Easy Steps to a Fully Compliant KYC Onboarding Process

The customer onboarding process can be complex, but thanks to digital KYC onboarding, it has become simple, safe, and secure. It is vital to verify the identities of new and old clients. Doing KYC at regular intervals helps you to ensure that nothing has changed, like the address, phone number, etc., of your customers.

Do you know you can make the Onboarding process simple by opting for the video KYC process?

As we know, manual KYC is not as effective; there are frauds taking place. Every organization wishes to accurately verify customers and that too in a timely manner to allow its business function properly.

With the usage of digital technology for automating the ID verification process, businesses can provide a smooth experience to their staff and customers. With the digital ID verification, businesses can help onboard new customers as well as employees remotely in the time of the coronavirus pandemic. Digital KYC reduces risk by providing higher safety and facilitates compliance with regulations such as Anti-Money Laundering (AML).

How Digital Onboarding is Done?

Digital onboarding is a simple process, which doesn’t take much time. The user has to video chat with the video ID verification expert, and the expert ensures that the video call is not a pre-recorded one; it’s live. The expert records the video call, but the user is not allowed to do so. The expert asks the user to share his location coordinates; it’s done to ensure that the user is in the same country as the expert. The expert asks few questions to the user, and after that, the user is asked to show government-issued identity cards. He may show them into the camera, or he can upload them by clicking pictures. Artificial intelligence, facial recognition technique, document reader are used to ensure that the documents are not fake and the person on the video call is the same as on documents.

Many businesses are using digital technology or customer onboarding process as it is convenient. The person can complete the process from the comfort of his home. There is no need to visit the bank for the ID verification process. Also, bank employees had to spend a significant amount of time to complete the KYC process manually. Thanks to the video identification process, the process takes just minutes.

Final Words

KYC onboarding is a process in which the identity of the user is verified digitally. The user interacts with the KYC identification expert and shows or uploads documents. The process is a highly sophisticated one and follows security measures. It saves time and money for businesses as well as users. Users can complete the process from the comfort of their homes as they don’t need to be physically present in the bank or financial institute to complete the KYC process.

Why is KYC Compulsory, and why must Banking Institutions Perform it?

Criminals and money launderers use fraudulent identities during the onboarding process to mask their true identities. KYC in banking requires banks to "get to know" their customers by using by confirming to a high level of assurance that those customers are who they say they are.

Nowadays, KYC is done online; that's why banks are looking for effective solutions and technologies that can effectively verify customers remotely.

The central bank has said that digital KYC, i.e., capturing a live photo of the customer along with valid identity documents such as Aadhaar card, PAN card, or other government-approved identity cards and the latitude and longitude of the location where such live photo is being taken by an authorized person of the Reporting Entity (RE).

The reporting entities (REs) would record the entire session and capture photographs of the customer present for identification. The information collected will be like this:

• Reporting entities, apart from banks, for the goal of identification, can only carry out offline Verification of Aadhaar.

• Banks are allowed to use either offline Verification of Aadhaar or OTP based Aadhaar e-KYC authentication for the purpose of identification. During the video KYC process, the customer should display a clear image of the PAN card to the reporting entity (RE); if e-PAN is provided by the customer, then it will work. In addition to that, the assigned officer should make sure that the photograph of the customer in the Aadhaar/PAN details matches the customer undertaking the video KYC.

How can Video KYC help Regulated Entities?

With video KYC, there is no need for the customers to go into a branch, wait there, and provide paper copies of proofs and wait for several days to complete the account-opening process. Video KYC reduces the cost of onboarding and changes the way bank accounts are opened in the future. Video KYC process is beneficial for both financial institutions and customers as it saves time and money. It costs between 150–200 rupees for face to face onboarding. Video KYC reduces this sum to a fraction and makes the whole process quick and hassle-free. 

