KYC is a process through which a service provider, either government or private, verifies an individual's identity and other particulars linked to the person using documentation such as an Aadhaar Card.
KYC Compliance is essential, as mandated by the government when a customer undertakes any financial services, including buying life insurance. This helps establish the identity and credentials of the customer.
It’s been a while when digitisation has been the norm. It has made banking and financial services more accessible and convenient to the masses.
One of the prime examples is no longer waiting in queues when making an application for a service or carrying around folders of documentation for the same. Thankfully, with the introduction of eKYC, one can now furnish documentation easily.
For instance, the Aadhaar-based E-KYC authentication has been simplified as it is as valid as a Xerox copy of one’s Aadhaar Card.
Kayzad Hiramanek, Chief – Operations and Customer Experience, Bajaj Allianz Life, says, “eKYC is nothing but doing this entire process digitally. It enables efficiency and more critically, ease for customers.”
KYC (Know Your Client) is a process through which a service provider, either government or private, verifies an individual’s identity and other particulars linked to the person using documentation such as an Aadhaar Card.
Hiramanek further adds, “Bajaj Allianz Life, for instance, has digitised the process by integrating with UIDAI systems to do real-time paperless Aadhaar-based KYC authentication. This way the need for providing multiple documents can be avoided, which is usually time consuming and cumbersome.”
Simply put, eKYC is the process of carrying out verification digitally and fast without the need for physical documentation.
How does it benefit?
Simplicity is the first benefit. As it is a digital process, performed in real-time when an individual is buying the policy, they don’t face any challenges. Usually, most companies have enabled eKYC to be completed by an individual easily.
Another benefit is speed. For instance, one’s basic details like name, DOB, gender, address, etc. are instantly picked from the UIDAI server. Thereby, reducing the time required to fill the application form.
Along with that, experts say e-KYC provides the efficiency built for the people. Through this process, important documents such as Identity proof, address proof, age proof, don’t have to be submitted by an individual, thereby helping them to get their work done quickly.
Note that as KYC is a legally mandated process for all financial products purchased, insurers are asked to provide eKYC to their customers.
eKYC can be used for various services such as opening accounts, during the purchase of all new insurance policies and at the time of servicing, claims, etc.
What was the process earlier?
As per the earlier process, customers were required to fill in the personal details in the application form manually and upload the documents by clicking a picture of the document. This has now been replaced by eKYC.
Also, earlier, documents such as identity proof, address proof, photograph, age proof were required to be uploaded as part of the KYC process.