The 21st century has seen an upgrade in KYC (Know-Your-Customer) verification standards. Earlier, KYC verification was meant to be a lengthy process, with ample documents, physical presence, and tons of questions. But today, digitization is taking over, and the ideology of remote KYC solutions has been initiated.
The banking sector and the financial institutions leveraged the idea of implementing remote KYC functions to speed up customer acquisition efforts. But, alongside initiating the remote facilities, it was the responsibility of respective sectors to ensure they did not fuel the financial crimes.
IDt theft, financial crimes, and frauds need to be minimized while supporting the need for industries to adopt digital change. Therefore, a very sophisticatedly planned video KYC verification concept was introduced. We bet you might have encountered a bank or financial institution, at least once, who requested a video KYC for you to proceed with availing of their services.
Even if you haven’t tried video KYC as a customer, you must still have heard about the concept. If you are a bank or an NBFC, then it is time you integrate the video KYC verification solutions into your portal, enabling your customers a delight to join or avail of your services.
But, if you want better clarity on this concept before utilizing it, then this article will help you with an insight into what is video KYC and how it works.
Understanding Video KYC Verification
Video KYC is a type of identification that will be conducted face-to-face or online by assigning an agent. Unlike in earlier times, where the customer needed to walk into the physical bank or office to submit documents, this eKYC will be done through a secure video KYC channel.
All of the documentation that is needed in a physical KYC will also be asked for in the video verification, but digitally! In this way, the process becomes easier and faster. Customers must produce their documents in front of the camera as specified to verify the person’s credentials.
For instance, the customers will be asked to turn on their back cameras and show their Aadhaar or PAN card so that the eKYC agent can capture a picture of it to create digital copies. The software used for integrating video KYC services to your financial service applications is specially designed to control all of the steps of the verification.
It means that the KYC agents can turn on the back camera remotely for respective document scans. Following that, some of the other KYC policy-centric features are also included in the portal to ensure that all of the details of customers are verified with the highest possible authenticity.
Difference Between Usual and Video KYC Verification
KYC has been a very long-standing process that is being used across various industries, especially within the banking sector. The purpose of it is to ensure that the businesses work only with legitimate customers who adhere to all regulatory requirements, which vary from one organization to the other.
The usual KYC involves the manual or in-person validation of the customer. It means if the customer intends to open an account with a new bank, he/she needs to visit the respective branch of that bank, collect a form, fill it up, and submit it with all asked identity proof documentation. All of these documents will be verified by the real person. It is a lengthy process and might take weeks to complete.
Hence, this led the customers to cancel their plan to open an account at the last moment. To overcome the problems and to offer a great experience to the customers, a video KYC verification process was initiated. The process of verifying the details remains the same but is executed remotely, without asking the customers to mandatorily visit the branch.
Moreover, video KYC is also pretty secure due to the implementation of technology, which prevents any document from being tampered with or falsely implemented. It is more cost-efficient and quicker in comparison to the usual KYC verification.
What Threats Can Video KYC Verification Overcome Upon Implementation?
Now that you have understood what is video KYC and how it can help your business offer a great customer experience, you must also know how it repels threats such as identity fraud and other cyber crimes. The threats that video KYC verification overcomes are:
1. Spoofing Attempts
There are imposters who will try to bypass KYC verification using advanced technology or AI to make stolen or fake ID documents. The criminals try to get through the facial recognition systems by showcasing a digitally constructed face, which they create by using 3D models of photographs.
Facial spoofing was earlier a difficult threat to detect, but with modern-day technology solutions, video KYC is now safe from such spoofing attacks. Video KYC combines AI and human intelligence to detect spoofing attacks instantly in real-time.
2. Synthetic Identity Manipulation
Cybercriminals use fake ID numbers and embed them on their physical identity cards to falsify data. They do it to fake the entire KYC and onboarding process. These types of threats are difficult to detect through manual KYC attempts. Hence, a high-end and secured video KYC portal is of utmost necessity to detect and mitigate such threats.
In video KYC, the original documents will be verified on priority. For instance, the PAN cards in India have a hologram with the National Emblem. The eKYC agent will ask the customer to show the original PAN card in light to see if the hologram is real or a copy! In this way, they verify if the credentials, the person, and the ID match and promote legitimacy.
3. Deep Fake Videos
Deep learning technology is one of the most advanced yet negatively beneficial technologies. People who intend to cause financial crimes use the technology to make deep fake videos to bypass the KYC and other security steps. In the case of video KYC, such criminals believe they can use deep fake videos to fool the facial verification step.
But, as stated earlier, with the implementation of AI, ML, and other advanced technologies, it is not possible for any deep fake videos to pass through. The deep fakes will also be flagged in real-time and will fail the KYC verification right away.
