Offline KYC took a toll on NBFCs, involving customer onboarding costs, documentation costs, and making it difficult for startups to broaden their customer base. The financial inclusion of rural India has been a dream for many of these NBFCs for a long time.
With the onset of Aadhar based e-KYC, NBFCs started gauging into the rural and semi-urban areas, only to find it difficult to onboard customers in a cost-effective and secure manner. And Aadhar KYC became a hanging sword when the Supreme Court, in a notice dated 26th September 2018, declared the use of Aadhar based KYC by private players as unconstitutional. NBFCs were constantly looking for a solution that helped them ramp up their customer authentication process.
Just when the world was going to be hit by a pandemic, Video KYC RBI circular issued its guidelines to allow NBFCs to onboard customers virtually using Video KYC solution in January 2020.
Experts believe that the customers won’t easily adopt the traditional method of money depositing or withdrawing post COVID-19, therefore, an evolution in the financial industry for customer onboarding is required.
However, Video KYC norms has its own set of challenges, some of them are:
- Mindset Shift: Most NBFCs and customers are habitual of doing KYC in a traditional way and the shift towards doing KYC digitally for people situated in rural and semi-urban areas might take some time to adopt this technology. The due diligence to COVID-19, NBFCs have to be prepared with this new way of working remotely.
- Low or Poor Internet Connectivity: Due to low internet bandwidth, the Video KYC completion will take a toll on the customer experience and the completion rate might go down. To ensure maximum coverage for the financial inclusion of rural India, NBFCs will have to revise their existing technology and upgrade their system to perform Video KYC on low internet bandwidth.
- Technology Upgradation: Investing in the new technology of video as an engagement channel and having people trained for it can become very challenging. Upgrading the security for customer’s data and storing that information to ensure there’s no data theft has become a prime concern for most NBFCs. As per compliance guidelines, records are to be stored in a safe and secure manner.
- Adoption of AI-driven Technology: The traditional technologies did not demand the adoption of face detection technology but RBI has encouraged NBFCs and BFSIs to invest in AI-driven face-matching technology.
- Performing Re-KYC on Time: The government has mandated to complete the Re-KYC of each individual in a periodical cycle which in turn takes a toll on the loan aggregators. The KYC completion rate decreases further and the customer onboarding cycle stretches, decreasing the productivity of businesses.
How Ameyo’s Video KYC Process for NBFCs can become the Game Changer?
The contactless KYC can remove the barriers of physical meetings, biometric verification, and the paperwork involved. And customers aren’t prepared for a world of physical meetings to get the KYC done, therefore, it is beneficial to both the customers and the businesses.
Reduced Drop-offs: KYC through Video Call can be completed within 3 minutes and that gives an edge to NBFCs to onboard more customers at the same time. With Ameyo’s advanced Video KYC solution, you can complete KYC on 60 KBPS and increase the KYC completion rate significantly.
Data Security & Compliance: The video recordings are stored on the server, ensuring that there’s no data stored on the agent/RE’s system. Video KYC RBI guidelines require the data to be stored in a safe and secure manner bearing the date and stamp. The REs are subject to bear the onus of customer identification, being 100% compliant with video KYC RBI guidelines.
Along with the data storage requirements, data can be masked to furthering the data security in any circumstances.
Accuracy of Video KYC: The Video KYC completion backed by AI-based face recognition technology eliminates the chances of fraudulence and becomes a reliable source of customer identification. Ameyo’s technology captures the snapshots from the live video even on low internet bandwidth and matches it with the documents provided by the customers to verify the identity of the said customers in real-time.
OSV (Originals Seen & Verified) check is done by the Regulated Entities (REs) using OVD (Officially Verified Document) on the video call. OVD auto extracts the details via OCR (Optical Character Recognition) to match the details of the customer like their name, age, address, etc. with the provided documents. The image is extracted from the documents provided by the customer and is matched with the live video call to ensure maximum accuracy.
Video KYC Completion on Low Internet Bandwidth: Now that NBFCs are putting steps towards the financial inclusion of rural and urban India with Video KYC, it will pose a bigger challenge to the internet fluctuation in remote locations. Video KYC can now be performed at an internet bandwidth of as low as 60KBPS, providing an opportunity to increase the customer base and include people from Tier 2 & Tier 3 cities as well.
Ameyo’s Video KYC solution is tested with 80+ browsers to ensure a high level of compatibility for the companies to perform KYC at ease.
Video KYC data can be monitored to track the productivity of the RE official and the auditor and monitor the accuracy of Video KYC completion. A comprehensive KYC Officer Dashboard gives a quick overview of the KYC completion rate, the average time taken for each KYC, breaks duration, etc. to determine the productivity of the KYC official.
Supervisors or managers can make well-informed decisions after closely analyzing the Auditor’s dashboard that shows details about KYC rejected, approved, and pending. This data, presented in a statistical view, gives managers an edge to analyze the performance of the auditors.
Improve Customer Engagement: Video as an engagement channel gives a personalized customer experience, driving customer loyalty and trust. But, video KYC for loan lending companies is not limited to the data security, it also demands to engage with customers during and after their KYC journey. With Ameyo’s omnichannel contact center software, you can engage with customers on their preferred channels, sending timely voice bot reminders, notifications, and alerts.
Customer drop-offs further decrease when the customers are constantly engaged with via SMS and voice calls. If a customer drops off during the KYC process, they can be provided with a rejoining link to complete their KYC process through Video Call.
Video KYC is changing the landscape of customer engagement and now NBFCs are finding it easy to get customers onboarded across rural and urban areas without having to invest the time and money to verify their customers’ identity. During this time, contactless onboarding is what customers are looking for and it has paved the way for customers to seek assistance from their NBFC loan providers even at the time of nationwide lockdown.