tl;dr
Pick Video KYC that
(1) blocks deepfakes with advanced liveness and multi-layer fraud checks,
(2) handles documents with OCR + backend verification,
(3) integrates cleanly with LOS/Core/CRM via APIs,
(4) auto-creates audit trails and enforces RBI/DPDP controls, and
(5) delivers a fast, mobile-first, low-bandwidth, multilingual UX with proven >95% first-pass success and sub-5-minute flows—plus clear pricing that scales.
As seen in every sector, industry, and generation, customers expect everything to happen instantly. They want their loans approved yesterday, their accounts opened in minutes, and their entire banking experience to be as smooth as ordering food online. The numbers tell the story—UPI alone processed 16.99 billion transactions worth ₹23.48 lakh crore in January 2025.
But here’s the challenge: while customers want speed, regulators want security. As a financial institution, you aim for both. However, the stakes are a lot higher for NBFCs and fintechs. Get it wrong, and you’ll either lose customers to lengthy processes or expose yourself to fraud that could shut you down.
Let’s go through what really matters when selecting Video KYC software for your NBFC.
The Reality Check: Where We Stand Today
Before diving into features, let’s talk about the elephant in the room. The RBI takes every aspect of digital onboarding and identity verification protocols seriously. Recent updates to KYC guidelines, aligned with PMLA Rules amendments, have significantly strengthened India’s anti-money laundering framework. NBFCs must ensure full compliance with KYC guidelines, including those collected by agents or brokers on their behalf.
Traditional fraud isn’t as much of a threat anymore, but something far more insidious is. In 2024, 49% of companies experienced both audio and video deepfakes, up from 37% and 29% respectively in 2022.
Think about that for a moment. Nearly half of all companies are dealing with sophisticated fake videos and audio recordings. For NBFCs, who often have far fewer resources than their traditional banking counterparts, this news is a nightmare.
What Your Video KYC Software Actually Needs to Do
1. Stop Fraudsters in Their Tracks
Let’s start with the most critical feature: fraud prevention. You need software that can tell the difference between a real person and someone trying to fool your system with a fake video or stolen identity.
Look for liveness detection that works without asking customers to blink, nod, or wave at their camera. Nobody wants to feel like they’re performing tricks for a computer. The best systems can verify someone is real and present without making them jump through hoops.
Your software should also have multiple layers of protection. Think of it like a security system for your house—you don’t rely on just one lock. The system should check facial features, verify documents, and analyze behavior patterns all at once. When deepfake attempts are happening every five minutes globally, you can’t afford to rely on a single verification method.
Most importantly, everything should happen in real-time. There’s no point in discovering fraud after you’ve already disbursed a loan. The system needs to catch problems as they happen, not days or weeks later.
2. Handle Documents Like a Pro
Your customers aren’t just bringing Aadhaar cards and PAN cards any more. Driving licenses, passports, bank statements, and salary slips are all important documents that need to be analyzed. Your video KYC software needs to handle all of these without breaking a sweat.
The software should read documents automatically and fill in forms for your customers. Nobody wants to type their name, address, and date of birth when it’s already printed on their ID card. Good document processing eliminates manual data entry, which means fewer errors and faster processing.
But reading documents isn’t enough—the system needs to verify they’re genuine. Can it spot a tampered document? Does it cross-check details with government databases? These aren’t nice-to-have features; they’re essential for staying compliant and avoiding fraud.
3. Play Well with Your Existing Systems
Here’s something many NBFCs learn the hard way: great software that doesn’t integrate with your existing systems is just expensive frustration. Your video KYC solution needs to work seamlessly with your loan management system, core banking platform, and CRM tools.
Look for comprehensive connectivity options that don’t require rebuilding your entire technology stack. The software should connect easily with credit bureaus, government databases, and other verification services you already use.
Think about growth too. As your NBFC expands, will the software handle increased volume without slowing down? Can it adapt to new requirements without requiring a complete overhaul? These questions matter more than you might think.
4. Keep Regulators Happy
Compliance isn’t only about following rules. You need to have solid, irrefutable proof that you’re following the rules. Your video KYC software should automatically generate reports that align with RBI requirements and other regulatory frameworks.
Every verification attempt, every decision, every piece of data should be logged with timestamps and user identification. When regulators come calling (and they will), you need to show them exactly what happened, when it happened, and who was involved.
