Digital KYC or eKYC (Electronic Know Your Customer) is a way to carry out KYC remotely and through a paperless process. It brings down costs, enhances efficiency, and addresses the challenges that traditional KYC processes pose.
Not only does KYC help verify customer authenticity, but it is also a part of the Anti-Money Laundering effort of the regulatory bodies. It is crucial to verify customers and establish who they claim to be. Not only does it protect financial institutions from crimes such as money laundering, identity theft and fraud, but failing to identify them can lead to punishment and hefty penalties from regulatory authorities.
Background checks in India had a lot of drop-offs and were quite cumbersome because of the traditional verification system. Traditional KYC leads to delayed customer onboarding because it requires the person to be physically present, causing inconvenience to customers and high drop-off rates. Since the data is entered manually, it is prone to errors and can lead to incorrect and insecure customer information processing. When this process becomes digital, the automated tools prominently bring down the touchpoints, enhance the overall experience and reduce the onboarding time.
Background checks in India via Digital KYC are addressing issues of the traditional method:
- Manual Data entry
- High costs
- Time-consuming process
- Customer frustration
- Ever-evolving regulatory environment
- Inconsistency and lack of security
Going digital is the holy grail of customer experience enhancement. Financial institutions need to carry out and build their background checks in India, keeping the customer at the centre. Digital KYC is a massive step towards transforming the customer journey with the bank.
Digital KYC strengthens the efficient management of regulatory compliance and KYC policies from initial customer onboarding through their lifecycle. This includes a seamless onboarding process, document refreshes, and up-to-date and accurate customer information.
Digital KYC transforms the entire customer experience by ensuring high customer satisfaction, which is key to success. Digital KYC is automated, providing customers with a frictionless experience and eliminating the frequent back-and-forth between the customer and financial institution when new information is required.
Since this is an automated process, customers receive a fast and easy identification or accreditation experience, resulting in speedier account opening.
Centralized Data Management ensures that if the customer is already doing business with the financial institution, their information can be re-used and re-purposed. Digital KYC integrates with critical internal systems making this a distinct possibility.
Digital KYC eliminates cumbersome paperwork that caused high drop-out rates of almost 40% across financial institutions. A robust Digital KYC solution makes the process completely digital, removing paperwork and making the end-to-end customer journey contactless.
Digital KYC does not require the customer to visit the branch physically. When they open a new account, the ability to perform identification and verification digitally is imperative in this digitization age. Therefore, offering technologies that enable customers to take pictures and upload their identification documents is essential for streamlining the process.
With a digital portal, customers can upload their information at their own time and convenience in a well-orchestrated manner. That information can be affixed automatically to the onboarding application, accelerating compliance.
AI-powered image detection, OCR, and liveness detection technologies can detect the genuineness of the image taken and authenticate it with the uploaded identification documents. High-quality image processing notifies the customer in real-time if the image is blurry, skewed, or disoriented, so they can make the changes there and then. It is yet another back-and-forth interaction that digital KYC takes care of.
Digital KYC has a broader scope and makes life easy for customers in remote areas. Since the entire process is contactless, the customer reach is much better. If one has a registered mobile number and Aadhar card, they can perform Digital KYC remotely. It is beneficial for customers in rural areas with low accessibility to banks.
To conclude, digital KYC is a facet of client onboarding that has enormous potential for improvement. Digitizing the KYC process can reduce re-work, eliminate operational inefficiencies, and eliminate human interpretation of complex regulations. It creates an enhanced and more streamlined client experience.