Know Your Customer (KYC) is a crucial method used by financial institutions to verify your identity. This process often involves collecting documents like utility bills, a driver’s license, and a passport. In addition to traditional methods, many institutions now use a KYC video call to enhance the verification process. This video call helps ensure that the documents match the individual in real-time, providing an added layer of security. KYC is a fundamental part of onboarding new customers, helping institutions comply with regulatory requirements and prevent fraud. Digitisation has changed the BFSI sector in many ways and made it easier to do things without having to deal with lot of paperwork. In the modern era, we have the choice to use video KYC to verify our identity. The Reserve Bank of India (RBI) has authorised KYC verification to be conducted using video calls.
What is video KYC?
A Video KYC solution, or video-based KYC, is an innovative digital method used by financial institutions to authenticate customer identities through video calls. This approach offers a modern alternative to the traditional, often time-consuming KYC processes conducted at physical branches. By utilizing video call KYC, customers can verify their identities remotely, enhancing convenience and accessibility. This method streamlines the verification process, significantly improving efficiency and reducing costs for institutions. Additionally, it provides an enhanced customer experience by offering a more flexible and user-friendly way to complete identity checks. Video KYC solutions also help institutions comply with regulatory requirements more effectively, mitigate risks associated with fraud, and expand their customer base by removing geographical constraints. These benefits make video-based KYC a critical tool in the evolving landscape of financial services.
Difference between video KYC and traditional KYC
Banks, financial institutions, and all other businesses that deal with money are required to comply with KYC rules. Historically, organisations would use a manual Customer Identification Program (CIP) to verify the identity of new customers during the onboarding process. This procedure could take up to several weeks, causing clients to abandon it midway.
The video KYC process, also known as video-based KYC, serves as a modern digital alternative to traditional Know Your Customer (KYC) procedures. This method offers enhanced security, efficiency, and cost-effectiveness compared to standard practices. By leveraging video-based KYC, financial institutions can eliminate the need for paper documentation, significantly simplifying and accelerating the verification process. The real-time nature of video KYC ensures that identity checks are completed quickly and securely, reducing the risk of errors and fraud. Additionally, this digital approach improves accessibility for customers, allowing them to complete their identity verification from anywhere, thus making the overall experience more convenient and user-friendly.
Why do you need KYC?
It is mandatory to meet all eligibility requirements of KYC verification before you may apply for a personal loan or any financial product. KYC includes documents such as Aadhaar, PAN card, passport, and voter’s ID. But, one of the key benefits of the video KYC facility is that you do not need to submit physical documents. All the documents can be submitted electronically in a simplified manner.
Read more: What is e-KYC
What are the benefits of video KYC?
In the modern financial landscape, the benefits of video KYC have become increasingly apparent as institutions seek more efficient and secure methods for customer identification. KYC through video call is revolutionizing the traditional Know Your Customer (KYC) process by integrating advanced technology to streamline verification and enhance the overall experience. Here, we explore the key advantages of adopting video KYC solutions.
- One of the key benefits of the video KYC facility is that you do not need to submit physical documents. All the documents can be submitted electronically in a simplified manner.
- Video KYC enables a quicker loan approval process, eliminating the need for a physical visit to the branch.
- This process enables faster loan approvals and disbursals.
- Security measures enhance fraud prevention, safeguarding both the lender and the borrower.
What are the requirements for video KYC?
The requirements for video KYC typically include a valid government-issued photo ID, proof of address, a stable internet connection, a smartphone or computer with a camera, and the customer's active participation in a real-time video call with a KYC agent. This method ensures secure and compliant customer onboarding while eliminating the need for in-person visits.
How video KYC works?
Video KYC, or video-based KYC, is a streamlined digital process for verifying customer identities. Here’s how it works: First, the customer initiates a video call with a representative or automated system through a secure platform. During this KYC video identification process, the customer presents their identification documents, such as a passport or driver’s license, in real-time. The system or representative then verifies these documents against the customer’s live image. Advanced video-based KYC solutions often incorporate biometric checks, such as facial recognition, to ensure authenticity. The entire interaction is recorded for compliance and auditing purposes. This method enhances security, speeds up the verification process, and eliminates the need for physical documentation, making it a convenient and efficient alternative to traditional KYC methods.
What are the steps for video KYC process?
The video based customer identification process is a relatively recent innovation in the realm of KYC that has gained popularity due to its convenience and accessibility. Below is a breakdown of the video KYC process.
- Pre-registration
Pre-registration is the first step of video KYC procedure. Customers who intend to participate in the video KYC procedure are required to register with the financial institution beforehand. This requires providing personal information such as their full name, address, and identification provided by the government. - Arranging the video call
Once the customer has registered, a time and date for the video call will be provided. Typically, the video conversation is done via a secure platform that protects the privacy of the customer's personal information. - Identity verification
During the video conference, the customer will be required to give additional personal information and papers for identity verification. This may involve answering questions regarding their personal background or submitting extra evidence, such as a utility bill or bank statement. - Record-keeping
The video call is recorded and stored as part of the KYC procedure. This is to ensure that a record of the verification process exists in the event of future disputes or governmental regulations. - Approval
After the video call has ended and the customer's identity has been confirmed, the financial institution will analyse the customer's information and decide whether to approve the application. If accepted, the customer will have access to the financial institution's services.
Conclusion
In conclusion, video KYC represents a significant advancement in the field of customer verification, offering a modern and efficient alternative to traditional methods. By leveraging real-time video calls, video-based KYC provides enhanced security through live interactions and biometric checks, reducing the risk of fraud and identity theft. This method streamlines the verification process, making it faster and more convenient for customers who can complete their KYC requirements from anywhere, at any time. Additionally, video KYC helps financial institutions cut costs associated with physical documentation and manual processing while improving overall operational efficiency. With its ability to meet regulatory standards and provide a superior user experience, video KYC is transforming how institutions approach customer onboarding and identity verification. As digital solutions continue to evolve, video KYC stands out as a pivotal tool in ensuring secure and seamless customer interactions.
