Why should Financial sectors envisage digital KYC process?
Since the Demonetization or I can say Repelling the float of the large value notes in the market, the large portion of the population in India turned to online transactions. This is a good sign, though. Of course, it has its own cons which can be maintained or reduced with corrective measures.
Digital KYC or I can say Digitize your Customer still need a lot of attention as it is not completely adopted online process. Insurance and related companies, Mutual funds investment companies, Loan providing intermediaries, Microfinance companies and other financial sectors where ever the KYC norms are involved are not fully inclined towards DIGITAL KYC.
Digitization in financial sectors is a key to a more meaningful and successful KYC compliance. Digitization will ensure centralization of KYC, which may result in negating bottlenecks during Internal and external audits, client onboarding, transaction processing and much more.
A few advantages associated with the Digitization of KYC:
- Less Paper Work: The fully digitized platform reduces the need for paper documents. However as per country specific, regulatory requirements to be fulfilled by the Institutions.
- Instantaneous: Reduced manual intervention saves a lot of productivity time.
- Consent Based KYC to avoid identity thefts: KYC is undertaken with the explicit consent of customers and thereby overcomes the risk of identity thefts.
- Real-time verification eliminates document forgery: To eliminate document forgery, real-time digital verification, and confirmation of identity and address data.
- Adequately parameterized: It allows configuring Institution-specific Proof of Address (POA) and Proof of Identity (POI).
- Simple user interface: Allows users to easily navigate through intuitive hyperlinking with a minimum number of clicks to access a customer’s KYC.
- Highly secure: Role-based access control system ensures that only authorized users can have access to specific documents.