Assisted & Non-Assisted KYC Verification – All You Need To Know

What is Assisted & Non-Assisted KYC?

KYC, often known as “Know Your Customer” or “Know Your Client,” is a set of rules for verifying a user’s identity before or while transacting business with banks and other financial institutions.

The process of KYC verification can be undertaken in two ways – assisted and non-assisted KYC verification.

Assisted KYC verification is an iteration of the KYC process in which a registered official from the business conducting KYC, helps the customer carry out the KYC check.

In contrast, non-assisted KYC verification or self KYC is when the customer completes the KYC verification with no assistance from an official.

KYC verification is an integral part of the Customer Due Diligence (CDD) process, to mitigate risks of fraud and financial crime by ensuring compliance with AML/CTF regimes. Additionally, strong KYC checks help boost onboarding efficiency, reduce expenses, and provide customers with a seamless onboarding journey. 

Assisted & non-assisted KYC may be carried out by businesses in select industry segments as mandated by regulators, with each type possessing its own set of advantages for businesses.

Types of KYC for Businesses

The following are types of KYC that prevalent among enterprises:

Physical KYC

This type of KYC verification uses physical copies of the address and identification documents that have been self-attested. Customers must personally visit the bank, fund house office, or KYC Registration Agency to deliver the signed form and the necessary supporting documents.

Aadhaar-based eKYC

This technique uses information acquired by the Unique Identification Authority of India (UIDAI) to remotely authenticate customers. Customers can choose biometric verification or Aadhaar OTP-based verification.

Offline KYC

The user inserts their Aadhaar number and the OTP they received to decrypt an Aadhaar XML file holding their KYC information during the offline KYC verification process. Alternately, offline KYC can be completed by scanning the Aadhaar card’s QR code.

Digital KYC

KYC verification is completed online in this case. The customer takes a picture of themselves, takes live photos of the original documents, and uploads scanned copies of their KYC documents. After that, OCR is utilized to extract data from the document images, which is then compared to KYC information acquired via APIs.

Digital KYC can be either assisted or non-assisted.

Assisted & Non-Assisted KYC: How It Works

Online KYC verification is among the most useful tools for businesses. Customers can be onboarded and verified remotely at low costs and high speeds. 

The online KYC verification process may be carried out in one of two ways.

Assisted KYC Verification

The assisted KYC verification was first introduced in the form of the VCIP (Video-based Customer Identification Procedure) by the RBI for KYC verification in banks and NBFCs.

The process was then also adopted by the IRDAI and SEBI for onboarding in the insurance and securities segments, respectively. As mentioned previously, this process involves a registered executive taking the customer through the KYC process.

Here’s how assisted KYC verification works. 

• The executive starts the procedure by sending an invite to the customer’s email or cellphone number.
• The customer will be taken to the web portal after clicking the link, where they must upload the required documents.
• The executive initiates a video call during which the executive and the customer will speak directly to one another.
• The customer first presents themselves to the executive. The executive taps the record button on his or her screen after informing the consumer that the video call would now be recorded to begin the KYC procedure. Throughout the process, live photos of the customer will be taken.
• The customer must respond to a series of randomized system-generated questions during the video conversation. Furthermore, pictures of the customer’s KYC documents and written signature are taken during the video call.
• After the recording is finished, the executive must replay it to confirm the footage. Verification is carried out to examine the video’s quality and any potential stutters.
• The executive confirms or denies the customer’s KYC and restarts the procedure if the video call clarity is unsatisfactory.
• The executive must preserve the recorded video and end the video call if the video call clarity is adequate.
• Artificial intelligence (AI) is used to verify the provided documents and images using a variety of parameters. The executive’s dashboard shows the outcome.
• After verification, if the recorded video and KYC documents meet the necessary requirements, the regulatory entity confirms the transaction; otherwise, the transaction is rejected.
• The transaction information will show up on the Auditor Dashboard if the regulated entity approves the transaction. Based on the given transaction facts, the auditor must either confirm or deny the transaction.

Non-Assisted KYC Verification

The Department of Telecommunications (DoT) was among the first regulatory bodies to permit non-assisted KYC verification. Recently, other regulators in the BFSI sector have selectively permitted self KYC in a few scenarios. 

Here’s how non-assisted KYC verification works.

• The client is invited for Self KYC via email or SMS
• The client accepts the invitation & consents to the terms of Self KYC
• Scanned images of KYC documents are uploaded by the client
• A video of the client begins recording
• The client captures live images of the uploaded KYC documents
• Liveness checks and geo-tagging ensure the client’s presence
• The client then answers randomized questions displayed on the screen
• OCR Verification & AI extract data from images and verify these in real-time
• The video stops recording and all the data including the video and KYC documents are stored
• An executive assesses these materials and accepts or rejects the client’s KYC
• The client is onboarded successfully or invited for Self KYC again.

Assisted vs Non-Assisted Video KYC Verification – Know The Difference

Although both methods of verification are an advantage over the physical verification of KYC, both have differences in their methodology:

Assisted or Non-Assisted KYC – Which To Choose For Your Business

Since the regulatory requirements pertaining to assisted and non-assisted KYC uphold the assisted form of KYC verification, it’s advisable for businesses to err on the side of caution and undertake assisted KYC checks in most cases.

Businesses in the insurance, finance, securities, and telecom sectors are required to onboard customers using different forms of assisted KYC verification.

Banks and NBFCs must utilize VCIP, insurers are required to comply with VBIP, securities intermediaries must onboard using VIPV, and TSPs have their own onboarding procedure. 

However, TSPs can also leverage Self KYC for issuing new connections according to the regulations of DoT. 

Non-assisted KYC is faster and more efficient to use for customer onboarding but isn’t emphasized in the regulations. This means that it could be a good fit for smaller to medium-sized businesses in regulated sectors, that require a quick KYC process for low-risk transactions such as opening half KYC accounts, small loans, etc.

Additionally, Self KYC is a convenient alternative for businesses in healthcare, education, retail & FMCG, manufacturing, construction, real estate, and more. Customer onboarding isn’t heavily regulated in these sectors, and businesses here also require both speed and security, making Self KYC the perfect option.

Self-onboarding may be completed using just a smartphone in minutes, and hence is more conducive to smaller transactions that are highly unlikely to pose massive AML/CTF risks.

But with this being said, businesses must ensure that they’ve got strong transaction monitoring and due diligence procedures in place in case of fraudsters slip through the KYC cracks.

To sum up, assisted KYC verification is the recommended form of KYC for regulated businesses.

However, Self KYC can prove to be a more cost-effective and efficient option in certain circumstances. Therefore, businesses must weigh the pros and cons before choosing which KYC verification procedure to go with.

Scan.It: SignDesk’s Video KYC Solution For Assisted & Self KYC

Accurate and trustworthy liveness and KYC checks are crucial for digital onboarding and authentication processes as more and more companies go digital. The deployment of a clever and user-friendly solution for KYC checks can help significantly reduce fraud risk and onboarding costs while providing the user with a simple video verification experience.

Assisted and non-assisted KYC verification can lessen the likelihood of facial spoofing and makes onboarding time and cost-efficient. An intelligent and convenient method of completing liveness checks that are driven by AI allows people to do so while being virtually inspected.

Businesses can easily enroll customers without running the risk of fraud thanks to efficient verification services provided by video KYC providers like SignDesk be it assisted or non-assisted KYC.