Kyc Update: A Comprehensive Guide to Customer Verification

Customer verification is a crucial step in the onboarding process for businesses and financial institutions. It helps prevent identity theft, money laundering, and other financial crimes.

To comply with regulations, businesses must verify the identities of their customers through a process called Know Your Customer, or KYC. This process involves collecting and verifying customer information, such as government-issued identification documents and proof of address.

The KYC process is designed to be customer-centric, with businesses required to provide clear and concise information to customers about the verification process. This includes explaining the types of information that will be collected and how it will be used.

The KYC process typically involves several steps, including data collection, risk assessment, and ongoing monitoring.

KYC stands for Know Your Customer, a process used to verify a customer's identity and address. It's a crucial step in onboarding new customers, especially in countries where digital identities are widespread.

In India, eKYC is a popular method of verifying customer identities electronically through Aadhaar authentication, which is a national biometric eID scheme. This has made it easier to onboard customers remotely.

eKYC is considered more feasible as its accuracy improves with the use of Artificial Intelligence (AI). This technology helps extract digital data from government-issued smart IDs and verify identities online.

In India, 99.9% of the adult population has a digital identity, making eKYC a convenient option for customer onboarding. This is because 1.3 billion residents have obtained an Aadhaar number as of January 2023.

eKYC can be done via mobile, capturing information from IDs using OCR mode or extracting digital data from government-issued smart IDs with a physical presence.

Digital onboarding has become a crucial aspect of the KYC process, especially with the rise of digital channels and apps. In the United States alone, 64% of primary checking account openings were done online in Q2 2020.

To ensure a smooth onboarding experience, financial institutions can leverage digital onboarding, including video KYC (video identification), and biometrics through online and mobile channels. This can help adapt to customer preferences and provide a mobile-first experience.

A recent study from Visa and BAI showed that the trend of online account openings would continue after the pandemic. This highlights the importance of investing in digital onboarding solutions.

The digital onboarding process typically involves verifying an identity document and authenticating the document holder through additional biometric checks such as facial or fingerprint checks. A digital ID verification process enables a bank to automatically capture customer demographic data, which can be integrated into enterprise systems like CRM.

Here are some key benefits of digital onboarding:

To ensure compliance, financial institutions must maintain records on transactions and Information obtained through Customer Due Diligence measures. This applies to all new and existing customers based on materiality and risk.

The verification process for KYC is a crucial step in opening a bank account or conducting any financial transaction. It helps banks understand their customers better and reduces the risk of fraudulent activities.

There are two main methods of KYC verification: digital and offline. Digital verification involves verifying identity documents and authenticating the document holder through biometric checks. This process enables banks to automatically capture customer demographic data and integrate it into enterprise systems.

Offline KYC verification, on the other hand, involves visiting a bank branch in person and submitting physical copies of required documents. This process requires customers to download and fill out a KYC form, along with proof of identity, address, and other relevant documents.

The steps for offline and online KYC verification are straightforward. For offline verification, customers need to download a KYC form, fill in the necessary information, visit a bank branch, and submit the required documents. For online verification, customers can log in to the bank's website or mobile app, upload scanned copies of documents, and fill out the online KYC form.

The online KYC verification process is convenient and saves time for customers. It also allows for electronic verification of documents, making it a more efficient option. However, customers without a registered mobile number can opt for biometric authentication, where an authorized representative will visit their address to verify documents.

Online verification process is a digital process that involves verifying an identity document's genuineness or authenticating the document holder through biometric checks. This process enables banks to automatically capture customer demographic data, which can be integrated into enterprise systems.

For instance, a digital ID verification process can streamline the customer onboarding process, conduct further due diligence and risk assessment, and review for PEPs (Politically Exposed Persons). This is especially useful for financial institutions that need to maintain records on transactions and information obtained through Customer Due Diligence measures.

To complete the online KYC verification process, customers need to upload scanned copies of required documents and fill out the online KYC form. The steps include logging into the bank's website, providing a registered mobile number, and uploading self-attested e-Aadhaar online.

Here are the steps in detail:

If you don't have a registered mobile number, you can try to do your Aadhaar verification through biometric authentication. In this process, an authorised representative will visit your address to verify your documents.

Offline verification is a straightforward process that requires some effort, but it's worth it to get your identity verified.

To start, you need to download the KYC form, which is a crucial step in the offline verification process.

You'll then need to fill in the necessary information like your Aadhaar or PAN details, which typically involves providing your unique identification numbers.

Visit your nearest branch of the bank, which is usually a straightforward process if you know the location.

Submit the KYC form along with proof of identity, address, and other relevant documents, which can be a bit of a hassle but is necessary for verification.

Once the documents are verified, the KYC process is completed, and you'll be all set.

To update your KYC, you'll need to provide some essential documents. The list of required documents may vary depending on the bank, but generally includes proof of identity, such as an Aadhaar card, PAN card, or passport.

A valid passport is also required for Re-KYC process in case of change in KYC information. Additionally, you'll need to provide proof of address, such as utility bills or a rent agreement.

A recent photograph is also a must-have document for KYC verification. You can find the complete list of documents required for KYC by checking with your respective bank.

Some other documents that may be required include:

Note that if you're not active on Internet Banking, all photocopies of the documents must be self-attested by the respective document holder.