The onset of COVID-19 has brought several disruptions to the banking & financial industry. It made it necessary for financial institutions to use digital technologies and innovation to keep the industry running, of which the most noteworthy is the approval given by RBI for video KYC verification as a remote onboarding solution.
With safety being one of the top concerns across the board, more and more banks and financial service providers are adopting the latest technologies to facilitate a speedy, safe and seamless experience for customers.
Video-KYC solutions as an alternative to the conventional in-person KYC authentication are beneficial to banking & lending institutions and lay an excellent foundation for the NBFCs and the next generation of small FinTech startups.
As a technology-driven fraud detection solution, video KYC is likely to transform the financial ecosystem, making it much simpler for service providers to complete due procedures.
Potential Of Video KYC Verification For The Future Of Financial Sector
Besides playing a key role in remote onboarding and customer verification protocols for banks, video KYC India is expected to play a far more significant role for the entire financial sector. This is because multiple regulators in India, including IRDAI and SEBI, now allow entities they manage to conduct video KYC.
This digital KYC method enables various financial sector players to onboard, verify and authenticate their customers with greater convenience.
Unlike the traditional KYC methods, the process of video KYC involves simply capturing a live photo of the customer with valid KYC documents such as the Aadhaar card taken by a trained official. Additionally, digital signatures and equivalent e-documents are also allowed by the government as a means of completing the video KYC process.
Top 7 Benefits Of Video KYC For The Financial Sector
Among the key benefits of the video-KYC verification process for the future of the financial sector include –
1. Much Faster Customer Onboarding
The traditional KYC process is usually time-consuming and very cumbersome. Video KYC, on the contrary, can allow financial players to finish KYC in a single video call. Banks and financial institutions can use this time saved to get more customers on board at a much faster speed.
2. Lower Turnaround Time
Unlike the usual KYC request taking 10-15 days and higher chances of drop-offs as several entities are involved, video KYC is almost instantaneous and reduces drop-offs significantly. It also streamlines the overall process due to real-time interaction between the customer and the representative.
3. Better Customer Experience
When it comes to financial services, customers prefer service providers ensuring a smooth and hassle-free experience with streamlined process steps. V-CIP (Video Customer Identification Process) allows customers to get their KYC done remotely from any convenient location. Such a quick and seamless experience leads to a better customer experience and increases the customer’s loyalty to the service provider.
4. Lower Customer Acquisition Cost
The video KYC process eliminates the need for travelling by either the customer or bank representative. Additionally, there is no need for the physical processing of the documents in this mode, leading to a considerable reduction in costs.
5. Lower Risk
Risk mitigation is another significant advantage of the video KYC process. In general, conventional KYC processes are outsourced to third-party vendors increasing instances of sensitive documents being mishandled. With video KYC, the financial institution reduces this risk and controls the overall end-to-end verification process.
6. Higher Data Security
Compared to the traditional KYC process, the customer data remains more secure with video KYC in India. This is because fewer entities are involved in the process, and the data remains unexposed as the process requires no other intermediary. Further, the video KYC solution uses advanced AI and ML techniques for authentication solutions, which is much faster at capturing and verifying information.
7. Growth Of Financial Ecosystem
Because of being cost-efficient, video KYC verification can be a great alternative to fintech or small financial services providers. Since such small businesses generally don’t have the budget to build a physical KYC infrastructure. Hence, going digital helps small businesses grow and expand the overall financial services ecosystem.
To Wrap
With digitisation reaching its peak due to the ongoing pandemic, video KYC in India will act as a boon for the financial industry in the near future. Such a solution streamlines opening banking/investments/trading accounts with banks and other financial service players.
With more and more financial institutions taking digital transformation head-on, video KYC is one future trend that will stay here for long. But if you’re also looking for professional video KYC solutions, it is advisable to go with certified providers.
For instance, AuthBridge is a leading player offering KYC verification solutions with minimum hassle and record turnaround time for any financial product offering, including savings accounts, credit cards, insurance or personal loan