KYC or ‘know your customer’ is a fundamental part of onboarding a customer. Over the years, this has evolved from a traditional process to a more digitized one. To start with the customer had to be physically present at the branch of a financial institution or telecom provider and carry out the process of KYC.
With digitization entering every realm of our lives, this process also transformed into a more customer-friendly and technologically advanced one. Video KYC in India and globally was a solution that perfectly straddled the evolving regulatory landscape and instantaneous customer onboarding.
What is Video KYC?
Video KYC is a method to carry out customer identity verification online. This customer verification happens via a video call overseen by a KYC agent. The customer submits the identity proof documents online and answers a few questions; this information is used for real-time address verification services and identity authentication.
AI-powered video KYC digitizes the end-to-end customer onboarding process. Advance technology such as liveness detection, geotagging capabilities, and Optical Character Recognition (OCR) make this process quicker, scalable, and seamless while ensuring security.
As per data, using video KYC to onboard customers helps bring down operational costs by 70% and reduces KYC TAT by approximately 90%.
Companies spanning financial services, logistics, telecom, digital payments, and e-commerce sector, can benefit from Video KYC to detect identity and financial frauds as well as improve the customer’s experience.
How is Video KYC different from traditional KYC?
The entire idea of KYC is to gauge if your customer poses any risks to the business. Every entity dealing with money, such as digital wallets, NBFCs, banks, etc., needs to comply with these obligatory KYC regulations. Traditionally the customer identification program (CIP) was done manually and could take weeks. Both the entities required to be physically present and this activity had to be carried out periodically for high and medium-risk customers. It resulted in a low success rate.
Video CIP is the digitized version of the original KYC process, but quicker, more secure, and cost-effective. Video KYC disregards the need for paperwork, streamlines the verification process, and gives real-time results. It also makes life easy for customers as they no longer need to submit their identity documents in person at the time of account opening.
How did video KYC in India gain so much popularity?
Video identification is the swerving phenomenon that has transformed the identity verification sector. It enables real-time address verification and ID authentication while being time and cost-effective, but it has also addressed rising identity fraud due to its security.
Security is a critical concern in this online world, and the Video KYC solution is efficient in tackling cybercriminals’ sophisticated tricks. It has shielded companies against numerous identity frauds such as spoof attacks, synthetic identities, and deep fakes.
Video KYC integrates both artificial intelligence & human cleverness to detect these identity frauds.
How does video KYC in India work?
The customer needs to fill in the application. The company initiates a video call, and the agent asks the customer questions, answers to which are automatically captured. The users confirm their identities on this call by providing valid ID document proofs. Verifying the documents, real-time address verification through geotagging, and face match also take place on this call itself. This process enables omnichannel customer interaction offsetting the need to rely on multiple channels to complete the CIP.
What are the Requirements for Video KYC in India?
Each country has unique requirements to carry out its video KYC procedure. The Central banking authorities give guidelines that are mandatory to be followed to identify and onboard the customer. These obligatory requirements are carried out in light of AML and KYC standards which are important to protect financial bodies.
Video KYC in India was given the go-ahead in 2020 when the RBI issued guidelines to perform remote verification of customers via a Video-Based identification Process. As a result of the pandemic, this became mandatory to maintain social distancing and alleviate the virus from spreading. Over time these KYC rules were amended to include digital technology to facilitate the Customer Identification Process.