In 2020 the Ministry of Finance edited the Master Direction on KYC services, enabling banks & regulated entities to collect their customers’ information electronically. This was done to leverage digital channels and catered to the ongoing pandemics that made physical verification impossible. While they have digitized KYC, there are stringent guidelines to execute it. The Reserve Bank of India orders that the institute initiate a video call with the consumer to establish the V-CIP, the video-based customer identification procedure for the KYC process. 

KYC is generally performed when a client is onboarded or a customer opens an account; it is done before confirming the customer to establish their credibility and legitimacy. However, customers need to be verified from time to time, more frequently for high-risk customers. 

According to the Reserve Bank of India guidelines, financial institutions must request a Re-KYC at periodical intervals to ensure their records are up-to-date. This means they need to verify high-risk customers every two years, medium risk customers every eight years and low-risk customers every ten years. This is done to ensure that there has been no change in their address or identities. 

Initially, the scope of V-CIP for Re-KYC was restricted to low-risk customers, and in fact, most of them still relied on the traditional form of KYC updating that required the customers to be physically present. This became incredibly cumbersome after the pandemic and for customers in remote areas. Physically visiting the bank was not an easy task and ended up in incomplete Re-KYCs or termination of services which meant a loss of business for the institutions. However, the Reserve Bank of India 2021 issued a new circular that shifted the onus again on banks to accept V-CIP for intervallic KYC updating for their existing customers.

To ease the process of V CIP, KYC services providers are the best options option to rely on. They adopt technologically superior consent-based methods of demonstrating a customer’s identity. They now only make the task easy for the financial institutions but provide a seamless customer experience through real-time verification, live data collection, gesture-based liveness check, real-time face match and geotagging capabilities. This AI-powered V-CIP is swift, economical, scalable and easily integrable. V-CIP reduces customer identification and authentication to a few minutes instead of weeks. 

VCIP is automated and paperless, thereby cost-efficient and time-efficient. As envisioned by the Reserve Bank of India, V-CIP is a digital process online and requires zero paper. This reduces the turnaround time of onboarding a client resulting in reduced costs and more time efficiency. Documents are verified instantly, and human resources needn’t be deployed to carry out physical verification. AI-powered V-CIP solutions have been proven to bring down operational costs by 70% and reduce the onboarding time to 10% of the original time. Since onboarding is brought down to a few minutes instead of days, banks and NBFCs can onboard customers quickly with minimal effort from the banking officials.

Here are five reasons why one should switch to V-CIP to carry out their re-KYC services

#1 Amazing onboarding experience for the customers

Low-risk customers can carry out their Re-KYC from a remote location and in the comfort of their homes with the help of V-CIP. Compared to the old-school KYC process, V-CIP is less time consuming and very easy, involving a few steps. This ensures a smooth experience for existing customers, which is how it should be. 

#2 Skipping the endless queues to submit Life Certificates

V-CIP will simplify life for government pensioners who need to queue up at bank branches for Life Certificate submissions. They will now have the option to provide this over a video call, making them happy and increasing the institution’s operational efficiency.

#3 Makes banking hassle-free for senior citizens 

Senior citizens constitute a major chunk of low-risk customers. Expecting them to go back and forth at that age is criminal. V-CIP gives them the comfort and convenience to complete their re-KYC updating from the comfort of their homes without stressing about visiting the branch. 

#4 Hands-on fraud prevention 

Traditional KYC is more vulnerable to fraud, as customers use forged or appropriated identities to avail of loans and other financial services. V-CIP empowers the financial institution with complete end-to-end control over the verification process. This eradicates the ill use of pension funds by fraudsters.

#5 For Rural customers, re-KYC becomes a breeze

Rural customers open accounts to claim government subsidies and are a fundamental customer base for banks. However, it is operationally challenging and costly to follow up manually with these clients as they are located in far-off regions. V-CIP enables an effective and low-cost process to reach out to these inactive account holders over a basic video call.  

V-CIP is piloting a new system of re-KYC authentication that is faster, seamless and more secure for customers and financial institutions alike.