Video KYC Solution:
The recent amendment in The Prevention of Money Laundering (PMLA) Act 2002 by the Ministry of Finance allows several modes of capturing details of customers electronically. The notification states that the government should bring in, digital KYC to capture customer details electronically. Though the government has not yet mentioned video KYC in the amendment it makes way for the Reserve Bank of India to come out with such guidelines in the near future.
Banks are now allowed to carry out an Aadhaar verification for any person who uses their Aadhaar card for identification. The proof of possession of the Aadhaar card has been added to the list of official documents needed for verification.
Digital KYC means capturing a live photo of the client with official valid documents such as the Aadhaar card or any other government document. The photo is taken by a government official. Digital signature and equivalent e-documents have also been allowed by the government as a way to complete the digital KYC process.
The expert committee of micro, small, and medium enterprises (MSMEs) has suggested that the video KYC verification can be used as another way to verify the identity of a person.
How Video KYC Boosts Businesses
The PMLA Act states Investment platforms, telecom companies, and lenders can acquire details of the customer digitally before acquiring them on their platforms. The ease of performing a video-based KYC is extremely cost-effective and saves entities a lot of time. A report by the expert committee of MSMEs has suggested certain steps to perform KYC through the video.
The following steps must be followed to perform a video-based KYC:
- Customers of MSMEs need to register on the website or mobile app of the entity
- The customer then schedules a date and time for the sign-up process to start
- The customer also needs to share images like proof of address, proof of identity like their passport and driving license with the entity
- As a next step, the MSME offers an available date and time which is closest to the customer’s preference
- Once the customer accepts the offer on the agreed date and time an OTP will be generated
- The MSME then reaches out to the customer as per the date and time agreed upon
- A video call is then initiated for Android users using Google Duo and Facetime for iOS users
- Customers are requested to display the original identity documents and read out the name as it is on the document
- The representative on the other end verifies the details with the previously shared image
- Once the verification is complete the representative confirms the completion of the KYC video identification
Image proof of identity and address with the video id KYC is uploaded to the platform for digital identification. Once the verification process is complete the customer is duly informed. If any customer is not comfortable with the digital process an option of a physical visit by the MSMEs representative is possible.
Advantages of Video KYC in India
- Video KYC verifies customers using Optical Character Recognition (OCR) and is done all in real-time
- The process for video KYC can be done at the convenience of your home. All you need is a laptop, smartphone, or tablet with a working internet connection
- All interactions are stored for the future and recorded
- Supports all types of documents which are PAN, Aadhar, Drivers License (DL) Voters ID and Passport
- Onboards customers extremely fast using Artificial Intelligence
How does Video KYC Impact us in 2019?
Several banks and lending institutions have started the process of implementing guidelines for an effective video KYC process. Multiple products such as remote onboarding of savings account customers and acquiring a credit card can be done through the video KYC process. A lot of non-banking lenders are also in the process of implementation.
Here are a few key points on how video KYC will impact and benefit us in times to come:
- Prevents scams and malicious activity from taking place
- Dealing with criminal activities such as money laundering
- Making sure investor assets are safe
- Helps in fighting fraud
- Creates a streamlined process through automation
- Reduces paperwork
- Extremely cost-effective
Digital KYC – The Future
SignDesk has come up with a product called Scan.it which helps users to submit KYC information through a video. Customer experience is improved through digital video while saving on several KYC costs. Scan.it onboard customers securely and within seconds using AI-based technology.
You can use scan.it for client on-boarding, user Registration, processing high profile transactions, re-verification of existing users. Scan.it also ensures regulatory compliance and replaces the outdated authentication mechanism.