With the nation still under a variety of restrictions in movement, Indian lenders have started to offer customers the option of concluding their banking transactions via a ‘video-KYC’ or video know-your-customer process. Earlier this year, the Reserve Bank of India allowed banks to use a video-KYC process to bring customers on-board.
In the last two weeks, several lenders like Kotak Mahindra Bank, RBL Bank, IndusInd Bank and IDFC-First Bank have launched video-KYC facility to sign up new customers. What is video KYC and how does it work?
What is video-KYC?
Video-KYC is an option to a full in-person KYC process that banking customers are required to complete before they avail of services such as account openings and loans. Digital KYC was permitted even earlier. However, at that time, customers were still eventually required to provide documents in physical form to continue with uninterrupted services.
The newly permitted video-KYC promises to replace the old KYC system completely, with customers no longer required to follow it up with physical verification of documents.
What are the steps in the video-KYC process?
Let’s say a customer applies for a loan or account directly through a banks’ website. Here is how they need to proceed.
- Fill up basic details on the online form.
- Provide the bank consent to fetch Aadhaar details and enter the PAN number or conduct an e-PAN verification.
- Officially Valid Documents like PAN, driving license, address/residence proof and bank statements can be uploaded on the website through PDF files or through images off their phone camera. Documents stored on the Ministry of Electronics and Information Technology’s DigiLocker facility can be shared as well.
- Provide the bank access to the mobile-phone’s location which is geo-tagged
- Once these steps are completed and the application submitted, the bank will send an SMS to the customer with a link to a bank-hosted webpage. However, some banks automatically redirect the customer from the application webpage to the video call.
- A bank officer or employee will then start a conversation with the customer to verify their details based on the documents uploaded. They will ask the customer various randomized questions as per the banks’ internal policy.
- They will check the photograph of the customer on the documents uploaded with a live photograph captured during the video exercise. Banks are also using facial recognition technology to verify the customer on video with the photograph on the documents.
- The software also will grab details from the documents that the agent may ask the customer to physically display over the video call.
- Once all the questions are answered, the agent will make a recommendation approving or disapproving the application.
Only the bank can conduct the video-KYC process, so if a customer applies for a loan on a third-party website they will have to apply for the loan and upload documents on the platform. But only the bank and its official will conduct the video call session. There are several video-KYC software providers that banks work with like Signzy, inVOID, IDfy, GIEOM, Infrasoft Technologies and Syntizen.
What precautions should customers take?
At the outset customers should ensure that if they receive an SMS with a link to the video part of the KYC process, they should be directed to a website that is hosted on the banks’ domain name. The RBI has not allowed the use of third-party applications like Apples’ Facetime or Facebooks’ Whatsapp for video-KYC.
The RBI has said that the Aadhaar number should be redacted when sent to the agent, so at no point should the customer display their Aadhaar card and its number to the bank agent during the video call. Since some banks send an SMS with a link to the video this can also lead to frauds.
To secure themselves, one check customers could do is to ask the agent to show their Identity card before beginning the process and note down their name and employee ID.