How India has received RBI’s VCIP
It has now been more than nine months since RBI released its landmark notification on V-CIP, allowing banks and NBFCs to use video-based KYC methods to onboard customers.
Several banks have since been using Video KYC to great results, with nearly all of SignDesk’s clients reporting significant reductions in onboarding costs, increases in efficiency, and customer acquisition.
The timely introduction of video-based onboarding has allowed several millions of people to open accounts remotely in the current pandemic-fuelled scenario.
Following the success of video KYC in the financial sector, both SEBI and IRDAI have also introduced provisions for video-based KYC in the form of VIPV and VBIP, allowing remote investor onboarding and insurance onboarding.
However, due to the novel nature of video-based onboarding, questions still abound regarding the implementation and operational aspects of video KYC.
Therefore, in the interest of businesses who are still on the fence about video KYC, we’ve collected ten things that everyone needs to know about VCIP before going ahead and implementing video-based onboarding methods.
What everyone needs to know about Video KYC
VCIP was preceded by digital Aadhaar-based KYC verification, which involved capturing a live picture of the customer and verifying the customer’s Aadhaar online. However, this method of digital KYC was impractical and involved a Rs. 20 cost on each KYC transaction.
The new video-based KYC method envisages a video call between the customer and a representative from the financial institutions onboarding the customer.
Here are ten things everyone curious about VCIP needs to know about this video-based KYC method.
- Only banks can perform online Aadhaar authentication
RBI’s circular on VCIP states that banks can authenticate a customer’s Aadhaar either through online eKYC or offline using either an XML file or QR code. The banks further must ensure that the XML file or QR code is no more than three days old at the time of VCIP.
Registered entities performing VCIP who are not banks can only use offline methods to authenticate a customer’s Aadhaar.
Additionally, the entity performing VCIP must ensure that the customer’s Aadhaar number is either blacked out or redacted for data privacy purposes.
- Officials must be trained to perform VCIP
Banks must ensure that the officials performing VCIP are given appropriate training. Additionally, the activity log and credentials of the officials performing VCIP must be preserved.
- VCIP must be triggered from the domain of the financial institution
The process of video-based onboarding must be initiated from the web domain of the entity performing VCIP. This means that the bank or financial institution undertaking VCIP cannot invite a customer to complete the onboarding process using a third-party service provider, and must ensure that the customer is on the entity’s domain when starting VCIP.
- Concurrent audit must take place on VCIP
RBI has mandated that a concurrent auditing process accompanies VCIP. Any account created using VCIP can only be made active after ensuring that a concurrent audit has occurred.
A concurrent audit implies that the auditing process for VCIP occurs simultaneously with the onboarding process.
SignDesk’s digital kyc solution ensures that the auditing process is concurrent by providing a separate auditor portal and credentials for an auditor to log in and monitor the process.
- Video call must be recorded and stored
The video-based interaction between the official conducting VCIP and the customer (which consists of a randomized sequence of questions) must be recorded and stored along with the date and time-stamps.
The storage must be done in a safe and secure manner. Additionally, the official must watch the recorded video interaction before approving the customer’s KYC to ensure that the video is not pre-recorded.
- VCIP must be seamless & secure
RBI’s VCIP notification states that the official must ensure that the process is “seamless, real-time, secured, end-to-end encrypted.”
Additionally, the official must ensure that the quality of the video interaction is of sufficient quality to allow customer identification beyond any doubt.
Our video KYC solution makes use of AI and ML techniques to provide a seamless onboarding solution and industry-grade data security to ensure that the process is encrypted end-to-end.
- Financial institutions can use AI & other technology to improve VCIP
RBI encourages financial institutions to utilize the latest in AI and other technology to improve VCIP and provide an easy-to-use and automated onboarding process to their customers.
Additionally, financial institutions must carry out security audits and validations on the VCIP application before rolling it out.
SignDesk offers facial recognition, automatic data extraction, verification, and document image verification to make VCIP seamless, quick, and completely automated.
- Geo-tagging to determine customer location
Geo-tagging technology is to be used to ensure that the customer is located within India during VCIP.
- Financial institutions must ensure that the video is not pre-recorded
The official conducting VCIP must ensure that the video interaction is not pre-recorded. According to RBI’s notification, this is to be done via an audio-visual interaction between the official and the customer, in the form of a sequence of randomized questions.
Additionally, the video of this interaction is to be recorded and watched at the end of VCIP by the official to be absolutely sure that the video is not pre-recorded.
- VCIP is completely digital and paper-free
As envisaged by RBI, VCIP takes place entirely online and uses zero paper. This helps financial institutions significantly reduce onboarding costs due to the decreased paperwork and reduces the turnaround time for onboarding customers as documents are verified instantly, and officials are not required to physically interact with customers to onboard them.
The digital nature of VCIP also allows banks and NBFCs to onboard more customers quickly, as onboarding is completed within minutes through Video KYC and takes minimal effort on the side of the onboarding officials.
Trusted and award-winning onboarding solution
Now that you know more about VCIP, it’s time to see what video-based onboarding can do for your business!
Our video KYC solution featuring the vipv ML-based facial matching and data verification methods, has helped 50+ major banks reduce onboarding costs by 90% and TAT by 99%. We’ve also been awarded the Global Banking and Finance Review’s Best KYC/ Digital Onboarding Product of 2020 in India.
We use ML-based facial matching and data verification methods to provide a seamless, secure, and cost-effective onboarding solution that customers find straightforward to use.
Are you ready to onboard faster at significantly lowered costs? Book a demo with us now!
