How is the Video KYC Verification Process Transforming Customer Onboarding?

The amelioration of the Video KYC verification process received a boost because of the pandemic. The COVID-19 pandemic came as the evil eye for the year 2020. It affected almost everything in the world. Several industries were disrupted. Some industries like healthcare were pressurized with the overflow of operations. This situation was hard to control. But there were a few industries like food and tourism which had an underflow. Meanwhile, the banking and finance industry, often described as the backbone, adopted different means to stay afloat. For them going under the pressure wasn’t an option as they controlled the economy. Hence, they leveraged VCIP services for digital customer onboarding. Undertaking online verification of documents like Aadhaar verification, PAN card verification, these institutions used video KYC solution for everything.

One of the ways that were adopted by this industry was the implementation of Video KYC verification process commonly known as KYC onboarding solutions. It offered online aadhaar verification services to the customers. The government imposed lock-down restrictions which created a roadblock for the operations of the financial, insurance & NBFC industry. As these industries’ work highly relied on a person to person contact and manual work, the improvisation that came on this font was digitization.

What is Video KYC Verification Process & how is it done?

Video KYC is the process of conducting KYC onboarding operations using video conferencing technology i.e over a video call. This process can be done from one’s home. The only tools needed are a working laptop or mobile with internet connectivity and a video camera. Many companies are now offering Digital KYC solutions (Video verification services) to make the identification and KYC verification process easier and much accessible. The process of video KYC for banks have eased the complex operations.

In the process of Video based Customer Identification Process (VCIP services), the customer is connected to the bank through a video call. Video KYC verification process could be of two types – Assisted Video KYC and Non-assisted Video KYC . In the Assisted KYC process, the bank provides a KYC agent to the customer who guides the person through the steps. The Digital KYC onboarding agent performs all the checks and KYC or background verification over the video call. 

In the unassisted video KYC process, the customer himself/herself scans the document and performs the document verification process mainly aadhaar verification, PAN card, driving license verification. The process does not use any third-party application. It follows the inbuilt video conferencing method of the website or the mobile application of the concerned bank. The move to use Video KYC or VCIP services commonly known as video verification services during the digital customer onboarding process came as a legally approved regulation from the RBI earlier in the year 2020 in India.

How has Covid-19 affected video KYC onboarding? 

Although Digital KYC solutions and online background verification services long existed before the pandemic, it got boosted to a great extent after its occurrence. The main reason for it being the fact that it promoted contactless services. Customers have been known to be a victim of manual work, tedious standing hours, and ginormous paperwork. Thus, this comes indeed as a welcome change. Banks and financial institutions rolled out digital customer onboarding services in order to ease the burden on the bank officials and the customers. The pandemic saw the insurance, NBFC, equity, and lending market take a big hit. Investors and lenders thus used Digital KYC solutions. According to an article from Financial Express, a certain Digital KYC service provider experienced a 300% jump in the usage of its services, barely a few months into the lock-down.

How Video KYC assists in Digital Customer Onboarding

Customer onboarding is the process by which a bank or a financial institution onboards a customer. The institution takes responsibility for his/her legal and financial track records. Verifying the identity of the customer and validating the documents, running background verification forms an important part of the customer onboarding process. There is also a thorough background AML check involved to make sure that the person is not involved in any terrorist or money laundering activities. The Video KYC verification process also uses Artificial Intelligence methods like blink tests to check the liveliness. Machine Learning algorithms are also applied to catch cases of identity theft mostly found in aadhaar verification. 

The process of video KYC for banks starts with the customer entering the Video KYC portal of the respective bank or financial institution planning to onboard a new client. The customer then proceeds to upload the images of government-issued ID cards like the Aadhaar or PAN card. After this process, the video call initiates and once the network and other external factors checks are performed, the validation process starts. There is a live feed where the customer needs to show the ID card again. Later he/she is asked certain identity details by the KYC agent in case of an assisted KYC. In the case of a Non-assisted video KYC process, the customer needs to fill out the details themselves and submit them for review. The AI software works throughout this digital KYC onboarding process and provides confidence scores. This are then reviewed by the bank officials and then approved by the KYC documents.

Way ahead

Since digitization is no more of a necessity than a luxury right now, organizations are swiftly adopting ways to make the digital transformation process smoother. In all aspects, a digitized system would mean an enhanced and seamless digital customer onboarding process. Also, online background verification and VCIP services provided by the institutions adds to a better customer experience. Keeping up with the norms of contactless service and social distancing, Video KYC verification process, commonly known as the Digital KYC process, is a technology that is indeed here to stay and grow.

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