Know Your Customer (KYC) verification is the backbone of financial security and regulatory compliance in India’s fast-growing digital economy. With digital transactions surging, financial institutions, fintech companies, and regulatory bodies are constantly refining KYC processes to strike the right balance between security, user experience, and compliance.

However, recent disruptions in Online KYC (OKYC) services have posed challenges for businesses relying on seamless digital onboarding. Addressing this issue, we are excited to introduce Digitap’s OKYC + Digilocker Combo Solution, designed to ensure high success rates, uninterrupted user experience, and regulatory compliance. Before diving into the solution, let’s explore the current KYC landscape, emerging challenges, and why this innovation is crucial.

The Evolving KYC Landscape in India

The Rise of Digital KYC in India

India has been witnessing a rapid shift towards digital banking and financial services. With the Reserve Bank of India (RBI) and other regulatory bodies pushing for digital-first solutions, KYC practices have evolved significantly.

• Adoption of Aadhaar-Based eKYC: Aadhaar authentication has become a cornerstone of digital verification, with over 1.3 billion Aadhaar holders and 100 billion Aadhaar authentications conducted since its inception.
• Digilocker Usage Boom: Over 165 million registered users on Digilocker, with over 6 billion document issuances, indicate a growing reliance on digital document storage and retrieval.
• Fintech Expansion: India’s fintech sector, valued at $50 billion in 2021, is projected to grow to $150 billion by 2025, further emphasizing the need for robust digital KYC infrastructure.

Challenges in Existing KYC Systems

Despite the advancements, businesses face several challenges with the existing KYC systems:

• Intermittent OKYC Failures: Fluctuations in Aadhaar-based OKYC services at the source level lead to disruptions in user verification.
• User Drop-offs: Studies show that 20-30% of users abandon onboarding due to slow or failed KYC verification.
• Security & Fraud Concerns: A 271% rise in identity fraud cases in India over the last five years has pushed businesses to seek more secure verification methods.

To tackle these challenges, financial service providers need a fail-proof KYC solution that offers both reliability and compliance while maintaining an excellent user experience.

OKYC + Digilocker Combo Solution: The Future of Seamless KYC

1. What is the OKYC + Digilocker Combo Solution?

Digitap’s OKYC + Digilocker SDK Combo Solution is designed to ensure uninterrupted, high-success KYC verification by integrating two powerful digital identity authentication systems:

• OKYC (Online KYC): Fast, Aadhaar-based electronic KYC verification.
• Digilocker: A government-backed digital document storage and retrieval system that allows users to fetch and share verified identity documents securely.

2. How Does It Work?

The solution introduces an intelligent switching mechanism that detects OKYC source instability and seamlessly redirects the verification process to Digilocker, ensuring a higher success rate and uninterrupted user onboarding.

✅ Automatic Fallback to Digilocker: When OKYC experiences downtime or intermittent failures, the system automatically switches to Digilocker, allowing users to fetch KYC documents from their digital vault.

✅ Higher KYC Success Rates: Reduces drop-offs and improves verification completion rates.

✅ Regulatory Compliance: Fully aligned with RBI, UIDAI, and SEBI’s KYC norms, ensuring seamless operations without compliance risks.

✅ Enhanced User Experience: Faster onboarding with reduced friction, enabling businesses to improve conversion rates.

Why This Innovation Matters

1. Ensuring Business Continuity

With OKYC experiencing occasional source-level instability, businesses relying solely on Aadhaar-based verification face disruptions. The OKYC + Digilocker Combo ensures 99% uptime, providing businesses with a more stable KYC infrastructure.

2. Reducing Drop-off Rates

A seamless onboarding experience is crucial, as every 1% increase in verification success rate can lead to millions in additional revenue for fintech and BFSI players. By minimizing verification failures, businesses can reduce user drop-offs by up to 40%.

3. Enhancing Security and Fraud Prevention

With financial fraud on the rise, this solution leverages secure government-backed systems to ensure document authenticity and prevent identity fraud. Digilocker documents are digitally signed and tamper-proof, making them more secure than physical documents.

4. Expanding Financial Inclusion

India has over 600 million underbanked individuals, many of whom struggle with traditional KYC methods. By offering an alternative verification route via Digilocker, businesses can enable access to financial services for a larger population.

Industries That Can Benefit

The OKYC + Digilocker Combo Solution is particularly beneficial for:

🏦 Banks & NBFCs – Ensuring seamless account opening & loan processing.
📱 Fintechs & Digital Wallets – Enabling smooth digital onboarding for UPI & wallet users.
🚗 Insurance Providers – Verifying policyholders’ details without manual intervention.
💰 Mutual Funds & Investment Platforms – Simplifying investor verification while ensuring compliance.
🛍️ E-commerce & BNPL Platforms – Accelerating KYC for faster credit approvals.

The Future of Digital KYC is Here

As the Indian financial ecosystem continues its digital transformation, businesses need robust, secure, and scalable KYC solutions. The OKYC + Digilocker Combo Solution offers an industry-first approach to tackle OKYC failures while maintaining a seamless user experience and regulatory compliance.

🔹 Higher success rates
🔹 Seamless switching mechanism
🔹 Reduced onboarding drop-offs
🔹 Tamper-proof digital documents
🔹 Regulatory compliance guaranteed

📌 Explore the OKYC + Digilocker Combo Solution today. Schedule a Demo.