Video KYC for Customer Onboarding

The world of banking and fintech is rapidly evolving, and with it comes the need for faster, more secure, and more efficient digital onboarding processes. Customers today demand seamless experiences, and traditional methods of onboarding that involve tedious paperwork and in-person verifications no longer meet their expectations. To meet these demands, the banking and fintech industries are turning to innovative solutions like VKYC (Video-based Know Your Customer) to revolutionize their digital onboarding processes. This Digital onboarding and KYC report from Keesing Technologies highlights the importance.

What is the process of Video KYC?

The VKYC (Video-based Know Your Customer) process involves verifying the identity of individuals remotely through a video call. Here's a step-by-step breakdown of the VKYC process:

Document Submission:

The VKYC process typically starts with customers providing their identification documents digitally. This may include documents like passports, driver's licenses, national IDs, or other government-issued identification cards. Customers are usually prompted to upload images or scans of these documents through a secure online platform.

Video Call Verification:

After submitting the identification documents, customers are connected to a trained agent or representative via a secure video call. This video call serves as the verification channel for the VKYC process. The agent will conduct the necessary checks and interactions to verify the customer's identity.

Document Authentication:

During the video call, the agent will carefully scrutinize the uploaded identification documents for authenticity. They will check for watermarks, holograms, security features, and other elements that indicate the validity of the documents.

Face-Matching Process:

To ensure that the individual undergoing the VKYC process matches the person on the submitted identification documents, the agent will perform a face-matching process. This involves comparing the facial features of the person on the video call with the image on the identification document. Advanced facial recognition algorithms are often used to carry out this comparison.

Liveness Detection:

To prevent fraud attempts using static images or pre-recorded videos, VKYC solutions employ liveness detection technology. Liveness detection ensures that the person being verified is physically present during the video call. It may involve prompting the person to perform certain actions or gestures to prove their live presence.

Compliance Check:

Throughout the VKYC process, the agent will ensure compliance with regulatory requirements, such as Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. The verification process is designed to meet the specific regulatory standards of the industry and region in which the VKYC is being used.

Completion and Decision:

Once the VKYC process is successfully completed, the agent will make a decision based on the verification results. If the individual's identity is confirmed, they will be allowed to proceed with the desired onboarding or access to financial services. If there are any issues or discrepancies, appropriate actions, such as additional verification or documentation, may be required.

Implementing VKYC for Banks and Fintech

To successfully implement VKYC for banks and fintech, the following steps should be considered:

Choosing the Right VKYC Provider is important. Select a reputable VKYC solution provider that meets the specific requirements of your institution. Ensure they offer robust security measures, compliance with regulations, and seamless integration capabilities. The interface should be intuitive. An easy-to-navigate interface will result in higher completion rates.

The other most important part is to ensure the VKYC solution can be seamlessly integrated into your existing digital onboarding infrastructure, including mobile apps and websites. Along with that, train your staff and customer support teams to efficiently handle VKYC calls and provide any necessary assistance to customers during the process.

Finally communicate the advantages. Educate your customers about the benefits of VKYC, such as faster onboarding, enhanced security, and a better user experience.

The Future of VKYC in FinTech

VKYC presents a promising future for banks and fintech enabling them to overcome traditional onboarding challenges while providing a secure and seamless experience for customers. Although implementation challenges exist, the latest insights and statistics indicate growing acceptance and adoption of VKYC solutions. A few factors to consider;

Market Growth: The global VKYC market is expected to witness significant growth in the coming years. With advancements in AI and facial recognition technologies, VKYC solutions will become more accurate, efficient, and accessible, driving increased adoption in the financial industry.

Enhanced Customer Experience: VKYC's ability to provide real-time verification and instant access to financial services will continue to enhance the customer experience. As customers increasingly seek convenience and speed, VKYC will be a differentiating factor for banks and fintech.

Integration with Biometrics: VKYC solutions are likely to integrate with biometric technologies, such as fingerprint and iris scanning, to further strengthen security and streamline the verification process. Biometric integration will add an additional layer of protection against fraudulent attempts.

Global Expansion: As VKYC solutions become more versatile and adaptable to various regulatory frameworks, banks and fintech will expand their offerings to cater to a global customer base. This expansion will enable them to onboard customers from different regions seamlessly.

Collaboration and Partnerships: Collaboration between banks, fintech, and technology providers will be vital to drive innovation and optimize VKYC solutions. Partnerships can facilitate the sharing of best practices and foster the development of more comprehensive and effective VKYC systems.

Latest Insights and Statistics

• While precise statistics may vary based on region and market conditions, recent surveys and studies show a growing trend in VKYC adoption:
• A study by Deloitte reveals that over 90% of banks consider digital onboarding, including VKYC, as their top priority for enhancing customer experiences and streamlining operations.
• According to a MarketsandMarkets report, the global VKYC market is projected to grow at a compound annual growth rate (CAGR) of over 15% between 2021 and 2026.
• Research by McKinsey highlights that VKYC can reduce onboarding time by up to 80% and decrease operational costs by nearly 90% compared to traditional methods.

Conclusion

As the banking and fintech industries continue to undergo digital transformation, the adoption of VKYC solutions becomes a strategic imperative. Revolutionizing digital onboarding with VKYC empowers banks and fintech companies to meet customer expectations, maintain regulatory compliance, and gain a competitive edge in the market. By embracing this innovative technology, financial institutions can build trust, strengthen customer relationships, and drive sustainable growth in the ever-evolving digital landscape.

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