS community.”
That is the gap the cybersecurity and anti-fraud startup is trying to fill today, working closely with government agencies in each country to ensure that they have the necessary licenses — they’ve acquired 12 in Nigeria — for authorizing checks across a broad range of data verification points.
Moving forward, Ogungbe said their aim is to help drive cybersecurity and anti-fraud innovation in the region so that it can mirror that of advanced markets like the U.S., where a simple Social Security number (SSN) can enable a business to easily establish the identity of an individual, access their credit score and tracking their earnings histories.
“Everything is so integrated [there], and even though we do not yet have that infrastructure in the region, we hope that we will be part of that frontier technology,” he said.
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