Digital India is no more a saying. It’s a real thing now. People use the internet to order their necessities, pay off their bills, plan vacations, and whatnot. Almost every industry is taking a step closer to digitization every while. So, why not the customer service? Although it has an e-KYC process, the innovation and improved technology have resulted in a Video form of KYC (Know Your Customer) solution for the customers. Look at why it is an efficient option for customers and service providers.
What is Video KYC?
The video form of KYC (Know Your Customer) solution is an online process to complete your KYC. Customers and the officials connect through a video call where the customer needs to pass the verification process by following all the guidelines. The Video Know Your Customer (KYC) process ensures stronger security, fewer time requirements, low expenses, and many more advantages. To know more about the video form of KYC (Know Your Customer), keep reading.
Use cases of KYC:
As mentioned earlier, KYC means “Know your customer” . This has multiple use cases. It is a process used by businesses and financial institutions to verify the identity of their customers. Following are some use cases of KYC:
Banking & Financial Institutions:
- Account Opening : Savings account Opening is one of the primary use cases of KYC, as it is a mandatory compliance requirement for availing banking services.
- Risk Management : KYC helps in assessing the risk tolerance of the customers and applies appropriate measures to monitor their accounts or restrict certain transactions
- Anti-Money Laundering Compliance : KYC is essential to ensure that the individual is not in breach of the money laundering guidelines put forth by the global institutions and governments
Digital Payments & E-Wallets
- User Authentication : KYC is used to authenticate users for registration on digital payments applications. As these apps enable financial transactions, it is mandatory to be KYC compliant to use the services. To verify the users to prevent fraudulent activities.
- Cross-Border Transaction : Cross border transactions are highly regulated to ensure that the payments being processed are not for the purpose of fraudulent activities, money laundering, or terrorist activities. KYC helps identify the remitter and the beneficiary to ensure that checks are done efficiently. While registering, KYC documents need to be in place with the remitting institution.
Insurance
- Policy Issuance : KYC is required during the issuance of an insurance policy to register the payee, and the beneficiary of the insurance
- Claim Verification : KYC is required during the claim process to ensure that the claimant is the same person who is the beneficiary of the policy.
Other Purposes
- Real Estate Transaction : Real estate transaction requires KYC to be done for record keeping of the people involved in the transaction.
- Lending Activities : For lending activities like online business loan application, the borrower’s KYC is mandatory to be registered with the lender to avoid fraudulent activities, and verification of the borrower.
What are the guidelines for the Video form of KYC (Know Your Customer)?
Check out the requirements decided by the regulatory authorities for the Video form of KYC (Know Your Customer).
- Customers must allow the companies to take their videos and pictures during the process
- Companies have to use the latest AI and face recognition technology
- The process should include random questions to examine the liveness of the customer
- Customers should join the call from a quiet place
- The office of the authorized person must be suitable for performing the process
- The official should thoroughly check if the face matches the identity proof provided.
- Geo-tagging must be used to make sure that the customer is in India
- The official should cross-check the details entered in the form with the identity proofs
- The video recording must be stored carefully with the exact time and date.
What steps are to be followed for Video KYC?
Check out the mandatory steps for the Video KYC process
What advantages does Video KYC offer?
Here are some advantages offered by the Video Know Your Customer (KYC) solution.
- Paperless process: Video Know Your Customer (KYC) is an online KYC approach. It doesn’t need customers to submit photocopies of their identity proofs. Thus, the employees are saved from handling all those bundles of papers
- Convenient process: Customers can schedule the video call conveniently and join the meeting from a comfortable place
- Less time requirement: Video form of KYC (Know Your Customer)) verification is a matter of mere 3 minutes. On the other hand, regular KYC procedures require a few hours or days
- Cost-efficient: Regular KYC process cost the companies at least Rs 75 for each KYC application. But for the Video form of KYC (Know Your Customer) solution, the cost has become significantly lower
- Fewer cases of drop-offs: As the customers have to go through a lot during the usual KYC process, they often drop off and do not provide their KYC. However, the picture now has changed after the introduction of Video form of KYC (Know Your Customer)
- Customer experience: Customers can learn about remote onboarding during this process
- Customer experience: Customers can learn about remote onboarding during this process
Why opt for a hectic and tiring way of getting your KYC done when you can avail the facility of Video Know Your Customer (KYC) without any hassle. It matters a little if you are not skilled at using the internet. Video Know Your Customer (KYC) requires minimal use of the internet among all the KYC processes. Once you join the video, you can take care of the rest. So, next time you are submitting your KYC anywhere, choose the Video Know Your Customer (KYC) solution.
Video KYC for MSME Loans
KYC is one of the first and foremost requirements for business loans in India. KYC compliance ensures that the borrower’s identity is on record which can be used for a flurry of purposes like identifying customers, checking credit history, verifying details, among many more!
Due to advancement of technology, now the KYC process can be done online using a video! A customer looking to avail a quick business loan may opt to complete KYC digitally.
