For making any financial investment, you need to get your KYC (Know Your Customer) registered, which is essential to prevent money laundering and tax avoidance. In most cases, the institution through which a person wants to invest, accepts KYC form along with investment form and get the KYC registered before processing the investment.
To ensure if the KYC status remains same or if it has changed, financial institutions ask investors to update their KYC periodically.
To register or update KYC physically, an investor needs to visit the institution and stand in queue to submit the form along with supportive documents, which is inconvenient and time consuming.
For individuals, Video KYC will save a lot of time and effort by enabling them to be able to complete KYC online and remotely without having to visit the branch or have someone come to their house. In addition, because identification is done in real-time, users will enjoy smooth and instant signup as compared to paper-based KYC process which can take days or even up to weeks to get verified before having access to the service.
There are several ways Video can help in providing a remote and paperless onboarding process that minimises the cost and eliminates traditional bureaucracy.
Here are two common eKYC processes:
Self-service KYC (one-way communication)
This experience is akin to filling up a video-based questionnaire. After submitting the basic details, it will dynamically ask customers a few questions to which their responses are recorded via a video call. In the end, the customer can review the responses and give consent to it before submitting the information.
Due diligence is then performed on the recorded data by the organisation. This solution verifies customers’ identity without the need for agents, and thereby reduces operational cost. At the same time, it complies with current regulations.
Interactive KYC (two-way communication)
Alternatively, the customer can get into a video call with the representative who can verify the information uploaded and authenticate the customer. Together with e-signature and facial biometrics, this solution verifies customers’ identity in real-time and comes with the same level of security and legality as face-to-face identification.
However, unless the communication system is embedded in the infrastructure provided by the financial institutions, investors may have to use a third party application like Skype, WhatsApp etc that may lead to security issues due to compromise of investors’ personal information.
EnableX is one of the providers of the eKYC infrastructure and is working with a couple of financial services companies globally, enabling them to do seamless Video KYC.
According to Pankaj Gupta, CEO & Founder, EnableX, “Automated and immediate eKYC onboarding helps businesses increase their customer conversion rate and increases customer satisfaction, as individuals can now make use of the services that they sign up for, from the first moment the business contacts them. Moreover, the other key benefits to the businesses include less documentation and reduced resource requirement which eventually helps in bringing down operational costs and increasing revenue.”
Now with the legal framework in place, it would help financial services companies to implement Video KYC in India.