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All About Video KYC – Everything You Need To Know About Video-Based KYC Verification

Video KYC verification is a crucial way to authenticate a customer. Customer onboarding services provide this form of video-based verification to establish customers. Before starting a relationship with any financial institution such as banks, NBFCs, insurers, or other financial bodies, a customer’s details need to be collected & verified. This physical or video KYC verification is vital for customer due diligence.

These measures have been put in place to avert financial fraud, money laundering, & using funds to finance terrorist and criminal activities. Video KYC differs from digital KYC and eKYC. This verification protocol uses video-enabled features, face matching proficiencies, audio-visual exchanges & the overall usage of AI technology to accelerate and streamline the customer onboarding services.

What are the different types of Video KYC?

The regulatory bodies in India have approved various types of KYC, and each financial institute can carry them out based on their nature of business. These are:

Features of Video KYC Verification

Video KYC verification is digitized and paper-free 

This process is complete digital & use scanned images and scanned documents for verification. This can be carried out online.

Audio-visual interaction: An essential step in Video KYC verification is an audio-visual interaction which is another layer of identification via a liveliness check & a photo-matching against the customer’s face. A trained official asks random questions.

  • Geo-tagging and facial matching 

Facial matching is needed to verify the identity, and geotagging authenticates the customer’s location.

  • Real-time & automated document substantiation 

Everything happens in real-time using technology. There is no manual document authentication as it uses technology for data extraction and verification in real-time. This makes the process faster and error-free.

Who Can carry out the video KYC verification process?

The RBI’s circular states that banks and NBFCs can use VCIP; however,

only banks can use online Aadhaar authentication; unregulated institutions still rely on offline eKYC.

As per the IRDAI circular on VBIP, all life and general insurers can use VBIP for customer onboarding services.

SEBI has authorised all SEBI-registered intermediaries to use VIPV to establish investor relationships.

Advantages of Video KYC verification? 

Significantly reduced KYC and onboarding expenses.

As per Deloitte, automating KYC can bring down expenses by half (https://www2.deloitte.com/content/dam/Deloitte/us/Documents/financial-services/us-cons-automation-in-on-boarding-and-ongoing-servicing-of-commercial-banking-clients.pdf)

Video KYC mainly has brought down boarding costs by 90% due to the automated and digital nature of the video KYC verification process.

Reduced turnaround times

Traditionally the KYC verification process took anywhere between 10 and 20 days.

With automation, instant verification, and real-time updates, video KYC noticeably reduces the TAT for KYC. This process can now be carried out in ten days.

Improved productivity & fewer errors

Video KYC enhances productivity by eliminating inefficiencies that surround manual workflows and paper-based documents. As per reports, digitizing paperwork can boost efficiency by 20%, and AI-powered verification practices further augment this efficiency by preventing possible authentication errors. (https://www.business.com/articles/7-statistics-that-will-make-you-rethink-your-document-management-strategy/ )

Better customer onboarding success rate due to the seamless process

Around 40% of the clients abandoned the traditional KYC verification process halfway due to the cumbersome and fragmented process.

Video KYC verification makes this process smooth & seamless as it is entirely automated and digital. Customers prefer digital adoption in various spheres of life, and since their demands are met using this process, the KYC drop-off rate went down by 20%. (https://www.cardrates.com/news/market-force-banking-study-predicts-future-changes-for-bank-branches/)

Usage of innovative technology 

Video KYC encourages innovative technologies such as Artificial intelligence and emerging technologies.

Technologies such as AuthBridge digitize the end-to-end customer onboarding process using innovations such as OCR, liveness detection, and geotagging capabilities. It adds scale, speed, and security to the entire customer onboarding process.

Using Video KYC verification for the customer onboarding process can a company save operational costs by 70% and reduce the KYC TAT by up to 90%.

Security and Safety are prioritized 

Cybercrimes, fraud, and money laundering pose enormous threats to Financial Institutions and are what pressed the need for KYC.

Video KYC addresses these problems by integrating stringent security protocols, machine learning filters, and robust data security measures to ensure safety and security.

All these benefits of video KYC verification deem it a game-changer.

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