Banks also went online and got organized in recent years. Most prominent among such businesses that also underwent a switch-over are the identification verification procedures. “Know Your Customer” or KYC is a simple method through which institutions can make sure that they are indeed dealing with genuine customers and not risk being cheated by fraud, money laundering, and other financial malpractices.
For the purpose of this article, here, we shall tell you what is KYC, why you need it, and how you can avail Video KYC with ease online.
What is KYC
KYC is short for “Know Your Customer.” It is the attempt by banks to identify the customer’s name, address, and banking history before converting him into a customer. Reserve Bank of India (RBI) and foreign regulatory bodies, driven by risk aversion, are compelling all such banks, NBFCs (Non-Banking Financial Companies), insurance companies, and other financial institutions to implement KYC guidelines.
The effectiveness of the KYC process depends on the following:
- Select a customer.
- Confirm the physical address.
- Keep the financial trend and history of the customer in mind.
- Assess the risk of the customer.
KYC process authenticates the customers and makes the customers and institutions trust one another. Through proper documentation and cross-verifications, the institutions are able to identify the people or groups with ill motives and deny them.
Types of KYC Processes
There are normally two types of KYC procedures:
Offline KYC
The old-fashioned one where the clients go to the branch office or the agent office with paper documents like proof of address and proof of identity. It is a time-consuming process since the documents are verified manually.
Online KYC
Online KYC brings technology to such an extent that paperwork is reduced to the bare minimum. Online KYC allows customers to fill in forms on the internet and become verified on the internet. It results in real-time onboarding and ease.
What is Video KYC
One such new technology used during the process of KYC is Video KYC, an internet-based verification process using video communication technology to verify in real-time. So, if you are still thinking what is video KYC, it is simply a secure and remote method of completing customer identification without visiting a bank branch. Video KYC was designed after the pandemic when every institution had to take up remote and secure onboarding procedures. Video KYC replaced physical contact without compromising the authenticity of verification.
Major Features of Video KYC
- Executed via live video calls.
- Authenticated in real-time by an officer of a financial institution.
- Photo ID and other documents are in the line of sight of the camera.
- More secure, on average, than existing processes.
- Provides secure, contactless authentication.
Financial institutions’ choice for customer onboarding with ultra high speed and regulation zero dissonance.
Role of Video KYC and KYC
KYC is not a compliance process, but rather an enjoyable process to protect the financial system. It is thus inevitable:
- Anti-Money Laundering: KYC helps the institutions profile and know their customers, minimizing frauds, money laundering, and terror funding risk.
- Customer Relationship Management: Banks and institutions can offer customized services and maintain long-term relations with a customer profile at hand.
- Compliance Regulation: The firm must adhere to the firm policy and government law in order to escape legal process and penalty.
- Video KYC Remote Onboarding: The bank is able to onboard the customer remotely via Video KYC, and the customer can be approached easily from any part of zones.
How to Fill Up Video KYC Online Without Any Type of Complexity?
It is less strenuous, quicker, and more comfortable. Guide step by step is as described below:
Step 1: Begin KYC Process
Go to your service provider’s website or mobile app where you are registering. Click on the “Complete KYC” or “Video KYC” option, and it will provide step-by-step procedures to start the process. Some apps and websites also send the link to your registered mobile no. or email id to start the process.
Step 2: Make a Video Call at Your Convenience or Go Live
You may then be asked to take a video call whenever you like. Live chat with his/her representative via phone is one of the facilities provided by colleges during live verification.
Step 3: Hold ID Proof and Other Documents in Front of Webcam
During the video call break, you will be asked to hold some documents up in front of the webcam for verification. They will probably be:
- Official photograph identification evidence document (Aadhaar card, PAN card, passport, etc.).
- Document proof of address.
- Supporting finance documents such as bank statements are sometimes required.
Prioritize clean-out documents at the top of the video channel so that they get processed quickly.
Step 4: Complete Biometric or Face Authentication
Step 5: Answer KYC Questions (If Applicable)
Your identity is authenticated by the agent by matching the ID photo with your facial identification or live video. It is done for verification purposes to ascertain that the individual opening the documents is the same individual whose information has been recorded in the books.
Step 5: Respond to KYC Questions (if required)
In Video KYC, your representative may ask you one or two questions to verify your registered details which you have provided to them. Keep ready with easy identification questions like your name, date of birth, or registered number.
Step 6: Verification
Your account will be verified by SMS or email after you have completed Video KYC. Your account will be verified and activated.
For ongoing processing, keep in mind the following:
- Stable Internet Connection: Make the device stable with internet to avoid any kind of interruption while the video call is going on.
- Clarity of Documents: Keep all the documents clear, prepared, and well organized. Creased or unclear documents can result in delay or rejection.
- Proper Light: Choose a well-lit area in such a manner that your face should be easily recognizable by the agent. Face recognition light works better with good light.
- Follow Instructions: Evasion will reasonably follow instructions from the institution or agent on a call.
- Prepare Well: Practice for a call if required while you are least distracted.
Advantages of Video KYC
To Customers
- Convenience: No office visit, thus convenient.
- Speed: Video KYC will be faster in nature than others.
- Accessibility: Customers can get it done from anywhere in the world.
For Institutions
- Time saved while onboarding customers.
- Minimal operational costs compared to offline verification.
- Reduced risk of exposing oneself to fraud because secure hardware is utilized for identity verification.
Problem with Video KYC
Video KYC possesses a couple of possible weaknesses, albeit in the aftermath of increased popularity:
- Technical Issues: Insecure customer networks or outdated technology would hinder them from being able to hold Video KYC sessions.
- Document blur on documents or low quality video images on the screen: Document blur on documents or low quality video images on the screen would be time-consuming.
- Data confidentiality: Just as in any internet services, there is always a risk of loss of privacy and information. Organisations must make it a point to do all they can in being secure enough against them.
Conclusion
In today’s digital-first age, the most applicable to all prospective customers invited to join the bank’s account, onboarded onto digital products, or provided with access to financial services are What is KYC and What is Video KYC. KYC allows for secure and frictionless onboarding through verification of identity, and Video KYC provides the same benefit in quicker, simpler, and touchless form.
Video KYC is also a very convenient process for the institution and customer alike. It’s dragging the banking industry into the next century on the waves of digitalisation and bringing services to so many, many more individuals. One can open a bank account, a mutual fund account, or even a digital wallet account through Video KYC.
