They say seeing is believing, and the adage is apt for processes related to onboarding. As in-person verification and appointments are becoming more and more inconvenient, how can an organisation trust a counterparty without actually being able to ‘physically’ see its credentials? In the age of easy photo editing, how can one trust the validity of documents sent as photocopies or soft copies? The answer is by deploying Video Know Your Customer (Video KYC) solutions.
When the COVID-19 pandemic struck in 2020, banks, financial institutions, NBFCs and companies were disrupted from being able to go about their business as usual. Onboarding processes were among the most impacted, as the collection and submission of physical documents of potential customers became almost impossible. Thankfully, the Reserve Bank of India (RBI) had already issued guidelines for Video KYC in early 2020, which helped provide some relief to financial institutions and enabled them to carry on customer onboarding without major disruption.
We now find that Video KYC is increasingly replacing lengthy physical verification processes. As people have become more adept and comfortable in transacting online, the adoption of Video KYC has grown exponentially.
What is Video KYC?
Video KYC is an online method of identity verification in which an organisation can validate the credentials of its counterparties through a video call with its executives. Counterparties have to digitally submit statutory documents as proof during the call which are then validated against various statutory databases via API.
Typically, Video KYCs are conducted by using customized applications that are developed for an organisation’s use, or more commonly, by licensing a Video KYC solution through a Software-as-a-service (SaaS) model. There are also several entities that provide Video KYC as a service for a small fee.
How is Video KYC done?
- Step 1: A counterparty registers on the Video KYC platform.
- Step 2: The counterparty’s representative enters into a video call with a KYC executive
- Step 3: KYC executive interviews counterparty representative; the location can be requested during the call and the location and date/time gets captured in the video recording.
- Step 4: The counterparty’s representative displays statutory documents during the video call that are validated against statutory databases using APIs.
- Step 5: Conduct ‘liveness checks’ to ensure that the counterparty’s representative is the same live person as is mentioned in the statutory identity document being validated. In order to do this, the counterparty’s representative may have to perform several actions on camera.
Optional step: Some banks or corporates conducting the Video KYC, may also request for capturing additional photos of the counterparty’s premises with consent and ask the counterparty’s representative a predetermined set of questions.
- Step 6: Video footage and documents are uploaded and validated.
- Step 7: KYC Verification results are delivered.
Benefits of Video KYC Solutions
According to a study by Vantage Market Research, the global eKYC market is expected to be valued at nearly USD 1.37 billion by 2028, growing from USD 427 million in 2021. A CAGR of 21.5% means that there is a huge potential for Video KYC, which is a part of eKYC. These numbers also reflect the growing interest among companies the world over to adopt Video KYC, which offers the following benefits:
- Video KYC reduces paperwork and helps eliminate the inefficiency resulting from human errors.
- It is cost-effective because it cuts down the cost of physical travel that is required for the traditional KYC process, particularly in remote areas.
- Moreover, it saves a significant amount of time, as Video KYC can be done anytime and anywhere without a need for physical, in-person availability. All that the counterparty representative needs is a mobile device with a decent camera and Internet connectivity.
- Video KYC also minimises the risk of identity fraud and submission of fake documents by using tools such as liveness checks and API-based validation of documents with statutory databases.
- All the information related to the counterparty can be stored securely using an online secure digital system.
- Video KYC helps protect against various identity frauds such as spoof attacks, synthetic identities, and deep fakes.
- As the entire Video KYC process is digital, it is extremely efficient for all the parties involved. It eradicates the paperwork and helps smoothen the onboarding process.
- Video KYC also enhances the counterparty’s onboarding experience. This ensures their cooperation and lays the foundation for a strong business relationship.
- As new-age businesses are highly tech-savvy, Video KYC can be a crucial differentiator in the marketplace while onboarding counterparties. Physical KYC may deter new-age customers because of their inconvenience.
Pioneering radical thinker and designer, R. Buckminster Fuller said, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
This applies to KYC as well. As KYC norms have become critical for compliance, we have to find newer ways through technology to improve the KYC process and experience and make it more efficient and cost-effective. Tech-based Video KYC systems with additional layers of security can help in dealing with sensitive data and information related to counterparties.
At Rubix we believe, Video KYC is here to do just that. It is a secure and efficient method of identity validation with minimal physical interaction. It helps corporates massively reduce their onboarding cost while ensuring that they are fully compliant with laws related to processing of identity data.
How can Rubix’s Video KYC Solution Help Your Company?
Rubix has domain expertise in digitizing all stages of the credit lifecycle:
Onboarding -> Risk Assessment -> Risk Monitoring -> B2B Debt Collection
Our Video KYC Solution for digital onboarding of counterparties strikes a fine balance between ease of use and the highest levels of security and compliance. We digitally verify your counterparty’s identity documents against various statutory databases (For eg., PAN, GST, Aadhar etc) and conduct liveness checks to ensure that your counterparty’s identity is comprehensively validated.
Our Video KYC solution has global coverage, enabling you to onboard a counterparty from any part of the world. It does this in a cost-effective manner and enhances your counterparty’s onboarding experience.
To know more about Rubix Video KYC and how we can help you onboard counterparties seamlessly, please reach out to us at email@example.com or +91 22 4974 4274.