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RBI Video KYC Explained: Features, Advantages, Security Aspects
The Supreme Court of India recently banned the Aadhaar based eKYC, but allowed voluntary use of Aadhaar and also minimum KYC m-wallets again. RBI, on the other hand, has unveiled some new norms including the digital KYC. For one, the digital KYC process with video KYC is now paperless and can also be accessed remotely.
Video KYC: What Is It?
Going into the details, the new addition to the digital KYC is the video KYC feature. The process uses either Aadhaar eKYC, which is Aadhaar-based verification done online. It can also be done by combining a live photo of the customer using his Officially Valid Document (OVD) and his geo-location coordinates.
The video captures the details using an encrypted audiovisual encounter that comes from the requesting entity's domain, such as a bank-issued mobile app, notes firstpost. Throughout the entire video KYC process, the equivalent e-documents can be used like OVD or the PAN card. These documents must be provided in all cases. Further, this allows the user of the Digi Locker for KYC.
Video KYC Enables Paperless, Remote Access
The most obvious and prominent benefit of digital KYC is going paperless, which further decreases the costs. A report by The Economic Times notes that the Aadhaar-based eKYC has dropped the costs from Rs. 150 per KYC to just Rs. 20. Plus, it's been a game point in achieving scale, a crucial factor for many fintech companies in India.
Another big advantage of Video KYC is going completely remote as compared to the digital KYC, that requires a visit to the customer's doorstep or the nearest access point. Moreover, the video KYC requires no wet signatures, a compulsory requirement with digital KYC. The cost-effective method is helping to achieve compliance even in remote locations.
Video KYC With Futuristic Tech
Today we have various authentication technologies, particularly for KYC, like using artificial intelligence, blockchain, and even cloud-based API technology. Some of these techs are already in use in sectors like video KYC to open mutual fund accounts. RBI too has specified to enhance the use of face-matching and AI technology for video KYC.
These technologies can be made future proof by extending the use of facial recognition for authentication in banking and financial services. For instance, the facial recognition tech can be used in ATM and even payments at the point of sale merchandise.
What About Data Risks?
Video KYC collects a lot of sensitive information, just like digital KYC. However, there's the addition of facial data for biometric authentication, which adds to the list of sensitive data. In today's era, the number of data misuse and hacks have been spiking. So the question of how to protect the data arises.
For one, new ways like age risk mapping can be used. False-positive screening with machine learning can also be adopted. Moreover, robotics can be applied here to process the huge volumes of data, which can also be used for information protection. Data protection laws also need to be enhanced to ensure the utmost security.