In this technologically advanced world, every field of services has switched significantly to digital means of operation. It is also the demand of the customers and consumers to get access to various products and services in a convenient and efficient manner. Hence, the use of digital media is incorporated into every field. This was observed during the Covid-19 pandemic, as people were diverted from their everyday life and each sector transitioned to digitalization. The same is the case with the finance sector as the banks and other financial institutions also introduced various digital tools to make their services more efficient for the customers, mitigating the inconveniences and allowing smooth functioning. However, the rapid transition to the digital world brought challenges and threats as it paved the way for illicit practices like hacking, money laundering, and identity theft. KYC is one of the digital security tools in fintech that facilitate businesses to protect their customers from such identity breaches by securing their identity information through a multi-step verification process.
KYC stands for “Know Your Customer” or “Know Your Client,” and financial institutes confirm their customers’ identities through KYC protocols to prevent fraud and money laundering. It allows transparency in monetary transfers through banks. It is the mandatory process of identifying and authenticating the customer’s identity at the time of account opening and regular intervals. As discussed before, KYC is useful in digital customer onboarding. Customer onboarding refers to the techniques businesses use to introduce their services to their customers. It is carried through various ways; however, it is crucial to understand this phenomenon in the context of KYC. The banks require an adaptive KYC verification process to improve identity verification and protect the business and customers from fraud and other criminal activities.
Banks used traditional KYC procedures before entering the digital age through manual procedures. They were less effective in providing security from financial crimes. On the other hand, video KYC is a service that refers to the one-on-one or face-to-face interaction between the business, more commonly, the banking sector or any other financial organization, and its customers being carried via a video call. Even though some banks still use traditional KYC procedures, most have transitioned to Video KYC solutions. Customers show their identity documents via video call for identity verification and security. Other authentication methods may be used in KYC through video calls, like liveness checks and confirming the customer’s location.
Video KYC vendors are the companies working to provide organizations like banks with the services of KYC using video tools. They can commonly be known as video KYC service providers aiding financial institutions in digital customer onboarding. Such service providers or vendors play a significant role in a bank’s customer onboarding. Secure customer onboarding is only possible once the organization finds and partners with a reliable video KYC vendor. The trustworthiness of that vendor is displayed through its track record of efficient performance in confirming customers’ identities and combating potential threats. A reputed video KYC vendor that abides by the regulations is the key to ensuring safe digital onboarding. Moreover, it plays an essential part in providing the business with tailored solutions to any possible problem in terms of customer onboarding digitally. Additionally, the video KYC vendors aid banks and other organizations by being user-friendly, as well as monitoring and regulating customer activities. They also provide training to the business employees so they may use the service to its full potential and advantage.
Banks are the most prominent and significant financial institutions regarding KYC and customer identity protection. Thus, the importance of customer onboarding videos can be understood in the context of the banking sector. Video KYC vendors create an easy way for the banks to verify their customers’ identity and location by interacting face-to-face with them through a video call. The vendors provide customer-friendly features on the bank’s website through which the users can register themselves. After completing the registration process, the bank conducts a video call through its representative, trained effectively by the video KYC vendor. The customer’s liveness is checked, after which the representative verifies the former’s location of the given address through geo-tagging in real-time or Google Maps. Other than that, the provided identity documents are also reviewed for authentication, after which the bank representative determines whether the customer passes the KYC process. Transparent and efficient customer onboarding is solely possible because of the tools and features provided by the video KYC vendors. Therefore, they play an immensely significant role in the rapidly advancing world of digital technologies.
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