Do you use V-CIP KYC (Video-based Customer Identification Procedure) to onboard your customer? If not, you should! It can help your company save up to 70% of its operational costs and decrease the KYC turnaround time by almost 90%.[1]? KYC solution providers are leveraging digital channels to authenticate customers to prevent financial fraud while enhancing the experience with the company.
The RBI, in 2020, mandated a video call between the customer and the company to conclude the KYC process. It came to be known as the V-CIP KYC. Banks, telecom companies, NBFCs, insurance, mutual funds, logistics, P2P marketplaces, and digital wallets carry out KYC while onboarding a customer.
However, a regular re-KYC is important to keep the records up to date:
- For low-risk customers, every 10 years is recommended for a re-KYC
- For the medium-risk customers, every eight years and
- For low risk-customers, every two years.
Earlier, they relied on the traditional physical form of KYC updating, which was cumbersome and not hassle-free to carry out. In 2021, RBI’s new circular put the responsibility of the V-CIP KYC process to assess the genuineness of their customers from time to time.
Here are the reasons for using V-CIP KYC to vet your customers periodically:
#1 Enhanced customer experience
The V-CIP allows your low-risk customers to carry out the Re-KYC process from the luxury of their homes. It can even be done when someone is traveling or from any place globally. The V-CIP KYC process is not cumbersome and can quickly be done with just a few steps.
#2 Better Re-KYC success rate
Compared to traditional KYC, this provides a smoother experience for the customers. No matter where they are, they can carry this out, leading to a better re-KYC success rate. Since the onus now lies on the company, it is prudent to bring a technologically savvy KYC solutions provider onboard to ensure that more of the client base can carry out this process.
#3 Avoid the long queues for Life Certificate submissions
Everyone is aware of the hassle that surrounds submitting Life Certificates. Government pensioners no longer need to queue up at branches. Adopting V-CIP KYC will make you more operationally efficient as the submissions can take place over a video call.
#4 Make life easy for senior citizens
A major chunk of low-risk customers is over 60 years, the senior citizen category. It is unfair to expect them to visit branches now and then to carry out the re-KYC process physically. The V-CIP KYC process allows them to carry out the process from a location that they are most comfortable in, and in a hassle-free manner.
#5 Proactive prevention of financial fraud
Traditional KYC has a few loopholes making it more susceptible to fraud. People can use appropriated or fake identities to benefit from financial services. In the V-CIP, the institution has end-to-end control over the Re-KYC process, making it difficult for people to breach its security. This exterminates the misappropriation of pension funds by impostors using Digital Life Certificate or Jeevan Pramaan.
#6 No need to chase remote and rural customers
Rural customers tend to open accounts to benefit from government subsidies. Following up with them from time to time becomes costly and operationally inefficient. V-CIP is an effective process that is not costly and helps update the information from dormant account holders via a basic video call.
#7 V CIP KYC is perfect for a socially distant world
The pandemic led to many limitations on physical interactions. V cip kyc was a blessing in disguise during those times and continues to act as one. It is because it safeguards the safety of both, employees and customers by carrying out required processes virtually.
The above benefits make it more than clear, that V-CIP is transforming the entire system of KYC verification by making it seamless, safe, reliable, and quicker.