The system also needs to handle data protection requirements properly. Customer information must be stored securely, accessed only by authorized personnel, and retained for the required periods.
Making It Work for Your Customers
Speed That Actually Matters
Video KYC allows loan lending companies to onboard customers virtually and reduce customer drop-offs by 20% while onboarding customers faster than ever. But speed means nothing if the process is frustrating or unreliable.
Your target should be complete onboarding in under 5 minutes for straightforward cases. The system should also have high success rates. If customers are repeatedly failing verification for technical reasons, you’ll lose them to competitors with smoother processes. Look for solutions with proven success rates above 95% for first-time verifications.
Mobile Isn’t Optional Anymore
Most of your customers will complete video KYC on their smartphones. The software needs to work flawlessly on mobile devices, with interfaces designed specifically for small screens and touch interactions.
This means responsive design, optimized video quality for mobile cameras, and minimal data usage for customers with limited internet connectivity. If your video KYC process burns through someone’s data allowance, they won’t complete it.
Supporting Everyone
In India, some customers are extremely tech-savvy, while others need more guidance. Your Video KYC solution should accommodate both. Some quick ways are:
- Multi-language support
- Low data requirements
- Accessibility features for customers with disabilities.
The Technology That Makes a Difference
Modern video KYC isn’t just about video calls and document photos. The best solutions use sophisticated technology to make better decisions faster.
Risk assessment should happen automatically, analyzing multiple factors to determine how thoroughly each customer needs to be verified. Low-risk customers should zip through quickly, while high-risk cases get additional scrutiny.
The system should learn and improve over time. Each successful verification and each caught fraud attempt should make the system smarter. This isn’t about replacing human judgment—it’s about giving your team better information to make decisions.
Smart routing ensures each customer goes through the most appropriate verification process. A returning customer with a good history shouldn’t face the same scrutiny as someone applying for the first time with incomplete documentation.
What This Really Costs
When choosing Video KYC software, you need to look beyond just the basic subscription price and consider implementation costs, training, ongoing support, and system maintenance.
Look for transparent pricing without hidden fees or surprise charges when you scale up. Some vendors price per transaction, others charge flat rates. Choose the model that makes sense for your volume and growth plans.
Consider the efficiency gains too. Video KYC allows customers to be onboarded within minutes and loans to be disbursed just as quickly. This translates to real cost savings in operational expenses and dramatically improved customer satisfaction.
Calculate the cost of getting it wrong. Fraud losses, regulatory penalties, and reputation damage from security breaches cost far more than investing in robust Video KYC software upfront.
Choosing the Right Partner
The vendor you choose matters as much as the software features. Look for companies that understand the NBFC sector, not just generic technology providers trying to sell to everyone.
Your vendor should have deep regulatory knowledge and experience working with NBFCs similar to yours. They should understand your challenges, not just provide generic solutions.
Continuous innovation is crucial too. Fraudsters don’t stand still, and neither should your security technology. Choose vendors who invest in research and development to stay ahead of emerging threats.
Finally, consider support quality. When your video KYC system goes down or encounters problems, you need responsive, knowledgeable support that can resolve issues quickly.
Future-Ready Software
The Video KYC landscape changes constantly. New fraud techniques emerge, regulations evolve, and customer expectations shift. Your chosen solution needs to adapt to these changes without requiring complete replacement.
Look for software that can incorporate emerging verification methods like blockchain-based identity and advanced biometric techniques. While you don’t need these features today, you might need them tomorrow.
Regulatory flexibility is essential too. When new compliance requirements appear, your system should be able to implement them quickly without major disruptions.
The Bottom Line
Choosing the right Video KYC software is a strategic choice that will impact your NBFC’s growth for years to come. The right solution balances robust security with excellent user experience, provides comprehensive compliance support, and scales with your business.
At Digitap, we’ve learned that every NBFC has unique needs based on their customers, products, and goals. But the fundamental requirements remain the same: stop fraud, delight customers, satisfy regulators, and do it all efficiently.
The NBFCs that will thrive in the coming years are those that can onboard customers quickly and securely while maintaining the highest compliance standards.The transformation is happening now. The question isn’t whether to invest in video KYC technology, but how to choose the solution that will serve your NBFC best in an increasingly digital world.
If you’re looking for the perfect Video KYC solution for your NBFC, you’ve come to the right place. Book a demo with Digitap today to safeguard your NBFC’s and your customers’ data.