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How Do Physical KYC and Video KYC Fare Against Each Other?

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How Do Physical KYC and Video KYC Fare Against Each Other?

The Reserve Bank of India has made the Know Your Customer or KYC process mandatory at banks and other financial institutions. It is because doing KYC helps financial institutions to detect money laundering and other such illegal financial activities faster. With the rapid growth in technology, new ideas like video KYC solutions have become the norm nowadays. Let us look at how this innovative solution differs from the physical KYC process and what are the pros and cons of each side.

 

What is Physical KYC and Video KYC?

 

In the physical KYC process, the individual has to report to the bank or other respective institution for verification. They need to carry original documents along with their photocopies which would be submitted to the respective branch. Individuals also need to fill up the KYC form by mentioning their correct information and submit it along with the required ID documents' photocopies.

 

On the other hand, video KYC solutions enable a person to do the KYC verification process remotely from their homes. They need to book an appointment beforehand with the bank or other respective institutions. At that appointed time, they should be ready with a smartphone that has a working camera and proper network connectivity. An official executive will connect to them from the other side and conduct the video KYC verification process. The person has to just present the original ID documents in front of the smartphone's camera so that the video KYC solutions tool can capture clear images.

 

Benefits That Video KYC Has Over Physical KYC

 

From the above descriptions, we can see that video KYC has more advantages over the physical KYC process. Here are some of them.

  • The cost conducting of the video KYC process is cheaper. In the physical KYC process, banks need to print a lot of KYC forms and even get other supplies that can help to authenticate the identity of the individual. Moreover, they also need to train the staff for effectively doing this manual process. On the other side, most of the information input and processing is done by the video KYC tool. The official executive present at the video KYC verification process supervises it and is only responsible for verification, answering queries, and handling any sort of error.
  • In the physical KYC process, the banks have to put in a lot of personnel, time, and effort to conduct the process at a rapid pace. Even then, there is always a long queue at the KYC desk. In the video KYC process, the tool does most of the work. Thus, the official executive can complete the process at a much faster rate and can handle up to ten times the number of applications at the same time as that of a physical KYC process conductor.
  • There is a large margin of human error, data risk, and fraud activities that can be involved with the physical KYC process. Handling a lot of KYC applications manually and quickly can lead to human error. Moreover, written KYC forms can be easily accessed and edited. Thus, there is a huge data risk related to this which makes it easier for people to do fraud activities. The video KYC process is more secure and error-free. The tools used in this process follow the RBI guidelines and are thus serious regarding the security of data.

From these details, we can confirm that video KYC is more advantageous than physical KYC. The only drawback of the video KYC process is that it depends a lot on proper internet connectivity and faster network bandwidth.

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