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 and has affected almost everything in the world. Several industries experienced disruption like healthcare sector was under pressure due to the overflow of operations. This situation was hard to control and 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, the regulatory authority has approved KYC video identification for digital customer onboarding in banking. Undertaking online verification of documents like Aadhaar verification, PAN card verification; these institutions used video KYC solutions for everything.
One of the ways adopted was the implementation of a Video KYC verification process also known as eKYC onboarding solutions. It offered online aadhaar verification services to the customers. The government imposed lock-down restrictions created a roadblock for the operations of the financial, insurance & NBFC industry. As these industries’ work highly relied on personal contact and manual work, the improvisation that came on this front was digitization.
What is Video KYC Verification Process?
Video KYC is the process of conducting KYC video identification operations using video conferencing technology at one’s comfort. 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). This has made the identification and verification process easier and much accessible easing digital customer onboarding. The video KYC banks process has eased the complex operations.
The process of Video based Customer Identification Process (V CIP KYC solution) connects the customer to the bank via 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 customer 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. The person performs the document verification process consisting of aadhaar verification, PAN card, driving license verification. The process does not use any third-party application and follows the inbuilt video conferencing method. It uses the website or the mobile application of the concerned bank for Video KYC process. The move to use Video KYC or VCIP KYC solution also called 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 the video KYC process?
Although digital customer onboarding and online background verification services long existed but the pandemic provided them a great boost. The main reason for it being the fact that it promoted contactless services. Customers are the victims 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 KYC video identification solutions. According to an article by Financial Express, a 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. Identity verification of the customer and validating the documents, running background verification forms an important part of the customer onboarding process. There is a thorough background AML check 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 in the VCIP KYC solution to counter identity theft found in aadhaar verification.
The process of video KYC for banks starts with the customer entering into the Video KYC portal of the respective bank or financial institution. The customer then proceeds to upload the images of government-issued ID cards like the Aadhaar or PAN card. After this, the video call initiates and the official performs network and other external factors checks and then starts the validation process. There is a live feed where the customer needs to show the ID card again. In the case of assisted KYC, the customer has to answer certain identity questions asked by the KYC agent. 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 client onboarding process and provides confidence scores. These are then reviewed by the bank officials and then approved by the KYC documents.
Way ahead – The Future of Video KYC Verification
Digitization is no more of a luxury right now than a necessity. Organizations are 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 V KYC solution provided by the institutions adds to a better customer experience. Keeping up with the norms of contact-less service, the Video KYC verification process, commonly known as the Digital customer onboarding process, is a technology that is here to stay and grow.