Digital banking is not truly digital if it’s not done from the convenience of your couch, including availing a new financial product or service. KYC (know your customers) is an essential and critical step for financial institutions – like banks, NBFCs, investment advisory services – to offer financial products or services to any customer. There are various ways this process can be completed, and the Reserve Bank of India (RBI) allows financial institutions to complete this process as a video KYC. There are multiple benefits of a video KYC. It not only streamlines processes that reduce overheads and improve efficiency but also allows for quicker delivery of financial products to the customer – a progressive step towards improving the financial inclusion mandate.
What is video KYC?
Until recently, eKYC was the norm where the customers could partially complete the KYC, however, to get the full suite of services one had to visit a physical branch. The RBI authorized video KYC in January 2020. VCIP (video-based customer identification process) is a process by which financial institutions capture all the necessary details of a customer and complete the KYC verification. It is mandatory to get access to financial products, and video KYC customers can get a bank account, insurance, and all the other financial services benefits through it.
Video KYC allows a customer to complete a KYC from the convenience of their homes. They can submit and complete the KYC check simply over a scheduled video. This online KYC makes the process hassle-free. Trained personnel completes the video KYC by asking a couple of questions while staying on a video call. The KYC check is completed with geotagging and facial matching. A video KYC, once done, enables the customer to access various financial services offered by the bank.
How to do video KYC online?
In India, all the three regulators (RBI, IRDAI, SEBI) have taken a progressive stance and allowed video KYC. However, there are different nomenclatures used with some minor differences.
The RBI calls it V-CIP (video-based customer identification process) and is part of KYC checks for banks and NBFCs.
Steps:
- Before initiating a VCIP, customer details are collected online/offline.
- Post consent, a video KYC session is scheduled.
- Official captures video and photo of the customer along with their PAN while having a live interaction.
- Once triggered, the video KYC is completed within 10-15 mins and the video record is saved in a time-stamped, geotagged manner. It is also reviewed by an official.
Benefits of video KYC (V-KYC) for Banks and Financial Institutions
There are multiple compelling advantages of implementing a video KYC. V-KYC is critical customer onboarding for financial institutions and new-age fintech firms. It enables them to offer financial products (bank accounts, loans, cards, insurance, financial advisory, investment products, etc.) From the government’s point of view, it is an important step towards higher financial inclusion.
Major benefits of online KYC for Bank and Financial Institutions
- Bottom-line impact: KYC is a cost-intensive process and a mandatory one. There is no circumventing it. Therefore, if this can be done with digital properties (paperless and video-based) without logistic expenditures of KYC officials visiting the place, there is nothing like it. According to reports, eKYC saves up to 50% in costs, while video KYC, in particular, saves up to 90% of the cost.
- Fully compliant KYC: Until recently, eKYC was the norm where the customers could partially complete the KYC, however, to get the full suite of services one had to visit a physical branch (i.e., in-person verification). The RBI-authorized video KYC is the only alternative that is considered fully compliant and equivalent to in-person verification.
- Quicker turnaround time (TAT): Finance is a competitive industry. For any reason, if a company is unable to complete the KYC, this leads to a loss of potential business. KYC verification process that usually took about 10-20 days can now be completed within 10 mins, all with a high level of automation and digitization.
- Seamless customer onboarding: Thanks to the video KYC check, a lot of new-age fintech firms are mushrooming, offering a great customer onboarding, knowing your customers (KYC), and eventually offering a gamut of financial products. This is pro-customers as now they can get access to better financial products and services with the ease of staying indoors. This also means legacy businesses need to adapt quickly and digitize their processes or risk losing out on the entire next generation of business.
- Customer convenience: Customers can choose a time and place of their convenience to get the KYC done, as opposed to them having to physically visit the RE’s office or having to wait for the Agent to visit them.
- Customer base expansion: Companies can onboard Full KYC customers even from regions where in-person verification is not feasible.
- Safe, secure, and transparent: Regulators mandate KYC verification primarily to keep a check on fraud, money laundering, and financial crimes. Once completed, video KYC can be stored for record-keeping and access.
Video KYC incorporates strong data security protocols, machine learning-powered filters, and a digital workflow for remote & paperless KYC checks.
- Higher efficiency: With fewer documentation errors, higher turnaround time improves efficiency. AI-backed technologies help humans do their jobs better
- Technology at the forefront: Using cutting-edge technology, Hyperverge offers an AI-driven liveness check and a face match algorithm matching the customer photo on PAN or Aadhaar to the live person’s face. RBI encourages the use of such technology that allows for real-time PAN verification and video forensics.
Read more:
- How Video KYC can play a crucial role in maintaining business continuity
- Unleashing the Power of Video KYC through C-KYC and DigiLocker
Hyperverge is a Silicon Valley-based AI company. The firm’s AI models are optimized for low bandwidth deployments and trained for real-time image and video analysis.
The HyperVerge tech uses bleeding edge AI with precision deployed at scale. HyperVerge offers the fastest online identity verification, KYC/AML checks, and fraud prevention for all industries, enabling frictionless customer onboarding. We have processed 600+ million identity and fraud checks so far.
Deep-learning technology created by HyperVerge is powering various applications for large enterprises in the industries spanning from Financial services to Telecom to Defense.