Regulatory Guidelines Associated with the Video KYC Verification
FidyPay understands the necessity of banks and NBFCs to evolve with the technology trends and keep up with the security aspects. In that pursuit, we have been dedicated to ensuring our eKYC portal is integrated with features to help you meet all the regulatory requirements while verifying a customer’s credentials.
Some of the regulatory guidelines associated with Video KYC verification are:
1. Capturing the live photo of the customer
2. Ensure Aadhar’s XML File isn’t much older (Preferably, it should be downloaded within the 3-days window)
3. PAN Card validation from the database
4. Geo-Tagging features enabled for determining that the customer lives in India
5. The photograph of the customer should be matched with the one in the ID(s)
6. Match & validate the ID details with the information provided in the form
7. Promote concurrent audits
8. Proper liveness and identification of the customer for clarifying all doubts
9. Video interview needs to be saved with accurate time & date stamp
10. Implementation of Face Recognition and AI technology
11. Redact the Aadhar Number and validate its authenticity as per Sec 16
KYC is an integral procedure for enabling customers to onboard for financial or banking services. The NBFCs, banks, mutual fund platforms, and other such financial institutions need to follow this rule per the purview of IRDA, SEBI, or RBI.
What Steps Would the Customers Need to Follow In Order to Initiate Video KYC?
There is a stepwise process planned out for enabling video KYC for the customers to give them a great experience and help them quickly avail the banking or financial services. The steps for the same are as follows:
1. Visit the Website and Apply for the Banking Services
Whether a customer applies for opening a bank account or a loan, he/she needs to fill out a form on the official website or application of the bank or financial institution. The customers will then need to fill out the given form with asked details such as name, address, number, Aadhar number, PAN number, and others. Once the form is filled, they will then be redirected to the next step of the process.
2. Schedule the Video KYC Verification Call
The customers will then be prompted to schedule a video call at their desired date and time. You can also integrate the KYC portal for an instant verification call or provide scheduling options for the customer to be available at his/her selected time. If you avail of the scheduling option for your customers and banking services, an automated link will be sent to the customers to access the video KYC verification call on the mentioned date.
3. Get on a Video Call with the eKYC Agent
Upon accessing the link or initiating the video KYC verification call, the customers will then be connected with an official. The eKYC agent will be responsible for asking questions and validating all the information per their standard SOP.
4. Original Seen & Verified (OSV) Verification Initiated
The agents will then initiate the OSV validation checks of all the original documents and then create a digital copy of the same for record keeping.
5. Other Verifications
Following that, the liveliness check of the video and to verify the originality of the person sitting for the interview will be done. Real-time images will be captured with random body movement requests.
The address will also be verified by the customer with Google Maps and geo-tagging. Face match verification will be initiated to verify the image collected in real time with the one in the documents.
6. Passing or Failing the Video KYC
Upon validation of the video KYC details, the agent will conclude, based on the system’s responses and self-judgment based on company SOPs, to either pass or fail the verification process. The auditor will then review the details and process the banking application. The customers will get the notification within a short time to determine if the KYC is a success or failure.
Perks of Upgrading Your KYC Solutions to Video Format
All customers will look for the utmost convenience in banking, as the world is now becoming digital. Therefore, the financial sector will lead the business to adapt to the digital landscape. Some of the benefits that your business would experience upon availing FidyPay’s eKYC services are:
1. Remote Onboarding of Customers
The customers will be remotely boarded by speeding up the KYC verification process with face verification and OVD collections.
2. Faster Completion of the Process
Your customers can start availing of your financial services in no more than 3 minutes after completing the video KYC verification.
3. Reduced Drop Off Rate
There will be a 20% reduction in the overall dropout rate, with the initiation of frequent follow-ups, with the use of outbound tools or dialers.
4. Better Customer Experience
With video KYC, your business will be able to provide customer engagement throughout the process. Thus, the ease of availing of the services will encourage more and more people to join your banking or financial service business.
FidyPay Brings to You Standout eKYC Solutions for Your Business Productivity!
FidyPay is walking down the road to bring revolutionary changes to the BFSI sector with digital technology inclusions. In the quest, we bring you end-to-end opportunities to avail complete digitization for onboarding and managing customers, payments, and other such aspects.
Our eKYC solutions offer video verification features to help you win over more customers and give you a good scope of doing more business. Some of the videos KYC features that FidyPay offers for your convenient business solution are:
1. Low bandwidth connectivity
2. Omnichannel engagement
3. Security & Compliance
4. Ease of use
6. APIs & SDKs for integration
7. High-quality video call
8. Document verification
9. Track application status
10. Face verification
Get in touch with our team of digital payments experts to learn more about our eKYC solutions.
So, this is everything you should know about video KYC verification and its benefits for your banking business. It has been a revolutionary technology in terms of offering high-scale financial or banking services to customers within minutes of them applying for the same. The hassle-free and paperless verification is the future of the banking sector. Come get in touch with us and let’s discuss integrating your banking applications with our excellent KYC portal.