Re-usable KYC could solve DHA lookup woes, and give Africa a digital ID roadmap
Re-usable KYC could offer banks more than a much-needed cost-saving workaround after the Department of Home Affairs’ 6500% hike on live ID lookups. A successful KYC resolution will also help financial institutions (FIs) across Africa design their own Digital Identity journeys, unlocking access to finance for millions, as well as attractive new business opportunities for FIs in the region.
In July last year, the South Africa Department of Home Affairs (DHA) hiked real‑time ID verification tariffs from around 15c to R10 per lookup. This 6 500% increase in marginal identity verification (IDV) cost put a significant squeeze on affordability and had industry players scurrying to find more cost-effective workarounds.
Tom Schoon, Head of Strategic Partnerships for Africa at Sumsub, a global full-cycle verification platform, shares that the DHA database had an historically loose access requirement with all manner of organisations, from tier-one banks to unregulated outfits, able to get an API connection. This resulted in widespread misuse and even fraud.
“The combination of sharply higher costs, weak historical controls and uneven data quality has pushed some players towards risky workarounds like using cached copies of the database. FIs expect robust, current verification with predictable and sustainable cost structures,” he says.
From single‑source to multi‑source, layered KYC journeys
Schoon advocates for a shift away from blunt, per‑lookup calls to the DHA towards more layered, intelligence‑driven KYC journeys with reusable and SSID (Self-Sovereign Identity) enablement.
“On the one hand, there’s the emerging reusable KYC model, which offers a central, official verification via the DHA system that’s valid for a fixed period – suggested to be around six months – which banks can reuse instead of hammering the database for every transaction. However, the better operators don’t just rely on that token, they run continuous checks,” he says.
Schoon says the multi-source option with layered verification would keep the DHA database as the legal ‘anchor’ for establishing a person’s core identity, but shift most day‑to‑day risk decisions to smarter, cheaper layers above it.
He explains that at onboarding, a bank would do one strong check against national ID rails, then bind that identity to biometrics such as liveness detection and face match to prevent impersonation. Step two would involve device risk intelligence such as fingerprinting, SIM swap detection, and geo-location anomalies. The final layer would rely on data analytics such as behavioral scoring, velocity checks, and consortium intelligence.
“Instead of re‑querying DHA for every event, institutions rely on a platform that aggregates many data sources and updates them more frequently than the state can. This layering can detect anomalies, identity theft such as misuse of deceased IDs, as well as behavioural red flags in between official refreshes,” he explains. Periodic calls back to DHA would remain, but as exceptions triggered by time or risk, not as the default.
Efficiency gains for FIs
Schoon says the layered approach cuts costs by sharply reducing expensive, repeated DHA lookups, while still keeping the state database as the legal anchor.
It reduces operational complexity by consolidating KYC, AML, sanctions and fraud into a single analytics layer instead of multiple disconnected tools.
It also supports growth and inclusion because once a strong anchor identity is established, banks can safely serve more customers, more channels and more markets (including cross‑border) without re‑building their verification stack each time.
Digital identity wins for governments
Schoon says this improved architecture delivers far more than cost reduction.
“A secure digital ID, combined with a customer financial ID, allows individuals to transact via digital wallets without a traditional bank account. That expands access to payments and basic financial services for people who are still struggling to prove their identity,” he says.
The same identity layer can support remote voting and digital public services, which is particularly relevant in large or underserved regions. What’s more, at a cross‑border level, when businesses in different African countries can verify each other reliably, they can reduce the chain of intermediaries and fees that currently make intra‑African trade and remittances so expensive.
“It’s for this reason that African countries are closely watching how South Africa’s digital ID will evolve, how it will be managed and how banks will maximise its benefits while minimising risk to themselves and customers,” he says.
Platforms deliver the solution
For many institutions, the practical barrier is not vision but integration. Banks are left juggling multiple service providers, each handling a slice of compliance, with brittle point‑to‑point connections between them.
“Banks across the continent often maintain a patchwork of separate providers for KYC, sanctions screening, AML and fraud, each with its own data model and integration. This fragmentation makes it hard to adopt a consistent reusable KYC strategy,” explains Sergio Barbosa, CEO of global banking platform, FutureBank. “By offering a pre‑integrated environment that already connects to hundreds of services, including full‑stack compliance and verification platforms like Sumsub, platforms address FI’s concerns. Instead of building and maintaining ten different integrations, a bank or fintech can plug into a single orchestration layer that handles the national ID anchor, the multi‑source analytics on top, and the sharing of a single, coherent risk view across the organisation.”
Barbosa agrees with Schoon that a resilient and efficient approach to digital identity will be platform‑based and easily replicated across regions.
“If South Africa’s current reforms succeed, that model is likely to be replicated across other African markets, making reusable KYC and SSID one of the quiet foundations of the continent’s next phase of digital growth,” he says.
About FutureBank
FutureBank is a scalable, secure, customisable and compliant banking and payments integration platform that helps banks, brands and fintechs rapidly launch new products and services with minimal cost and effort. Its unique integration technology and curated partner network, including KYC, Fraud, AML, Loyalty, Investment, Insurance and Lending capabilities, enables customers to directly embed best of breed offerings in any customer experience or core system to get to market faster. FutureBank reduces integration costs by up to 85%, supports up to 80% of customer-facing functionality off-the-shelf, and integrates seamlessly with legacy and modern core banking and payments infrastructure.
About Sumsub
Sumsub is a leading full-cycle verification platform that enables fraud-free, scalable compliance. Its adaptive, no-code solution covers everything from identity and business verification to ongoing monitoring – quickly adjusting to evolving risks, regulations, and market demands. Recognized as a Leader by Gartner, Liminal, and KuppingerCole, Sumsub combines seamless integration with advanced fraud prevention to deliver industry-leading performance. Over 4,000 clients—including Bitpanda, Wirex, Avis, Bybit, Vodafone, Duolingo, Kaizen Gaming, and TransferGo—trust Sumsub to streamline verification, prevent fraud, and drive growth. The platform’s methodology follows leading global AML standards and regulations, and Sumsub has extensively engaged with leading research and public institutions like the UN, Statista, and INTERPOL.