Video KYC allows the MSME borrowers to do their KYC online using a smartphone, laptop, or desktop with a camera to avail a company loan. The borrower does a real-time video interaction with the lender’s representative who verifies the identity and business details. This is secured through biometric checks, government-issued IDs, and the use of facial recognition software. It is as effective as physical verification but much faster and convenient for business loans for small businesses.
While tools like digital savings account, business loan calculators are really helpful, this digital KYC process too is very beneficial for MSME owners who are based in remote locations and are generally plagued by the lack of easy access to physical branches. Video KYC reduces the risk of fraud and adheres to the standards set forth by regulatory compliance, such as the Prevention of Money Laundering Act (PMLA). It hastens loan disbursals, thus making credit more readily available for business growth much sooner and hence, increases financial inclusion. It has also reduced the dependency on physical branches for bank accounts.
Summary
Video KYC is an online process, which allows customers to finish their KYC verification process through a video call with an official. It has been more efficient and safer than the traditional methods in operation, using AI and face recognition technology for verification purposes. Video KYC has benefits such as paperless, cost-effective, and time-effective processes which have fewer drop-offs and enhance the experience of the customer. It has simplified the KYC process for customers as minimal internet skills are required, and onboarding can be done remotely. Video form of KYC is an easy, quick, and safe method for identification verification.
Video Know Your Customer (KYC) FAQs:
1. Which industries are opting for Video KYC solutions in recent times?
Various industries like banks, NBFCs, mutual funds, crypto markets, insurance, and real estate companies are approaching Video Know Your Customer (KYC) solutions to serve their customers. Video Know Your Customer (KYC) benefits both customers and service providers in multiple ways. Like, the customers can join the video call at their convenience while the employees can increase their efficiency as there’s no headache of handling paper documents of the customers.
2. What are the differences between Video Know Your Customer (KYC) and Regular KYC?
Regular KYC includes both online and offline KYC solutions. Video Know Your Customer (KYC) is also an online approach but is different from the usual online KYC. While in the online KYC approach, customers need to submit scanned copies of their ID proofs, Video Know Your Customer (KYC) requires a maximum of five minutes so that you can join the video call and complete the verification process. Video Know Your Customer (KYC) is way safer than the regular KYC.
3. What are some features of a standard Video Know Your Customer (KYC) solution?
If you are a service provider, you must opt for the best Video Know Your Customer (KYC) solution to provide the customers. Otherwise, they may complain about an unsatisfactory experience with your servicing technology. Here are some must-have features for a good Video Know Your Customer (KYC) solution. 1. Cost-effectiveness, 2. Less time requirement, 3. Global coverage providing facility, 4. Low bandwidth connectivity, 5. Omnichannel engagement, 6. High security, 7. Easy to use.
4. Why has Video KYC gained popularity?
In simple words, Video Know Your Customer (KYC) has become popular as it offers numerous advantages to its users. But why did such a process have to be introduced? People were alright with the online KYC. Nevertheless, newer technologies are always welcome in this modern world. Besides being a new approach, Video Know Your Customer (KYC) has a strong security feature that prevents identity frauds like spoof attacks, deep fakes, synthetic identities, etc. And this is what makes it superior to the regular online KYC.
5. Is Video Know Your Customer (KYC) safe?
You may think twice before allowing the web portal to access your camera and location while applying for Video Know Your Customer (KYC). It is a natural behaviour of people who are conscious of identity fraud. However, the Video Know Your Customer (KYC) process is secured and follows an end to end encryption. Though you need to keep some things in mind at the time of this process 1. Make sure that the link is from an authentic source, 2. Do not provide the video link to anybody else, 3. You may ask the official for his identity to get assured, 4. Feel free to take screenshots during the whole process.
6. Is Aadhaar mandatory for Video Know Your Customer (KYC)?
In India, for video KYC, Aadhaar is among the accepted documents but not mandatory. Other valid documents for Video Know Your Customer (KYC) include a PAN card, a passport, and a driver’s license. These documents verify identities during the process. While Aadhaar is an option, several other valid IDs can be used for smooth Video Know Your Customer (KYC) completion.
7. How long does video KYC take?
Video KYC duration varies based on complexity and verification speed. Generally, it takes 10-15 minutes to complete. Required documents for video KYC include ID proof, address proof, and a stable internet connection. The process involves real-time identity authentication using video conferencing, ensuring security and compliance. Smooth internet connectivity expedites the verification, reducing the time required for Video Know Your Customer (KYC).
8. Can we use e-PAN for Video Know Your Customer (KYC)?
Yes, you can use an e-PAN for Video Know Your Customer (KYC). Video Know Your Customer (KYC) requires specific documents like an Aadhaar, a PAN card, and a stable internet connection. The process involves verifying these documents via video call, ensuring authenticity and compliance. Your e-PAN serves as a valid identification during this digital verification process, streamlining the Video Know Your Customer (KYC) requirements.
9. Documents required for Video-KYC
For Video Know Your Customer (KYC), typically required documents include government-issued ID proof like Aadhaar, a PAN card, or a passport. Supplementary documents verifying addresses, such as utility bills or bank statements, may also be needed. Ensure clarity and completeness when presenting these during the Video Know Your Customer (KYC) process, facilitating swift and reliable verification.
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