Video KYC, or Video-based Customer Identification Method, is an advanced approach to the traditional Know Your Customer (KYC) process that enables individuals to complete their identity verification remotely through a live video call. This method has gained substantial traction, particularly during the COVID-19 pandemic, as it offers a secure and convenient means for customers to establish banking relationships without necessitating physical interaction.
The Video KYC procedure encompasses several critical steps: customers schedule a video call with a bank representative via the institution’s website; they join the call using a secure link transmitted through text or email; and during the interaction, the bank official verifies original government-issued documents while conducting real-time checks such as facial recognition and geo-tagging. This technology ensures compliance with all requisite regulatory requirements in an efficient manner.
With numerous advantages including a reduction in onboarding time by up to 90%, minimal paperwork, and an enhanced customer experience, Video KYC signifies a considerable advancement in financial services. It not only streamlines the KYC process but also mitigates risks associated with money laundering and identity theft by providing secure and reliable verification methods accessible from any location at any time.
What exactly is KYC?
The KYC procedure is mostly conducted by banks. It is the mandatory process of identifying and verifying the client’s identity when opening an account. As per Reserve Bank of India (RBI) notification, from 2004, all banks should mandatorily complete the customer KYC process.
What distinguishes video KYC from regular KYC?
People may complete their KYC for financial transfers and other related activities in several ways. As previously mentioned, the RBI, SEBI, IRDA, and other regulatory bodies use the Know Your Customer (KYC) system to authenticate consumers. Video KYC is far better than regular KYC as it can be done from our home. It is time-efficient. It just takes 5 minutes to complete a video KYC.
The process of video KYC
The RBI approved the use of the Video-based Customer Identification Method (V-CIP) for achieving paperless KYC. Individuals can do remote KYC via video call from the comfort of their home. Unlike conventional methods, the banker verifies the records, performs a liveliness search, and determines the person’s location through video call.
Video KYC Guide: Regulatory Requirements
- A live video of the customer.
- Offline Aadhaar Verification.
- Customer’s original PAN card.
- PAN card verification from database.
- Geo-tagging to ensure the customer is in India.
- A photograph of the customer would be compared to the government IDs.
- Video to be encrypted with the date and time stamp.
Process of Video KYC:
- A customer has to visit the bank’s website and schedule a video KYC.
- The customer will get an automatic text message or email containing a joining link.
- He or she has to join a video call with a bank representative.
- The bank official will do OSV verification of the consumer’s original government documents.
- Customer address validation will be done using his or her live location.
- After successful Video KYC, the consumer will be notified via email and text message.
Advantages of the video KYC process
Several banks and lending agencies have begun to introduce recommendations for a successful video KYC procedure. The video KYC mechanism can be used for various items, including remote onboarding of savings account customers or net banking customers. A large number of non-banking lenders are now in the process of putting the system in place.
- Video KYC enables real-time customer verification through facial recognition and automatic data retrieval.
- Artificial Intelligence is used to quickly onboard clients.
- Onboarding expenses are reduced by 90%. Video KYC significantly reduces the time taken for client onboarding.
- It significantly reduces paperwork. That will also aid in the elimination of human errors.
- It saves a lot of time because it can be completed at any time and from any place. The customer’s physical appearance is not needed. He or she just needs a smart device with a camera and a stable internet connection.
- It will also enable businesses to use the same KYC for various items, such as opening bank accounts and loan applications.