The forms of ID that are supported within Video KYC

Customers can provide their Aadhaar card and PAN card as identity proofs. Banks can use either Offline Verification of Aadhaar or OTP based Aadhaar e-KYC authentication. All other financial institutions are only allowed to do Aadhaar Offline verification. To ensure that the Aadhaar offline files are not more than three days old, the customer is asked to download the files during the live video call. It is done to ensure that the rightful owner of the Aadhaar is downloading the offline file. Also, the customer can't record and upload Videos; only regulated entities can record the video. It is the duty of the regulated entity to make sure the process is seamless, real-time, secured, and end-to-end encrypted.

Final Words

Video KYC is an easy way to complete the KYC process. KYC payment is made when you verify your identity.

A Brief Introduction to Video-Based KYC Authentication - How It Works, Features & Fruitful Benefits

The video-based KYC authentication or video customer identification process launched by the RBI (Reserve Bank of India) for digital wallet providers, financial institutions, Non-banking financial companies (NBFCS) & other sectors regulated by the central banks. It is the consent-based alternate method of KYC in which customers can open new accounts via facial recognition and video-recording apps. However, the banks can get benefits from the artificial operated digital KYC to prevent money-laundering cases or fraud actions.

How Video KYC In Banking Works?

The working model of Video KYC in banking relies on face-matching tools and the latest technologies to ensure that the person who has gone through the process is genuine or belongs to the country. The step-by-step procedure to perform the bank grade digital KYC is given below.

●      The financial entity can coordinate with the customer to know his suitable timing to start the video-conference or face interview.

● Once the customer gets online with documents (Pan Card, Driving Licence, Aadhar Card) in the app through the smartphone, the bank employee also gets available with his app or website simultaneously.

● Remember, this KYC authentication is entirely done by the video-recording that means the documents that customers will show to the bank concerned person are recorded in the one footage. The bank agent may ask a few questions while making the account in video KYC that will be treated as a proof which one can’t change in the future.

● Moreover, the bank provides an interface to the users in which they can fill the personal instruction after reading the declaration and pop-up messages. Make sure the method of filling the application may vary from bank-to-bank. 

● There is no need to scan the photo and signature to submit the authorized officer of the bank though they directly take the digital signature from you. Even it captures the live photo along with detecting your live location to establish the identity in video-based digital KYC.

Salient Features of Video KYC in Artificial Intelligence Style 

There is an extensive range of features specially designed for the KYC AI that are mentioned below:

Real-Time Verification

The video customer identification system allows the extraction of details from ID cards in the real-time method. In this case, customers are free from the mess of filling permanent account numbers manually again & again.

How to Submit a Pan Card in Digital KYC?

●  Open the video chat and hold the PAN Card properly with both the hands. The official person will take the card details in the video to assure from the issuing authority that the details are correct.

● On the other hand, the geotagging is used to trace the live location of the individual, which demonstrates the person is physically present in India and ready for the digital KYC.

●  The date and time stamping is done by the banks to maintain the records carefully.

How to Submit the Aadhar Card in E-KYC Authentication?

The process of Aadhar submission is similar to the PAN card verification in digital KYC. Still, it can be OTP based, and even individuals can schedule a time & date to start the onboarding process based on their personal choice. Some entities may authenticate the Aadhar card offline that means there is a wide array of ways to verify the customer identity.

In-Person Portal Verification

The bank-grade digital KYC offers in-person portal verification systems that are used to approve the final KYC by the agents. The technique is far better than traditional bank opening account systems as there is no pressure of managing the bunch of files.

End-to-End Security

The end-to-end encryption is practiced while operating the KYC in banking that ensures that no third-party can steal the recorded data which has been sent by the users. All the information is encrypted and securely saved in the database servers or cloud by the banks to manage the further retrieval process. 

Benefits of KYC Identification

●        End up the cyber frauds.

●        100% application accuracy.

●        70% reduction in back-office overhead expenses.

In the Nutshell

Video KYC onboarding solution is one of the powerful ways to wind up the identification process in minutes. Are you crazy to know more about digital KYC and how it enhances the productivity of Fintech Businesses? Explore the Signzy to get the instant automated back-office operation services using AI technology.