“Know Your Customer” and the Digital Economy: Global Governance, National Identification, and Financial Access

Abstract

This research examines the relationship between global governance processes and national identity provision, focusing on Know Your Customer (KYC) requirements. Internationally imposed KYC standards outline requirements for financial service providers to verify individuals’ identities for account opening, which some argue creates barriers to financial access. In response, countries have turned to national digital identification systems as a potential solution. This research asks: To what extent are national identification systems in emerging economies being shaped by global financial governance through KYC requirements? How are national identity systems affecting domestic financial access? Using South Africa as a case study, this study argues that KYC implementation involves a “double displacement” of responsibility. Standards are set internationally, handed down to national governments, and ultimately delegated to the private sector. Building on policy diffusion and governmentality frameworks, the research traces the KYC system’s practical complexities, finding that actors at each level are increasingly digitising national identification systems to alleviate compliance-related costs and pressures. Interviews, policy document analysis, and data analysis show that these systems may not address the most significant barriers to financial access that individuals face. Instead, they seemingly enable governments and businesses to “know” their customers in ways that prioritise market logics, using financial access as a legitimising narrative tool. The findings have significant implications for theory and policy. The concept of “double displacement” offers a new perspective on the delegation of responsibility in global financial governance and underscores the growing relevance of governmentality approaches in emerging economies due to international standardisation. On the policy side, this research contributes to the limited quantitative work on KYC requirements, identification, and financial access. Combined with the theoretical insights, this re-framing challenges the polarised discussion about digital identification projects and raises new practical questions around competition, state capacity, distributional effects, and the specifics of datafication.