Here’s what every bank must know about eKYC solution

Digital transformation made a huge impact on almost every industry, but the one industry that enjoyed the transformation the most is banking. Right from payment transfer to managing the accounts and everything in between, things have become completely digital.

Now you no longer need to carry cash for your day-to-day needs, and you no longer have to visit a branch to get things done. Everything can be done over your smartphone or tablet.

One of the banking activities that makes the most of digital transformation is KYC. Today, we have a new term called eKYC (electronic Know Your Customer), where the customer onboarding is done digitally. No more need to visit your customer, no more physical documents needed, no waste of valuable time and money.

In this blog, we will discuss what every bank must know about eKYC solutions, including the benefits, prerequisites, process, and much more.

Let’s get started!

What is eKYC?

eKYC is the process of digitally verifying the identity of the customers. These systems have advanced features to ensure that identity verification complies with the rules and regulations. When talking about your bank, this process is very important as it helps them prevent fraud and valuable data.

The biggest difference between the eKYC and traditional KYC process is the absence of physical documents. In traditional KYC, customers must present proof of their identities in physical forms, which is usually done by either the customers visiting the bank or the bank executives visiting the customer.

In the case of eKYC, all a customer needs to do is open the banking app, provide necessary details, and remain present in the camera for identity verification.

With this, we can easily understand that eKYC is faster, more reliable, and environmentally friendly when compared to traditional KYC methods.

The Key Components of Banking eKYC

The eKYC solutions for the banking sector have a few key components to ensure the entire process goes smoothly and the identity of the customer is verified completely. Some of these components include:

1. Digital Identity Verification

The first component is digital identity verification, which can be done by providing identity documents. Then, your bank executive connects with the customer and asks some questions like Name, Address, DOB, PAN number, an OTP sent on mobile number, etc. The final stage is verifying the identity of the customer which is done with the help of a live camera.

2. Document Verification

Then comes the document verification process. Since the app has the feature of uploading documents, your bank executive asks to see important documents, like the PAN card or any government-authorized identity proof in real-time. Again, the camera is used for the same.

3. Biometric Authentication

The modern eKYC solutions come with in-built biometric authentication systems, which can capture the fingerprints and retinas of the customer while ensuring a secure customer onboarding process.

Benefits of eKYC Solutions for Banks

The eKYC solutions have to offer many benefits to the banks, including:

1. Operational Efficiency

As we have discussed earlier, eKYC solutions eliminate the requirement for physical documents and in-person visits. This certainly reduces the time taken in KYC processes.

Since it reduces paperwork and manual processing, your banking executive can perform multiple KYCs in duration that would require him to do one KYC with the traditional method. This increases the efficiency of the operations, saving in cost and time.

2. Cost Savings

eKYC saves a lot of money, both for your customer and your bank. Since the customer or your bank executive does not have to meet in person, the cost of fuel is saved. Also, since it does not require manual processing, your bank may reduce the overhead cost of hiring more people.

3. Meeting the Compliances

The modern eKYC systems come with additional features complying with the rules and regulations of the governing bodies. Since manual labor is reduced, the chances of human errors are also reduced. Complying with the rules and regulations results in saving huge amounts of money that your bank may have to pay in case of breaking the laws.

4. Better Customer Experience

Needless to say, if you give your customers the freedom to get things done from the comfort of their homes, they enjoy a better experience. The eKYC solutions allow customers to avoid visiting your bank in person, and get their eKYC done at odd hours without compromising their schedule.

Conclusion

Technology is no longer a luxury. It has become a necessity in today’s times. As a bank, your customers are your biggest asset and it is your responsibility to ensure your customers get the treatment they deserve. eKYC is one such approach that would give your customers a great user experience, while also ensuring your KYC process is fool-proof and cannot be hampered. DigiPay.Guru is a globally recognized fintech solution provider that offers advanced digital payment solutions to banks, fintechs, financial institutions, NBFCs, and businesses. Our comprehensive suite called DG Bank provides products and services such as Mobile Money, Agency Banking, International Remittance, eKYC, Prepaid Cards, Merchant Acquiring, and Scan & Thru.