As per the recent reports of Business Standard, the RBI (Reserve Bank of India) is soon going to draw up a new law or regulation for Non-Banking Financial Companies (NBFCs)....
All the financial institutes can take a sigh of relief as RBI shall soon introduce technology-driven customer verification through video KYC. Previously, when Reserve Bank of India made it mandatory to conduct KYC of customers, several companies showed their resentment and protested the process as it requires a huge sum of money and staff. However, RBI has now considered the plea of financial institutes and proposes to conduct electronic verification.
RBI has recently announced that the companies can verify customer’s information over a live video. The digital authentication will certainly help the companies to save costs and enables them to provide a customer-friendly experience.
A peek into the functioning of video KYC
RBI initiates a simple KYC approach wherein; the companies have to keep a timestamp of the video, while the customer needs to show his/her documents over the video and enable location for the purpose of Geo tagging. As per the reports, the companies can deploy Google’s video chat (Duo) to channelize the video-based KYC, but nothing has been finalized until now.
Once the video KYC comes on board, it shall require the customers to have a DigiLocker account for the video. RBI urges to start with XML-based Aadhaar authentication rather than offline QR-code based verification. Moreover, RBI emphasizes on live videos and denies the use of recorded videos for an authentication.
What challenges can the video-based KYC propel?
KYC over the video might seem to be a cost-effective process as compared to the paper-based customer verification. However, customers from rural areas may find it difficult to commence this technology-driven authentication. Thus, it is the government’s responsibility to make the KYC video procedure as easy as possible.
The government shall issue few guidelines to use the method of video-based KYC that will guide the customer about the new KYC process. RBI shall mandate to open a DigiLocker account  and link it to the government’s video service or Google Duo.
Things to keep in mind while using video kyc
The concept of KYC video is yet to gain importance. Therefore, many people are clueless about its usage. Some primary factors to be considered during using KYC video is to turn on your location services and ensure that your picture & documents are clear in the video. KYC video and DigiLocker linking are the crucial steps towards e-verification. If it gets successfully executed, then the government will surely implement it on other services as well.