Commonly, three problems persist in the Video KYC verification procedure. These are:
- The wrong Country or Geo-location selected
- Different Document for ID is uploaded
- Unmatched details are filled in where real ID Documents have different data.
Digitization of the KYC (Know Your Customer) has its own benefits and drawbacks. Recently, banks in established countries are fully focused to introduce seamless and paperless KYC. For this purpose, they have introduced the Bank Video KYC. We shall discuss the trending technology of conducting KYC through Video Calls. We will be discussing the importance of Video KYC account opening and how banks are benefitting from it. Also, we will link the process to the KYC procedure that how it has facilitated the regulators for AML activities.
What is Video KYC?
It is a seamless process in which the customer’s identity verification is done through smartphones via online video calls. It is one of the types of KYC that are most trending. Mostly, a KYC agent facilitates the customer to conduct Video KYC. Financial Institutions and banks use it for facilitating customers and speeding up the KYC process before their services are rendered. Likewise, Bank Video KYC facilitates banks in remote customer onboarding without the requirement of a customer’s physical presence.
Video KYC Process Explained
Initially, the customer needs to connect to the company via video call. Then, a company after having the initial CIP (Customer Identification Program) online, will assign an agent to the customer. A detailed chart of the Video KYC process is given below:
Furthermore, the following points explain the process of video call-based KYC is as follows:
- An agent of the bank’s representative initiates a video call to the customer.
- Once the customer gives his consent, a video call is carried out.
- Meanwhile, the customer also submits the initial documentation online by filling out a form.
- This form has the Basic details required by banks from the customer. These include Name, Date of Birth, and Address.
- The agent then asks the customer to display the verification documentation in the video call. Also, the customer needs to be present in the video call in front of the camera.
- The customer must not be wearing any mask and his face must be completely visible in the video call.
- The AI-based KYC tools then record the face of the customer through liveness detection and facial recognition. Also, the location is confirmed via geo-tagging.
- Likewise, other data is recorded via video call through the camera. Also, the customer needs to display the documents.
- Agents verify the customer information through a validation process. They carry out the questioning with the customer to cross-verify and match the customer’s information.
- Once the customer’s onboarding is complete, a backup of the customer’s KYC profile is created in a centralized database. Mostly, this database is stored in an emerging technology called Blockchain.
- Finally, the agent formally ends the video call and welcomes the customer for services.
Video KYC Bank Account Opening
Almost, every country is concerned about making the KYC process seamless. Notably, India has made some strong moves in introducing Video KYC. The Reserve Bank of India approved KYC through Video Call for opening a bank account in May 2021. Similarly, all financial institutions now realize the importance of KYC through Video calls. It improves the security and compliance measures for the customers. Furthermore, its benefits include cost-efficiency and a time-saving approach as compared to the traditional KYC process.
Moreover, Banks and regulatory bodies are highly benefitting from Video KYC. Especially, when it comes to the implementation of AML regulations, it is easy to identify fraudsters and Money Launderers. While the customers only require to conduct their KYC through video calls, so there are chances of a security breach. But regulators are fully aware of the threats in this case. Hence, Ongoing monitoring is required to keep the system safe and the database updated.
Overall, Video KYC is one of the emerging technologies that is growing rapidly. Banks, Financial Institutions, and other entities are increasingly embracing it. Now, Smartphone Applications are introducing KYC through Video Calls for remotely verifying the customer’s identity and expanding their services. Particularly, Video-based KYC has become popular due to being convenient. Lastly, many loopholes in the traditional KYC system have now been removed. Now, banks are able to recognize a customer and have clear procedures for KYC and AML compliance.