Recent regulatory changes have enabled financial institutions (banks, NBFC, fintechs, lending start-ups, insurance, etc.) to perform Video based KYC identification to on-board customers remotely.
- Amendment to Master Direction (MD) on KYC by RBI, 9th January 2020
- Clarification on KYC process and Usage of Technology for KYC, by SEBI, 24th April 2020
- Press release by IRDA regarding Paperless KYC process through Aadhaar Authentication Services of UIDAI, 24th April 2020
Digitally streamlined KYC verification has spread through the industry like a breath of fresh air, even as it eases the customer onboarding process for financial and non-BFSI companies.
Owing to the much-needed easing of the burden on time and manpower costs, industry experts have welcomed this decision allowing them to leverage digital channels for the Customer Identification Process (CIP). The video-based customer identification process will make presence-less and paperless banking a reality.
This Video KYC verification is carried out by capturing a live photo of the customers and their official valid document during video sessions using smartphones. Geotagging done by capturing the latitude and longitude of the location where the photo was taken will confirm if the customer was in India while submitting the proof.
As customers do not need to submit physical copies of identity proof, the possibilities for identity theft are eliminated. This, coupled with the advantages of lower KYC costs and seamless onboarding experience for borrowers, definitely makes it an attractive alternative to the current physical KYC.
Even though this method is powered by artificial intelligence (AI) and advanced face-matching technology to establish the user’s identity, the real onus of customer identification remains with the official. Hence, it is mandatory that this task will have to be performed only by officials of the Regulated Entities (REs).
This has definitely come as a blessing to fintech start-ups as they will not be required to invest in any equipment nor bear the cost of sending an official to remote locations for customer identification. Any organization looking to reap the benefits of Digital KYC will need to find the perfect technological partner who can provide them with the right tools to simplify their customers’ KYC journey.
The easing of the KYC norms by the Government might have made your company eligible for Digital KYC but is your organization tech ready to harness it?
To know more about Kwik.ID’s seamless e-KYC solution, please write to info@getkwikid.com.