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Video-KYC: The Way Forward for Digital Customer Verification

video KYC verification
In: Business

With the setting in of the COVID-19 pandemic, quite a few things have become a part of the ‘new normal.’ With employees working from home, businesses took the online mode as it was the need of the hour.   

Thus, the KYC solutions such as video KYC verification became the latest innovation for onboarding customers instantly while keeping a tab on their records and ensuring utmost safety even while working remotely. 

Let’s dive deeper into the subject to understand the different aspects of video KYC verification and what it holds.

What is Video KYC Verification?

Video KYC, i.e., ‘Video Know-Your-Customer’, as the name suggests, is an automated process of verifying customer identity digitally. The process involves completing digital KYC procedures via video call to onboard the customers, using machine learning, face verification techniques, and OCR data extraction for authentication of an individual.

The high customer demands to avoid physical contact, and a way to enhance the cybersecurity protocols have encouraged various background verification companies such as AuthBridge to develop AI-powered tools using their cutting-edge authentication technology for KYC verification.

Video KYC and the Indian Scenario

Since 2019, the speculations have been rife about the launching of video KYC verification by RBI for serving the industry’s need for digitally interactive verification solutions. However, in early 2020, RBI released its notification for officially recognizing video KYC for conducting the process.

Though banks were initially hesitant for making the transition to the digital mode, the nationwide lockdown due to the pandemic made them accept the new way of initiating the KYC process in full swing. Every stakeholder, right from banks and financial institutions, worked hard to make the process smooth.

Benefits of Video KYC Verification

As the stakeholders got used to the new model and the initial queries from all ends were addressed, a recognition of the new way of customer verification and employee background verification and its benefits started making rounds. Let’s explore some of the advantages:

Reduction in time for Customer Onboarding

The biggest advantage that video KYC offers is a significant reduction in the time taken for completing the KYC formalities for the customer. Earlier, the process took a minimum of 4-5 days which is now completed in a matter of minutes. This reduction in time allows banking professionals to onboard more customers, thus increasing the business.

Reduction in KYC Costs

One of the biggest reasons for banks and financial institutions’ inclination toward video KYC is its cost-effectiveness. This process saves time, effort, and cost involved in sending a verification officer to conduct door-to-door verification, which further dents the banks’ operating profit.

No Physical Handover of Documents

For many, carrying the original documents seems to be an unnerving task because of the risk of damage or loss of documents. The problem is effectively taken care of with the help of video KYC verification, as a customer can complete the KYC verification right from the comfort of their homes.

Scheduling KYC as Per Customer’s Convenience

Each one of us has made a couple of visits to get the KYC verification done because of the lack of some documents. Whether you forgot a photograph or the verification officer himself is unavailable, all of this can ruin the overall customer experience. The video KYC allows the customers to choose a convenient slot for conducting KYC verification right from their homes. Their video KYC appointment can even be rescheduled by them if needed.

Future of Video KYC-The Way Forward

The most talked-about attributes of video KYC are versatility and reliability. The online mode of completing KYC proved to be a hassle-free process and provided much-needed relief in the wake of COVID-19. It has brought significant benefits to all the stakeholders, such as customers, investors, banks, insurance firms, non-banking entities, and financial institutions. The video KYC verification is considered to be a well-thought module to achieve a clean base of customers.

Conclusion

There is no denying the fact that digitization has completely transformed the customer and employee background verification check and influenced the way onboarding is done nowadays. With video KYC in place and the automated onboarding process, the friction between customers/employees and organizations has reduced considerably, leading to an excellent customer experience.

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