What Is Video KYC? Meaning, Benefits & Process
The rapid digital disruption of Indian financial services in the last few years has led to the emergence of various innovative solutions.
The goal of video KYC (Know Your Customer) is to improve speed, convenience, and security while maintaining the same level of compliance rigour as in-person KYC.
The banking, fintech, insurance, and lending industries have all adopted video KYC as an essential part of client onboarding.
Video KYC has developed into a system that synchronises verification with your other digital processes, thereby replacing ineffective paper-based methods. Read on to learn more information regarding video KYC.
What Is Video KYC?
Video KYC is a remote digital process for verifying customer identity. It verifies a person’s identity via a live video call and eliminates the need to visit a branch or physical office.
Instead, in a VKYC process, identity verification is done through a fully secure online session. During the process, a trained official from the bank or NBFC guides you through the step-by-step process of completing the identification remotely.
Also Read: What is KYC - Different Types of KYC
Key Technologies Behind Video KYC
Video KYC works best alongside technologies like:
| Video KYC Technology | What It Does |
| Computer vision | Helps detect anomalies in ID documents or images. |
| Facial recognition | The customer's face is compared to the given identification document using facial recognition. |
| Biometrics | Fingerprints, voice, or face patterns are used in biometrics. |
| Liveness detection | Liveness detection verifies the client's actual presence. |
| Optical character recognition (OCR) | For verification, optical character recognition (OCR) extracts text from passports, IDs, and other documents. |
| AI-powered risk scoring | AI-driven risk assessment uses behavioural and historical trends to flag any questionable accounts. |
Benefits of Video KYC
Video KYC offers significant advantages over traditional verification methods as listed below:
Reduced Operational Costs
Digitisation of KYC helps reduce the overall time and resources spent on customer verification by any financial institution.
Enhanced Security and Fraud Mitigation
By integrating several biometric techniques with live video interviews, Video KYC improves security. By eliminating identity theft and fraudulent document use, this shields businesses from financial losses.
Enhanced Customer Experience
Video KYC offers a smooth and hassle-free experience to customers. They can verify their identity from anywhere and at any time.
Higher Compliance and Reduced Risk
Video KYC helps banks meet various compliance standards set by the Reserve Bank of India (RBI). It puts a strong emphasis on strong cybersecurity.
Video KYC Process: A Step-by-Step Guide
To initiate the video KYC process, here are the steps you need to follow:
Customer Initiates Request
The process starts with the customer submitting their details through a secure online platform.
Scheduling the Video Call
Later, a trained agent or official arranges a video call with the customer and guides them through the verification procedure.
Identity Verification
Clients need to present to the camera their identity credentials, such as driver's licences or passports. Information is extracted, and the document's authenticity is verified using optical character recognition (OCR) technology.
Question-Answer Session
After successful verification, followed by a random question-and-answer session based on submitted documents, real-time decision-making with audit logs occurs, and the account is activated, often within minutes or hours.
Recording and Final Confirmation
After completing the call, the officer will make a recommendation for approval or rejection of your application based on the verification. If successful, the application form will be digitally signed by the authorised officer.
Also Read: Documents Required for Online KYC and Document Preparation before Loan Application
RBI Guidelines for Video KYC in India
RBI guidelines for Video KYC, or V-CIP, in India mandate a live, secure, consent-based video call with a bank official for identity verification.
Among the key requirements for a video KYC are the following:
Geo-Tagging
RBI mandates live GPS coordinates (latitude/longitude) and a date-time stamp to be captured and stored with the recording.
AI/ML Technology for Assistance
The Reserve Bank of India encourages the use of AI and Machine Learning (AI/ML) technologies in the video-based customer identification process for tasks such as facial recognition, liveness detection, and fraud prevention.
Use of Secure Platforms
Video KYC should be done with secure infrastructure such as end-to-end encryption, IP address security, and regular security audits.
Concurrent Audit Mechanism
A comprehensive and concurrent log of the entire V-CIP activity must be maintained.
Trained Officials Only
RBI guidelines for Video KYC (V-CIP) mandate trained officials to conduct live, secure video calls for identity verification, ensuring real-time liveness checks.
Also Read: What is e-KYC : Meaning, Eligibility and Process
Video KYC vs. eKYC vs. Traditional KYC
While all of these methods are largely used to verify customers’ identity, they are quite different from each other.
Let’s understand the key differences between them here:
| Parameters | Video KYC | Traditional KYC | e-KYC |
| Process | verify the identities remotely | you need to visit the branch in person | can be done online by submitting Aadhaar details. |
| Documents | documents to be submitted digitally | physical copies needed | Aadhaar data needed |
| Time | quick onboarding | manual processing | near-instant verification |
| Cost | cost-effective | Manual processing leads to higher costs. | zero-cost, paperless process |
| Regulatory process and compliance | improves compliance through real-time checks | manual verification leads to less robust compliance | ensures data protection |
Also Read: What Is Personal Loan Verification Process & How Does It Work?
Video KYC: The Smarter Way of Customer Identification
Video KYC today has completely transformed the way people borrow money from lenders, making it faster and more convenient. Video KYC lets you complete your personal loan application quickly from home, ensuring a seamless verification process and saving time and reducing costs.
If you are also looking for a personal loan, Hero FinCorp makes it super simple with its video KYC process. If eligible, you can easily apply for a loan online, complete verification from the comfort of your home, and get quick access to funds without branch visits or paperwork.
Frequently Asked Questions
Is Video KYC mandatory in India?
No. Video KYC is a facilitated method, not the only mandatory way for identity verification in India. You can use offline KYC, too, though V-KYC offers quicker digital onboarding.
How long does the Video KYC session take?
A video KYC session is quick, typically lasting 5 to 15 minutes.
What happens if the Video KYC call is dropped?
If your Video KYC call is dropped, you can reconnect using the same link sent via email and SMS to resume the process.
Is Video KYC safe and secure?
Yes, video KYC is generally safe and secure, using encryption, facial recognition and liveness detection, and recorded sessions for transparency.
Which financial services can be completed using Video KYC?
Financial services that can be completed using Video KYC include opening bank accounts (current and fixed deposit), initiating loan applications, and opening demat & trading accounts.
