Banks have had a reputation for being one of the early adopters of change – especially when it’s about improving the customer experience and making their lives easier. So, when the RBI released its Amendment to Master Direction (MD) on KYC in January allowing an additional method of conducting the KYC process – Video-based Customer Identification Process (V-CIP), the banks and financial institutions were up for it. In this article, we will try to deconstruct what, why, and how of Video KYC for the banking industry.
What do we mean by Video KYC?
Video KYC or more commonly referred to as V-KYC is the process of conducting KYC (Know Your Customer) verification through a video call. Essentially, the KYC officer or bank official gets on a video call with the customer to authenticate the documents, signature, and facial recognition along with other liveliness checks to establish authenticity. Based on the data collected and other checks and balances, the bank official approves or rejects the KYC application.
Why Banking Sector adopted V-KYC?
It was not just about Reserve Bank of India’s announcement of conducting KYC over a video that led to its widespread adoption by large and small banks alike. There are other benefits of Video KYC as well. Some of them have been discussed in the following section.
1. Remote Onboarding of Customers
Video KYC has led to the digitization of OVD collection, facial recognition, and geo-tagging to authenticate customer’s locations. That in turn has allowed the banks to onboard new customers remotely. This has been particularly useful in the current pandemic wherein social distancing norms are in place along with the panic among the people. They are sceptical as well as advised to not visit public places unless absolutely necessary. The video-based customer onboarding eliminates the need for physical in-person verification. Thus, adhering to the health guidelines while optimizing cost and saving on the traveling and other costs related to a field agent.
2. KYC Completions in Minutes
Do away with the long and tiring KYC verification process. With Video-based KYC, the banks can complete the whole process within minutes. This allows them to onboard more customers in less time. Additionally, not having to wait in long queues or waiting for days to get their KYC done also improves customer experience and satisfaction.
3. Reduce Drop-offs by 20%
The key is to have omnichannel customer engagement. Whether it’s about scheduling KYC appointments via bank’s website or sending joining link over an SMS or email or frequently following up with the customers using dialers and other outbound tools – it’s all about providing a holistic experience. Doing so will significantly reduce your drop-off rate and increase KYC completions.
4. Customer Convenience
The customers can finish their verification process from the comfort of their home rather than having to visit the bank’s branch to open a savings account or apply for a loan. More importantly with the right Video KYC Solution, the banks can also offer Video KYC at internet bandwidth as low as 60kbps. This widens their reach while ensuring that even people in low internet connectivity areas can easily complete their KYC and enjoy the banking benefits.
How Banks Conduct Video KYC?
Nowadays all the major banks in India have started using Video KYC for savings account, credit card, Personal loan, and other banking services. Allowing the customers to enjoy anywhere anytime banking.
Here’s a checklist to help banking customers be prepared before they opt for Video KYC:
- Your Aadhaar No. / Virtual ID
- Your PAN card
- Your mobile phone
- A white sheet and a black pen
- A well-lit room
- A plain wall behind you
- Decent internet connectivity
- To be physically in India
Let us now look at the steps of Video KYC for banks.
Visit the bank’s website and fill an online form with basic details – name, address, photo, etc
Provide the bank consent to fetch Aadhaar details and enter the PAN number or conduct an e-PAN verification.
Provide the bank access to your device’s location which is geo-tagged
Get on a video call with the bank official (keep your documents ready)
Schedule a video call at your convenient time. You will get the link via an SMS along with application number
Bank official performs face recognition, checks OVD using OCR, has a liveliness check by asking random questions, or asking the customer to perform random tasks along with verifying the image and signature of the applicant in real-time.
Once the officer has collected and verified all the information, she/he will recommend their approval or rejection of the application.
After the bank official, all the details are sent to the Auditor who cross-verifies the details and views the recording of the video call. After that, she/he approves or rejects the application.