You might have heard about frequent bank and financial frauds that may be conducted due to user identity theft, duplicate PAN, or any other reason. However, numerous financial organisations, especially mutual fund institutions, often encounter frauds such as counterfeit ID cards, multiple account numbers, and other identity frauds. This is why they need to implement KYC regulations to keep their customers’ sensitive information secure and sustain market repute.
This is where in-person verification KYC comes into action, one of the types of KYC used to verify a user’s identity before onboarding. Several financial firms such as banks and insurance companies implement this type of KYC to prevent any kind of economic crime in the future.
Let’s explore what in-person verification KYC is, how it works, and how it differs from other types of KYC verification processes.
What is In-Person KYC?
In-person verification KYC, also known as IPV KYC, is the type of Know Your Customer compliance regulation in which an individual or an entity gets verified physically by a financial institution agent. This process involves physical verification of the customer's identity, which usually occurs face-to-face, through biometrics, video verification, or submission of documents in-person.
Centrally, the IPV KYC online process involves gathering and maintaining records of all the required and sensitive information of the client. In order to gather the data, the customer needs to fill out the KYC form. Moreover, this information not only includes user personal details but users’ companies in which they work, their designation, and signatures.
The in-person verification KYC process was typically done by the employee or customer by visiting the company or bank. Yet, with the technological evolution and users’ busy schedules, the trend has shifted to video KYC, which is done through video interaction. Not only this, there are multiple ways through which the IPV process is done to verify customer identity.
How is In-Person Verification KYC Conducted?
In order to carry out in-person KYC verification procedures, the investor or the customer needs to submit a copy of their identity card and residential proof digitally. However, before submitting these documents electronically, they are required to visit the company physically. Or in case the person is unable to visit, any agent or administrator visits the individual’s home.
Still, if physical interaction is not possible due to the unavailability of both entities, a video meeting is conducted to carry out the live authentication of the person. The user must have a fast and reliable internet connection. In the video IPV KYC, the administrator asks several questions regarding the documents. Unfortunately, if the agent finds any mismatched information regarding the documents, they have the right to reject your application.
The documents required for the in-person verification KYC process are:
- Government-issued ID card
- Driving Licence
- Registered Lease or Sale Agreement of Residence/Flat
- Maintenance bill
- Life Insurance Policy
- Landline bill
- Utility bills (not older than three months)
- Bank Account statement (not older than three months)
- PAN card
The in-person KYC process usually involves the following steps:
i. Appointment Scheduling
First of all, when the customer applied for any financial services, for instance, account opening, they need to schedule an appointment for the IPV KYC procedure. This appointment can be either physical i.e. by visiting the office, or online, in case of user unavailability.
ii. Meeting Arrangement
Once the client has scheduled an appointment, the financial firm arranges a meeting between the user and the bank agent, who works as a company representative. In the meeting, the agent gathers user information and passes it further.
iii. Document Verification
Other than collecting user personal information, the individual needs to provide several documents that are mentioned above. These documents are required as proof of evidence. After collecting the documents, the agent verifies the user's identity by comparing their appearance to the photo on the passport and the ID card. Moreover, the representative also authenticates this information with the information provided by the customer during the interview.
iv. Maintaining Records
After collecting all the required documents and other information, the financial agent would record this data to run the IPV KYC process. Additionally, a copy of each document would be stored in the company records.
v. Ongoing Monitoring
Even after the in-person verification KYC process is done successfully, the firm may follow up with the client to verify further information. The ongoing monitoring is required to authenticate if the user made any changes to their documentation or if any additional documents are required in the future.
How Does In-Person KYC Differ from eKYC?
eKYC is another type of KYC, in which the user's identity is wholly verified digitally. usually, financial companies, that implement eKYC, hold their own applications to conduct eKYC via biometric-based or OTP-based authentication. However, on the other hand, in-person verification KYC involves physical interaction to gather user information and several documents to verify user identity before onboarding.
One of the major differences between eKYC and IPV KYC is the level of accessibility and convenience. eKYC is more convenient for people who live far away from financial offices or have busy schedules since it can be done anywhere through an internet connection and is more convenient.
Nonetheless, in-person KYC offers a higher level of precision and security. As a customer's ID card and other documents are verified physically by an experienced bank representative, there are lesser chances of online fraud or errors.
In-person verification KYC is the verification of the information provided by the consumer. This procedure is crucial for mutual fund clients before onboarding them. This type of KYC verification requires the user to interact with the company representative in person and submit their documents and other information to get verified.
However, in case of user unavailability, the firm agent schedules an online appointment where user identity is verified. The purpose of IPV KYC online is to prevent banks and its customers from any sort of financial crimes such as duplicate PAN or identity theft. Once the KYC verification process is done, the customer gets hired successfully.