Digital transformation of the KYC process – “EKYC”
Today, digitization is the new norm and makes banking and financial services more accessible and convenient. Until the launch of Aadhaar, KYC was mainly done by physical means through the collection and verification of physically authenticated copies of identity documents followed by visits to and by the customers. The process was costly, cumbersome, and discouraged financial service providers from expanding their customer base. A prime example is the waiting in queues while making an application for a service or having to carry the documents for the same. Online provisions have dealt with the issue, with the introduction of EKYC. Aadhaar based EKYC makes the authentication simple and easy. It made KYC efficient, secure and paperless, forming the backbone of emerging technology-based financial services firms not only from a cost perspective but also ensuring operational ease.
What is EKYC:
The EKYC process, commonly known as paperless KYC, is the process of electronically verifying a customer’s Identity. Now you will be wondering about the online KYC verification process. EKYC is also known as Aadhaar based EKYC as your identity is verified electronically through Aadhar based substantiation. This means that your Aadhaar details such as name, address, gender, date of birth, mobile number and email address is accessed by the service provider from the data base of the Unique Identification Authority of India (UIDAI). As a result, Aadhaar-based EKYC instantly provides proof of your identity and address to the service provider, avoiding tedious face-to-face verification.
EKYC vs Aadhaar authentication:
Aadhaar authentication is different from Aadhaar eKYC. In the case of Aadhaar eKYC, the service provider has access to customer data, such as name, gender, address, etc. from UIDAI database, but Aadhaar authentication just set up your credential. In other words, you can be verified with Aadhaar authentication without the service provider receiving your demographic information.
Step – by – Step process of EKYC:
EKYC is the term used to describe the electronic, online and digitisation of KYC processes. eKYC (Electronic Know Your Customer) is a paperless remote process that reduces the costs and traditional bureaucracy required for KYC processes.
- The customer presents his Aadhar card in front of the bank official. The official take note of the Aadhaar number.
- Biometric scanners record a potential customer’s fingerprint or retina image. OTP-based mobile authentication methods are also available now
- Once the device reads the biometric, the value is communicated with the UIDAI through secure servers.
- The biometric value entered is compared to the value stored in the database for this particular Aadhaar number.
- If the values match, it would be safe to assume that the potential customer’s identity is not fake.
- After successfully verifying the customer’s identity, UIDAI will publish all their identifying information like photo, address, date of birth, etc. to the bank or agent, eliminating the need to carry a lot of documents. UIDAI allows the agent/organization to store a soft copy of all details on their remote server, giving the agent/organization the freedom to access them when they need it.
Benefits of EKYC process for banks:
Instantaneous:
EKYC service fully automated online. This means that KYC data can be transferred in real time without manual intervention. The paper-based KYC process can take days to weeks to verify, but the eKYC process only takes a few minutes to verify and issue.
Reduce Fraud:
As banking transactions have moved to digital and mobile platforms, fraud has emerged in digital onboarding processes to take advantage of the system. As technology advances, banks will have more resources that they can develop to help them deal with fraudsters such as eKYC in the digital integration of banks.
Instead of authenticating users only the moment they log into an account, systems continuously monitor accounts to make sure users aren’t acting strangely. These technologies include OCR, facial recognition, activity detection, and fraud detection. In this way, banks can increase the security of their system and reduce fraud in the digital onboarding process.
Improve customer experience:
EKYC process provide a smooth and comfortable experience for their customers. EKYC processes increase customer satisfaction and ensure that customers can use the service from the first moment the business interacts with them.
Reduce document loss and paper usage:
EKYC is a paperless system that replaces the need to manage documents with paper documents. This allows a bank or business to reduce their carbon footprint by being eco-friendly and using a cloud-based online system. Paperwork not only saves the planet; it also helps reduce the costs associated with conventional KYC compliance.
In addition, the eKYC system also helps to secure customer data and prevent document loss. It solves the problem of document overload and papers that have to be stored in the traditional way in banks.
Who should obtain EKYC license?
KYC is mandatory for financial institutions dealing with customers when opening and managing accounts. When a business onboards a new customer or when an existing customer purchases a regulated product, standard KYC procedures are usually applied.
Financial institutions that need to comply with KYC protocols can obtain ekyc license include:
- Banks
- Credit unions
- NBFCs
- Wealth management firms and broker-dealers
- Finance tech applications, depending on the activities in which they engage
- Private lenders and lending platforms
CryptoBind EKYC is for all!
Digitize your client onboarding process with CryptoBind EKYC solution. Our solution offers complete remote identity verification and management tailored for banks, Non-bank Financial Corporations (NBFCs), PSOs, payment system providers and payment system participants companies for online client acquisition.
Advantages of CryptoBind EKYC:
- Compliance to RBI’s mandate for eKYC authentication & linking.
- Instant and fast Customer on-boarding
- Eliminates the possibility of frauds and identity thefts
- Avoid data creation for already existing data at UIDAI
- Saves time and Cost for Customer verification
JISA Softech is a cryptography-focused information technology company based in India. We offer cryptographic solutions to financial institutions, manufacturers, enterprises and government agencies. Our primary product lines have included industry-compliant Hardware Security Modules, Key Management Solutions, Tokenisation, Encryption, Aadhaar Data Vault, and Authentication solutions. All our Cryptographic solutions are sold under the brand name CryptoBind. Our innovative solutions have been adopted by businesses across the country to handle mission-critical data security and data protection needs.
To implement EKYC service contact us at:
Phone: +91-9619222553
Email: sales@jisasoftech.com
