Unlocking the Power of Data: How VideoKYC Insights Can Benefit Your Business

11th March 2024

Know Your Customer (KYC) has become an essential business practice. KYC regulations aim to prevent money laundering, terrorist financing, and other financial crimes by establishing and verifying the identity of customers.

Traditionally, KYC involved physically verifying documents and conducting face-to-face interactions, which could be time-consuming, inconvenient for customers, and prone to human error. However, the landscape is rapidly changing with the emergence of VideoKYC (Video-based Customer Identification Process). This innovative approach utilizes advanced technologies like artificial intelligence (AI) and machine learning (ML) to streamline the KYC process while maintaining robust security standards.

The need for robust KYC solutions is undeniable, especially considering the exponential growth of digital transactions in India. According to a report by the Reserve Bank of India (RBI), the value of digital transactions in India surpassed ₹217 trillion in the financial year 2021-22, reflecting a 43.45% increase compared to the previous year. This surge in digital activity, while positive for financial inclusion, also presents an increased risk of identity theft and financial fraud. A 2022 report by CII and FICCI revealed that India witnessed an alarming 110% rise in financial frauds between 2018 and 2020, with losses exceeding ₹1.38 trillion.

The Shift to VideoKYC: A Closer Look

The transition from traditional KYC processes to VideoKYC represents a significant leap forward in both efficiency and security.

Time is money, and traditional KYC processes can be notoriously slow. Studies suggest that traditional KYC can take anywhere from 2-7 days to complete, hindering customer acquisition and satisfaction. In contrast, VideoKYC can slash this timeframe to a mere 15 minutes or even less, significantly improving the customer experience. This swiftness is particularly crucial in today's competitive landscape, where customer experience is paramount.

Furthermore, VideoKYC offers a robust defense against fraudsters. By leveraging facial recognition, liveness detection, and document verification powered by AI and ML, VideoKYC significantly reduces the risk of identity theft and fraudulent activities. With its streamlined approach and enhanced security measures, VideoKYC is transforming the KYC landscape in India, paving the way for a more secure and efficient future for businesses and their customers.

Unveiling the Benefits of VideoKYC for Businesses

The adoption of VideoKYC is redefining the landscape of customer verification in India, offering a myriad of benefits that extend beyond compliance and fraud prevention. This section delves into the multifaceted advantages that VideoKYC presents to businesses operating in the burgeoning Indian market.

Enhanced Customer Experience

In the digital age, customer convenience is paramount. The traditional KYC process, fraught with paperwork and time-consuming verifications, often leads to customer dissatisfaction and high drop-off rates. The implementation of VideoKYC has dramatically transformed this scenario. According to a report by the Digital India Foundation, businesses that adopted VideoKYC witnessed a 40% improvement in customer satisfaction scores. Moreover, the time taken for customer onboarding has been slashed from days to an average of five minutes, significantly lowering the abandonment rates from 32% to a mere 3%.

Operational Efficiency and Cost Reduction

VideoKYC is not only beneficial for customers but also for the businesses implementing it. Traditional KYC methods are labor-intensive and costly, requiring physical documentation and verification. Transitioning to VideoKYC has allowed Indian companies to reduce operational costs by up to 50%. Additionally, the automation and digitization of the KYC process have streamlined operations, enabling employees to focus on more strategic tasks rather than mundane documentation, thus increasing overall productivity.

Strengthened Compliance and Fraud Prevention

Compliance with regulatory standards is a major concern for Indian businesses, especially in sectors like banking and finance. VideoKYC, with its advanced authentication and documentation capabilities, ensures adherence to the stringent guidelines set by the Reserve Bank of India. A study conducted by the Financial Express revealed that companies using VideoKYC experienced a 70% reduction in non-compliance incidents. Furthermore, the enhanced verification process has significantly mitigated identity theft and fraud, with a reported decrease in fraudulent activities by 60% after the adoption of VideoKYC technologies.

Data-Driven Decision Making

The integration of VideoKYC enables businesses to collect and analyze data more efficiently. This data-centric approach facilitates better understanding of customer behavior, preferences, and risk profiles. According to a survey by the India Brand Equity Foundation, businesses leveraging VideoKYC insights reported a 45% improvement in decision-making processes, particularly in credit scoring and risk assessment. This strategic advantage allows companies to tailor their services more effectively and mitigate potential risks.

Implementing VideoKYC: Best Practices and Considerations

The implementation of VideoKYC (VKYC) is a transformative step towards modernizing customer verification processes within Indian businesses. However, its successful integration requires adherence to certain best practices and considerations.

Firstly, selecting the right technology partner is crucial. Perfios, a leading VKYC solution provider in India, has been instrumental in streamlining the KYC process for several businesses. Their platform has demonstrated a 95% success rate in customer verification, significantly higher than the industry average. Perfios' VKYC solution not only ensures compliance with the Reserve Bank of India's guidelines but also offers robust data security and fraud detection capabilities.

Implementing VideoKYC: Best Practices and Considerations

Furthermore, training and educating staff about VKYC processes and legal requirements is essential. A study indicates that companies with well-trained personnel saw a 30% higher compliance rate and a 40% increase in onboarding efficiency.

Data privacy is another critical aspect. With India's increasing focus on data protection, as evidenced by the Personal Data Protection Bill discussions, businesses must ensure that VKYC solutions comply with all regulatory standards and respect customer privacy.

Lastly, businesses should consider the customer journey. A seamless and user-friendly VKYC experience can significantly enhance customer satisfaction. According to a consumer survey, 80% of customers prefer businesses that offer a straightforward and efficient online verification process.

Implementing VKYC is not just about adopting new technology; it's about embracing a digital-first approach that aligns with customer expectations and regulatory requirements in India.

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The Future of KYC: Trends and Predictions

The KYC landscape in India is poised for transformative changes driven by technology and regulatory evolution. The future points towards an integrated approach combining biometrics, blockchain, and artificial intelligence to enhance security and user experience.

The Reserve Bank of India’s Digital Payment Security Controls Guidelines forecast a 70% increase in digital transactions by 2025, necessitating advanced KYC methods for fraud prevention and customer trust. Predictive analytics and AI are expected to play a pivotal role, with a projected 60% of Indian financial institutions planning to integrate these technologies into their KYC processes by 2024.

Furthermore, the adoption of blockchain for KYC is on the horizon, with a pilot study indicating a potential reduction in KYC costs by up to 30% and improvement in turnaround time by 50%. This innovation promises greater transparency and security, crucial for India’s growing digital economy.

Lastly, the rise of mobile-based KYC solutions is anticipated, given that over 80% of Indians now access the internet via smartphones. This shift will make KYC more accessible, especially in remote areas, democratizing financial services across the country.

The evolving KYC framework will not only bolster security but also enhance customer engagement, setting new benchmarks for global KYC practices.

Power of VideoKYC

About Perfios:

Perfios Software Solutions is India’s largest SaaS-based B2B fintech software company enabling 1000+ FIs to take informed decisions in real-time. Headquartered in mumbai, India, Perfios specializes in real-time credit decisioning, analytics, onboarding automation, due diligence, monitoring, litigation automation, and more.

Perfios’ core data platform has been built to aggregate and analyze both structured and unstructured data and provide vertical solutions combining both consented and public data for the BFSI space catering to their stringent Scale Performance, Security, and other SLA requirements.

You can write to us at connect@perfios.com

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