Know Your Customer (KYC) is a method used by financial institutions to confirm your identification. This is often accomplished by gathering documents such as utility bills, driver's license, and passport. The process of onboarding new customers always includes KYC.
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?
Video KYC solution or video-based KYC is a digital method used by financial institutions to authenticate their customer's identities via video calls. It is an alternative to the time-consuming and standard KYC process done at the branch. With video KYC, consumers can remotely verify their identity, providing better ease and accessibility.
It has several advantages for both financial institutions and customers, including higher efficiency, decreased costs, and an enhanced customer experience.
What is the 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 customer identification process is the digital equivalent of the standard Know Your Customer (KYC) procedure but is more secure, efficient, and cost-effective. Video KYC removes paper documentation and streamlines the entire verification process with real-time results.
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.
What are the Requirements for Video KYC?
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 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.
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.
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.
Bajaj Finserv Personal Loans also offer the process of submitting your documents via video KYC making the application process a whole lot simpler.
Click here to apply for a personal loan today.