10 Points to Keep in mind About RBI’s VCIP and Video KYC Programs

As per the current guidelines of the regulatory bodies, customer onboarding via video is gaining ground in India. Banks and financial institutions in India will be able to complete their customers’ KYC through video after the latest update to the Master Direction of KYC is approved by the RBI.

The Video Customer Identification Process has received approval by the Reserve Bank of India (RBI) for use in video-based KYC (know your customer) procedures by financial institutions in India (VCIP). A notification has been issued under the Prevention of Money-laundering (Maintenance of Records) Rules, 2005.

Video KYC: What You Need to Know

The digital Aadhaar-based address verification India that preceded VCIP entailed taking a picture of the customer in real-time and validating their Aadhaar number online. 

A fee of Rs. 20 was charged on each KYC transaction, making this type of digital KYC inconvenient and expensive. Going forward, customer and financial institution representatives will be on a video call to complete the new video-based KYC technique.

The following are ten things you need to know about the video-based KYC process known as VCIP:

VCIP Is A Paperless, Digital System

Vcip, as proposed by the Reserve Bank of India, is a completely paperless transaction. For financial institutions, it results in significant savings in the amount of time and resources needed to onboard new clients. There is less paperwork and less time spent verifying papers before a consumer can be officially onboarded.

Due to its digital nature, banks and other financial institutions can get more consumers onboard rapidly because the onboarding process is completed in minutes and requires less effort from the onboarding staff.

Banks Are The Only Entities That May Conduct Online Aadhaar Authentication

Aadhaar can be authenticated either online or offline using either an XML file or a QR code, according to the RBI’s circular on VCIP. Banks must ensure that XML files and QR codes must be no older than three days at the time of VCIP. 

VCIP registered entities that are not banks can only authenticate a customer’s Aadhaar using offline means.

In addition, the VCIP provider must make sure that the customer’s Aadhaar number is redacted or blacked out to protect the customer’s privacy.

Financial Institutions Must Verify That No Pre-Recorded Video Is Used

There must be no pre-recorded VCIP interactions conducted by the official. A series of randomly generated questions would be used in an audio-visual interaction between the official and the consumer, as per the RBI’s notification.

A video recording of this exchange is required, and the official will review it after VCIP to ensure that it was not pre-recorded.

The Financial Institution’s Domain Must Initiate VCIP

The video-based onboarding procedure must be started from the VCIP provider’s web domain. Customers can’t be invited to finish the onboarding process using third-party service providers by banks or financial institutions that are participating in VCIP, as they have to be logged in to their own domain at all times.

There Must Be A Way To Capture And Store Video Calls

Videotaping and archiving of the official conducting VCIP’s video-based contact with the consumer (a randomly generated series of questions) is required.

It is critical that the materials being stored be handled with care. To make sure that the recorded video interaction is not pre-recorded, the concerned official must check it before accepting the customer’s KYC.

AI And Other Technology Can Be Used By Financial Organisations To Improve VCIP

The Reserve Bank of India (RBI) encourages financial institutions to leverage the newest AI and other technology to improve VCIP and offer an easy-to-use and automated onboarding experience to its customers.

Before deploying the VCIP application, financial institutions must also conduct security audits and validations. For VCIP, SignDesk provides facial recognition as well as automatic data extraction, address verification India, and document image verification to make the process seamless, rapid, and automated.

VCIP Must Be Audited Concurrently

Concurrent auditing of VCIP has been mandated by the Reserve Bank of India (RBI). VCIP accounts can only be activated once a concurrent audit has been completed.

VCIP auditing and onboarding happen simultaneously in a concurrent audit. By offering an auditor portal and credentials, SignDesk’s digital onboarding solution ensures that the auditing process is concurrent.

Ascertaining A Customer’s Position Via Geotagging

VCIP will employ geo-tagging technology to verify that the customer is in India at all times.

Officials Must Receive Training On How To Conduct VCIP

Banking institutions should guarantee that the personnel responsible for implementing VCIP receive the necessary training. VCIP officials’ credentials and activity logs must also be retained.

Communication Over VCIP Must Be Simple And Secure

According to the RBI, officials must ensure that the VCIP procedure is seamless, real-time, secure, and end-to-end encrypted.

Conclusion:

To ensure that customers can be genuinely identified, the designated officer must make sure the quality of the video interaction is high. As a result, the video KYC solution employs artificial intelligence and machine learning algorithms to enable a frictionless onboarding process and industry-grade data protection.

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