RBI (the Reserve Bank of India) has now permitted fintechs, banks, and other financial institutions to use new customer onboarding methods. The focus is predominantly on video based solutions as these provide the most security.
Video Based Customer Identification Process (V-CIP), as the RBI refers to video KYC, is introduced to capitalise on the growth of digital channels. It’s goal is to make it easy for end users to verify themselves. The new legislation aims to encourage online customer onboarding as opposed to requiring users to verify themselves offline.
It’s quite common that diligently performed video KYC procedures are safer than face-to-face identity verifications done at physical branches. This is mostly because video identifications are backed by AI, machine learning, automated document recognition, and of course are recorded and stored on video. This is also backed by presence of trained verification specialists who are there to guide and oversee the whole process.
The video KYC process in India will be connected the already working government issued verification system – Aadhar and users will be able to use their e-PAN numbers and PAN cards. Different methods are available depending on what type of institution is performing the verification. It also poses the requirement of obtain consent for data processing as well capturing live location of the user to ensure they are actually in India.
Most importantly it’s the decrease in how long it takes to onboard a new customer. And as result decreased drop-offs in registration procedures. For you it means your customers will be able to use your services quicker and will be less likely to switch to your competitors. On top of that the security of your system will be increased as video based identity verification solutions are much safer and prevent fraud from happening.