How is the Video KYC Verification Process Transforming Customer Onboarding?

Video kyc verification | VCIP Solutions | Verification Services

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.

Video KYC: A Monumental Step towards Digitalization

Video KYC Services | VCIP Solutions | eKYC Service Providers

Video KYC Process or VCIP Solution: A Monumental Step towards Digitalization

A commonly heard term in the banking industry is KYC (Know Your Customer). KYC is the process or step in which there is an assessment of the customers’ profile. It evaluates the risk associated with the customers of a bank or financial institution. This process ensures that they comply with the Anti-Money Laundering (AML) laws. With emerging technologies like AI, UIDAI Biometrics, machine learning, facial recognition, the concept of Digital KYC took birth. EKYC or Digital KYC verification was able to surpass the issues that the manual KYC process faced earlier. But this method is still lacking complete digitalization. The prominent technology which is helping us to go fully digital is Video KYC verification. This brought a sudden rise in firms offering video KYC solution or VCIP solution for banks.

Background

Though the KYC process is imperative for Regulated Entities, yet past years haven’t proved to be beneficial to bring out novel developments in this field. But as complications began to arise, the process of identifying and authenticating customers got exposed to the risk of frauds. It came under the great threat of money laundering. This has impelled some developments like the video verification process to tackle the ever-rising problems of REs.

 

With the recent amendment in The Prevention of Money Laundering Act (PMLA), the regulators allowed several modes of capturing customer details electronically. This led to various developments of technology across industries including the KYC process in banks. The regulators recognized the downside of the physical presence of the customer and sheer data handling in the KYC process even if it was for EKYC. Digital KYC solution is also known as video KYC verification process. It existed before and is not new. But still, customers find the video KYC bank account opening process cumbersome because they even require to provide the documents in the physical form.

Earlier this year, the Reserve Bank of India (RBI) released an amendment on 9th January 2020 for Video KYC. It added Video based Customer Identification Process (VCIP solution) as another option for KYC verification in the financial community. By this, it intends to reduce the cost of customer acquisition, the errors in KYC documentation and adherence to the AML regulations. Due to COVID-19, in-person interaction has not remained a feasible option. It is no more viable way for verifying documents in the KYC process. Hence, the Video KYC process has become a viable option in background verification.

What is Video KYC?

Video KYC (VCIP) or video verification is the process of digitally authenticating the customers. It overcomes the difficulty of physically examining the documents. KYC verification involves checking all the documents submitted by the customers. And in the absence of technology, it was a tedious and daunting task for humans. The Video KYC solution has surmounted such a huge hurdle. It has brought efficiencies by reducing the expensive customer onboarding cost in the KYC process. This proved to be mutually beneficial for the banks as well as customers.

VCIP solution or digital KYC verification has gained a lot of attention majorly from banking and financial institutions. They experienced an increase in productivity due to minimal human interventions. It also helped in speeding up the authentication process.

The Video KYC process leverages the video call technology in onboarding the customers. This video KYC verification and authentication process has proved to be the most significant development in the field of KYC. It is a simple, seamless and scalable way by which the institutions can acquire customer details and documents before onboarding. It is a reliable system with AI-enabled technology to prevent frauds and check errors.

Steps in Video KYC Process

Video KYC verification is the game-changer for the industry. It has cut down the extensive time-consuming process of document examination from a few days to a couple of minutes. This involved the following, hassle-free steps for the customers –

  • Registering and filling up the details on the online form on the website or mobile app of the Regulated entities (RE).
  • Consent to be obtained from the customers to fetch Aadhaar details, PAN number and other official documents to conduct E-verification. Meanwhile, allowing the bank to access the real-time location of the customer using geotagging software.

  • Scheduling a date and time for the customer onboarding process where banks send a link to the customers to the webpage for video call.

  • The bank official initiates the conversation by asking to display the documents on the video call. The software will grab the details from the documents and verify them with the uploaded documents. 

  • Using the facial recognition technology, the bank will verify the customer on the video call with the photograph on the documents.

  • The bank official will ask randomized questions as per the banks’ internal policy to ensure it a live interaction.

  • After assessing the answers, the bank official will decide whether the customer application should be approved or disapproved. Also, the video call interaction is stored by the official to ensure non-repudiation.

 

The Benefits of Video KYC

  • This type of Digital KYC solution drastically reduces customer onboarding costs.

  • Video Verification services streamline the complex process through automation using Artificial Intelligence.

  • Video KYC solution helps to detect frauds and malicious activity and safeguards the investors.

  • Adoption Digital KYC can help keep a check on criminal activities majorly money laundering

  • VCIP solution utilizes cost-effective technology involving minimal paperwork

 

Conclusion

 

The technology used in Video KYC verification or VCIP solution is robust, secured and encrypted. It ensures the prevention of data leak which, otherwise, might be a data privacy concern. Each and every step in digital KYC verification is done in real-time. This process uses AI-enabled techniques of automated data extraction, machine learning and face matching.

 

Video KYC is monumental but just a mere step in the financial sector. Furthermore, developing impeccable experience in the e-commerce, telecom and networking industry.

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