In the 2 decades since the introduction of Know Your Customer (KYC) norms in India, financial institutions have made incredible advancements in the realm of digital identity verification. A key player in preventing identity fraud in banking has been Video KYC.
Today, nearly 90% of Indians have access to a bank account. The push for digital from both extenuating circumstances like the pandemic and government initiatives like demonetisation have led to the creation of about 2.5 billion bank accounts in the country.
Financial institutions meet the demands of these users on the daily and manage compliance at the same time, which is no easy task. Keeping an eye on fraudsters in this scenario can get even more difficult if a bank has no technological barriers against them. Here’s where Video KYC comes in.
In this article, we’ll go through the entire step-by-step process of Video KYC onboarding, its benefits, and what might be the future for VKYC.
Video KYC (VKYC) is a digital identity verification process where a customer’s identity is authenticated via a live interaction with a KYC executive or an AI-powered system. It eliminates physical document submission, reduces fraud, and accelerates customer onboarding.
The number of fraudsters using deepfakes has shot up immensely over the past few years. Last year. Shaktikanta Das, the then Governor of RBI, had to rush to warn investors about the fabricated videos of him claiming to support certain schemes. Needless to say - that was far from the truth.
Now imagine if a criminal could create a fake identity and get a bank account, all because of the prevalence of deepfake generators and the ability to upload recorded videos.
The process begins when a customer applies for a bank account, loan, or financial service through either the bank’s website, mobile app, or their partner platforms such as fintech apps and NBFCs.
In this part of the customer onboarding process, they will be asked to submit their:
Here, the customer connects with a KYC agent or an AI-based bot through the app via a secured video call. The process includes:
The RBI Master Guidelines for KYC mandates that the system captures not only the GPS location of the customer, but the Timestamp of the video session, and the IP address, all for fraud prevention purposes.
Post the submissions by the user and the data capturing by the app, the cross-verification of customer details starts, with information sourced from the:
In December 2024, the CERSAI mandate called for all banks to adopt technological infrastructure to support the latest updates in KYC norms. The RBI Annual Report for 2024 - 2025, which was released on 29th May 2025, also highlights the importance of KYC in India.
The AI-based algorithms adopted by banks monitors:
Identity verification and approval then just takes a matter of minutes to complete.
Once verified, the customer can then submit an eSign via Aadhaar, and receive account credentials almost instantly.
To complete Video KYC verification, customers must first fill out an online application form and select the Video KYC option. Below is a detailed breakdown of the steps involved:
The customer receives a secure link to begin the live video verification process.
The customer reviews and accepts the terms and conditions. Here, permission must be granted for the financial institution to access the device’s camera, microphone, and location for regulatory compliance.
The customer enters a virtual waiting queue before being connected to a KYC agent for the live session.
The agent captures a live image of the customer and verifies it against the submitted ID proof using AI-powered facial recognition.
Advanced liveness detection technology ensures the customer is physically present and is not using a photo, video, or even a deepfake.
The agent cross-checks uploaded documents with the live video feed. After this, the customer provides a digital signature (eSign) and may answer security questions if required.
The entire session is recorded for audit and compliance purposes. After completion, the agent either approves or rejects the KYC based on verification results.
The RBI has been actively promoting and issuing guidelines for Video KYC to streamline the onboarding process while maintaining security standards. As of late 2024 and early 2025, RBI guidelines explicitly permit Video KYC as a valid method for customer identification and due diligence. The latest Annual Report further emphasizes the use of Video KYC for activating dormant accounts, highlighting the regulator's push for digital and customer-friendly solutions.
This is also because VKYC helps banks adhere to Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations by ensuring thorough customer verification.
Video KYC enables banks to onboard high volumes of customers from anywhere, which overcomes geographical limitations. This can especially be seen in the adoption of banking in general by the Indian population, with 96% of households having at least one bank account.
|
Challenge |
Solution |
|
Deepfake fraud attempts |
Advanced AI liveness detection |
|
Customer reluctance |
Multilingual video KYC support |
|
Regulatory changes |
Compliance updates with Fintechs |
AI-powered liveness detection goes far beyond simple checks like head movement or blinking. It employs sophisticated algorithms to analyze subtle physiological signals in the video feed that are indicative of a live person by using 3D mapping, Micro-expression analysis, and any movement-related tasks.
Providing KYC agents who are proficient in multiple regional languages or integrating AI-powered translation tools within the Video KYC platform can significantly enhance customer comfort and understanding.
Implementing VKYC and identity verifications systems like the Digitap Onboarding Suite will ensure that regulatory changes are regularly checked and implemented into the Video KYC workflow, ensuring complete and continuous compliance.
In 2002, KYC was introduced to the country as a good counter to identity fraud. In 2025, it has become a necessity.
As digital banking continues its upward trajectory, the need for efficient and secure digital identity verification will remain paramount. In the face of this growing segment, AI-powered Video KYC is rapidly solidifying its position as the gold standard for financial institutions worldwide. Video KYC has revolutionised banking onboarding, making it faster, cheaper, and more secure.
Digitap is at the forefront of this transformation, providing financial institutions with the tools to maintain comprehensive regulatory compliance, minimise customer drop-offs during the crucial onboarding phase, and ultimately cultivate stronger customer trust through a seamless and reliable experience.
Ready to upgrade your bank’s KYC process? Book a demo with Digitap to get started with fortifying your systems.