Onboarding for Frontier Markets: KYC Challenges and Liquidity Pools
Curious if others here have encountered significant friction recently when trying to onboard with brokers or PSPs specifically for accessing less liquid frontier markets. It seems the KYC requirements have become increasingly stringent, particularly around source of wealth verification when dealing with smaller local banks. I'm finding the lead times for account approval are extending considerably, sometimes weeks, even for established entities.
Beyond the bureaucratic hurdles, the spreads and effective liquidity in some of these smaller EM pairs, even $NGN or $KES, feel like they've widened post-pandemic. Is this just market dynamics, or are the underlying correspondent banking relationships for some brokers becoming more strained? Any insights on firms that seem to navigate these waters more efficiently without charging exorbitant fees or compromising on payout reliability would be appreciated. Not looking for specific names, more about the operational aspects.
The increased stringency for source of wealth verification isn't surprising, especially with heightened AML regulations globally. Have you considered whether a different type of intermediary, perhaps one more specialized in the region, might streamline the process, even if they come with higher fees?