{"id":3909,"date":"2019-09-23T07:44:58","date_gmt":"2019-09-23T07:44:58","guid":{"rendered":"https:\/\/signdesk.com\/in\/?p=3909"},"modified":"2025-09-17T05:29:05","modified_gmt":"2025-09-17T10:59:05","slug":"video-kyc","status":"publish","type":"post","link":"https:\/\/melento.ai\/en-in\/blog\/video-kyc","title":{"rendered":"How Video KYC is Disrupting Age-Old Methods of KYC?"},"content":{"rendered":"

Note: RBI(<\/b>Reserve Bank of India) has issued a <\/span>notification<\/b><\/span><\/a><\/strong> dated 09th January 2020, officially recognizing the\u00a0<\/span>Video-Based Customer Identification Process<\/b><\/span><\/a>\u00a0(V-CIP) as a method of customer identification.<\/span><\/em><\/span><\/h4>\n

Video KYC Solution<\/strong><\/span><\/h2>\n

The recent amendment in The Prevention of Money Laundering (PMLA) Act<\/a> 2002 by the Ministry of Finance allows several modes of capturing details of customers electronically. The notification states that the government should bring in, Video KYC<\/a>\u00a0to capture customer details electronically. Subsequently, RBI has legitimized the Video-Based Customer Identification Process(VCIP) as a means to verify customers, allowing onboarding via video KYC<\/a> authentication. You can read more about RBI\u2019s V-CIP<\/strong><\/a> and what it means for financial institutions here<\/a> <\/strong>and here<\/a><\/strong>.<\/p>\n

Any person who uses their Aadhaar card for identification can now carry out an Aadhaar verification for banks. The proof of possession of the Aadhaar card<\/a><\/span> has been added to the list of official documents needed for verification.<\/p>\n

Video KYC involves\u00a0a trained officials taking a live photo of the client with official and valid KYC documents such as the Aadhaar card or any other government KYC document during Video KYC. Digital signature and equivalent e-documents have also been allowed by the government as a way to complete the Video KYC<\/a><\/strong> process.<\/p>\n

The expert committee of micro, small, and medium enterprises<\/a><\/span> (MSMEs) has suggested that the video KYC verification can be used as another way to verify the identity of a person.<\/p>\n

What is Video KYC?<\/strong><\/span><\/h2>\n

Video KYC procedure is an automated & video-based customer due diligence process involving digital KYC verification for the purposes of customer onboarding. Video KYC allows businesses to utilize document image capture, digital ID validation & a face-to-face interaction with a trained official to digitize and expedite the KYC process.<\/p>\n

Video KYC identification has been mandated in various forms by regulators, including V-CIP<\/strong><\/a><\/span>\u00a0for banks & NBFCs, VBIP<\/strong><\/a><\/span> for insurance companies & VIPV<\/strong><\/a><\/span> for SEBI-registered intermediaries.<\/p>\n

The shift to video-based KYC methods is welcome, especially due to the increased demand for digitized methods in response to the conditions of the COVID-19 pandemic; and has already resulted in massive benefits for the BFSI sector and for customers by reducing operational costs & allowing contact-less customer onboarding.<\/p>\n

How Video KYC<\/a> Boosts Businesses<\/strong><\/span><\/h2>\n

The PMLA Act<\/strong> states that investment platforms, telecom companies, and lenders can acquire details of the customer digitally before acquiring them on their platforms. Performing\u00a0video-based KYC<\/strong><\/a><\/span> verification is extremely cost-effective and saves entities a substantial amount of time. A report by the expert committee of MSMEs has suggested certain steps to perform KYC<\/strong><\/a><\/span> via video.<\/p>\n

\"How<\/a><\/p>\n

The following steps must be followed to perform a video-based KYC:<\/strong><\/a><\/p>\n