What is video KYC, and how does it work?

The KYC (Know Your Customer) process is a necessary step used by banks and financial institutions to confirm your identity. With advancements in digital technology and approval from the Reserve Bank of India, it’s now possible to complete this verification through video calls.

What is video KYC?

Video-based KYC is a digital method used by financial institutions to authenticate their customer’s identities via video calls. It is an alternative to the time-consuming and standard KYC process typically done at the branch. With video KYC, consumers can remotely verify their identity, making the process more convenient.

How does video KYC work? 

Customer on-boarding process: The process starts when the customer submits their details through a secure online platform. Subsequently, a trained agent arranges a video call with the customer and guides them through the verification procedure.

Face recognition and liveness detection: Sophisticated facial recognition algorithms scrutinise the customer's face to ensure it matches the photo on their identity document. Liveness detection technology adds another layer of security by identifying and preventing spoofing attempts through verifying the user's liveliness.

Document verification: Customers are required to present their identity documents, such as passports or driver's licences, to the camera. Optical character recognition (OCR) technology is employed to extract pertinent information and authenticate the legitimacy of the document.

Live video interaction: During the video call, the agent engages with the customer, poses additional questions if necessary, and evaluates their overall appearance for any indications of suspicion or impersonation.

The video KYC is carried out only through a bank’s website or its mobile application. You cannot leave the bank’s website or mobile application until the video KYC process gets over. There is no requirement for any third-party video calling application such as Zoom, WhatsApp, Google Duo and Skype.

Benefits of Video-KYC:

Remote verification: Customers are not required to be physically present for the verification process, making it convenient for individuals regardless of their location.

Inclusivity: Video KYC makes the verification process more inclusive, particularly benefiting people residing in rural areas who may face challenges in accessing physical branches.

Efficiency: Video KYC enables faster and smoother verification procedures, enhancing the overall on-boarding experience for customers.

Cost reduction: Financial institutions benefit from reduced costs associated with compliance and verification processes, as video KYC streamlines operations and eliminates the need for physical infrastructure.

Enhanced security: By eliminating middlemen or agents for document collection purposes, video KYC ensures the safety and security of customer documents, reducing the risk of fraud or mishandling.

To initiate the video KYC process, adhere to the following steps:

Visit the official website: Navigate to the official website of the bank or NBFC.

Complete online form: Fill the required details in the online form provided.

Consent for Aadhaar/e-PAN verification: Provide consent to the lender to access your Aadhaar details or undergo an e-PAN verification process.

Provide location access: Grant access to your phone’s location for geo-tagging purposes.

Upload valid documents: Upload officially valid documents, which can be images on your phone, PDF files, or documents stored in the government’s DigiLocker facility. 

Verify details and OTP: Validate the details in the form before sharing the OTP sent to your registered mobile number. This OTP serves as your customer signature on the application form.

Receive video call link: Upon OTP validation, receive an SMS with a link to the web-page hosted by the bank for the video call. Some banks may directly redirect you to the video call webpage from their website.

Initiate video call: An officer will initiate the video call to verify the details provided based on the uploaded documents.

Capture live photograph: During the video call, a live photograph will be captured and cross-checked with the photograph uploaded earlier. Facial recognition technology may also be utilised for confirmation.

Display documents: You might be asked to display certain documents during the video call, from which the required details will be captured by the software.

Answer questions: Be prepared to answer random questions based on the documents provided.

Verification and recommendation: 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.

Physical form signing: The officer will take a printout of the application form and obtain your signature, which will be scanned and uploaded onto the system. The original hard copy of the form may be returned to you.

With AI turning more intelligent and generative tools becoming more user-friendly video KYC will become more convenient. However, scammers can now fool a live video verification session by introducing deep-fake videos into the system.

Talking to Business Standard on how AI will Change the Video KYC Landscape? Balakrishnan, Co-founder & CEO, Autonom8 said, “Artificial intelligence (AI) has the potential to improve video KYC in several ways.”