Digitization, has subjected banks to undergo transformation to a larger extent. The effect of technology take-off on society along with the entry of fintech start-ups catering to banking services have exposed banks to huge competition thereby introducing more virtual touch points that renewed the focus of banks on developing and engaging customer relationships rather than being stereotyped as mere transaction enablers. Digitization in banks is a key to a more meaningful and successful KYC compliance. Digitization will ensure centralization of KYC, which may result in negating bottle necks during Internal and external audits, client on-boarding, transaction processing and many more.
The digitization process can help Institutions in a way to provide an easy and hassle free process towards the KYC maintenance, as well as fulfil the Regulatory Requirements. Additionally it also help the Institutions to serve the customers in an easy and friendly manner.
Advantages of digital KYC:
Digital KYC (e-KYC) can lead to the below mentioned advantages for a bank:
a) Paperless KYC: The fully digitized platform eliminates the need for paper documents. However as per country specific, egulatory requirements to be fulfilled by the Institutions.
b) Consent Based KYC to avoid identity thefts: KYC is undertaken with the explicit consent of customers and thereby overcomes the risk of identity thefts. c) Real-time verification eliminates document forgery: To eliminate document forgery, real-time digital verification and confirmation of identity and address data.
d) Adequately parameterized: It allows to configure Institution specific Proof of Address (POA) and Proof of Identity (POI).
e) Simple user interface: Allows users to easily navigate through intuitive hyper linking with minimum number of clicks to access a customer’s KYC.
f) Highly secure: Role-based access control system ensures that only authorized users can have access to specific documents.
g) Single window KYC: e-KYC can be leveraged across all LOB’s of the FI, ensuring consistency, reducing TAT and thereby enhancing customer satisfaction.
To conclude, the KYC collection and Maintenance process can be upgraded with the help of Digitization, which would benefit everyone. The future has the possibility to replace the entire manual, paper based, time consuming, expensive and inefficient process needed to maintain up to date records of customers. Digitizing the process will provide an immense opportunity to maintain accurate information, at a low cost that is continually updated for any one (with permission) and can make transacting on the internet a processes with genuine trust between parties.