Born in 1978 in Mumbai, Praveen completed his schooling from St. Mary’s High School, Mt. Abu (Boarding School in Rajasthan). He completed his Bachelor of Engineering in Computer Science from D.Y. Patil College of Engineering, Mumbai. After a brief period of employment, he became a first generation entrepreneur when he started Celusion Technologies. The idea was based on the premise that they could build great software but today their software is changing the way people look at finance.
The pandemic undoubtedly rocked the country, but a saving grace emerged from unprecedented technological adoption. The industries needed to overhaul business strategies and embrace digital technologies to get the businesses back in operation or confronted with the prospect of extinction. Financial services had to adopt new technology to stay solvent during the crisis since the customer onboarding or KYC processes, which required face-to-face interactions, got disrupted. Thus, progress in developing a Video KYC platform significantly accelerated during the pandemic that resulted in the outcome of online onboarding platforms that validates the customer’s credentials.
Consumers who have proactively invested in India’s financial sector are barred from doing so after residing in a foreign nation since these consumers are classified as NRIs or non-resident Indians. However, to use the preexisting services, the customer must switch their Indian financial account to a non-resident external account; as a result, the financial business requires the client to verify his papers again through the KYC procedure. During the epidemic, banking institutions allowed Indian people to use the video KYC but not for NRIs outside Indian territory.
Why should financial governing bodies encourage video KYC for NRIs?
Geotagging: Financial institutions in India need clients’ geographical whereabouts to be traced (geotagging) to establish that the consumer is physically present in India. Thus, video KYC is only accessible to present customers physically. Therefore, many small and large distributors have experienced difficulty investing for NRIs who are not KYC compliant as they are confined to their homes due to coronavirus outbreaks. Since the KYC platforms do not enable logins outside India, video KYC for NRIs is not performed because the technology restricts the customer per the rules.
Bank Mergers: Banking credentials may change every time a bank merges, making it impossible for an NRI to deposit investment savings into a bank account without submitting a new bank mandate. This exacerbates the situation for NRIs residing overseas, as they cannot physically visit bank offices. Only NRI clients with necessary financial registrations can access their savings after submitting a “Change of bank mandate.” The process is complicated for NRIs as they need to sign the documents and request a new bank mandate, which takes between 10-15 days to complete.
Here is a look at how video KYC will benefit NRI clients:
Saves traveling: Previously, the KYC procedure required the NRI client to visit the company headquarters or vice versa. It took a lot of time and created several roadblocks for clients to contact authorities. Most of them would be unreachable at the office regularly, leaving them dissatisfied with lost efforts and money. Video KYC eliminates the physical distance between the NRI client and the financial institution, allowing them to complete the process at their leisure. Video KYC may now be adopted globally without jeopardizing personal safety or exceeding social distance norms for the present pandemic.
Saves time: A typical financial enterprise process takes 2 to 3 days, requiring the NRI client to visit in person at least one time. The process now takes under 15 minutes for online video KYC to allow quick and easy verification procedures, resulting in a better client experience during onboarding.
Saves cost: For financial institutions, Video KYC for NRI clients reduces the costs of compliance and verification processes since most of the process is completed online, including form filling and customer verification. It also enables call recording, which may be retained for auditing or future reference.
Ensures security: Video KYC is a seamless, encrypted, real-time audio-visual interaction with NRI customers that is handled securely in real-time. The communication quality is sufficient to identify the NRI consumer without a doubt. Financial institutions also do vibrancy checks to protect themselves from hoaxes and other fraudulent operations. Video KYC eliminates the need for intermediaries or agents in document collection, ensuring safety and security.
Financial authorities should take necessary actions to ease KYC and NRI client onboarding in the face of the pandemic by implementing appropriate protections. Since no KYC portal is available internationally, a possible solution could be found through governmental and regulatory intervention. Since contactless services are becoming more and more essential in the age of Covid, Video KYC is one of the technologies that will only grow.