We have witnessed technological advancements in nearly every part of our lives over the past few years due to the digital transition, and banks are no different. Customers welcome the shift from a closed, manual system to an open, digital one. The Know Your Customer (KYC) and the e-KYC procedure was implemented during customer onboarding as a result of this one. It led to numerous banks beginning to digitise and automate their operating processes.
Businesses in the BFSI (Banking, Financial Services, and Insurance) industry must digitise the KYC procedure. The goal is to stand out and dominate the market. The phrase “electronic know your customer” refers to a paperless solution. It automates the human identification procedure using cutting-edge technologies like artificial intelligence and machine learning.
By integrating online KYC into their procedure, digital banking companies can get a number of advantages. Let’s look at them down below!
Services for internet banking that are easily accessible:
Customers can verify their identity online without physically going to the branch office. Banks can remotely verify the identities of their customers by using human biometric authentication through the e-KYC procedure. As a result, the entire process is expedited, giving clients and banks a straightforward and convenient option.
Peer-to-peer lenders, crowdfunding sites, online lenders, and credit-scoring companies can all benefit greatly from e-KYC platforms. Studies on these platforms’ use cases demonstrate that they have a favourable impact on the loan industry as a whole.
eKyc solution’s faster digital onboarding procedure:
The time it takes to request data or papers from consumers might be cut down by digital bank firms. The eKYC has taken the place of the KYC process, which often required clients to manually fill out their personal information on application forms. Customers benefit from quick onboarding while banks are able to use client data more effectively. Using eKYC tools, banks may improve customer satisfaction and speed up the process of getting customers ready to transact, save, or trade.
Least operational and fraud risks compared to the conventional KYC method:
Many KYC processes can be automated thanks to technology like artificial intelligence and machine learning as opposed to manual human input. The technologies allow for the simultaneous and real-time execution of several eKYC tests. Biometric identification can assist in lowering the danger of hacks, fraud, money laundering, and financing for terrorism.
This procedure is active every day of the year, 365 days a year. It has the ability to automatically check accounts to see whether a user is acting oddly. Since there is no longer opportunity for human error when keying and re-keying the same information from various systems, security risks will also be reduced, aiding banks in lowering operational, fraud, and money-laundering risks associated with the digital onboarding processes. Increased trust in the provider of financial services is most likely a result of this.
Document and information loss are prevented through e-KYC verification:
The e-KYC due diligence method does away with the requirement for physical document management because it is a paperless process. For ESG, this is excellent. In essence, it indicates that traditional banks can now lessen their carbon footprint by taking environmental impact into account when making business decisions. Additionally, e-KYC uses cutting-edge cloud-based technology to collect, examine, and secure client data in order to guarantee the privacy and prevent data loss. E-KYC addresses the issue of paper overload by lowering the amount of paper used. It also lowers the overall expenses associated with KYC compliance.
It enhances customer experience, saves time, and lowers friction.
When working with customers, you must put their experience first to keep them from giving up. The Signicat survey claims that nearly 2 in 3 customers abandon bank onboarding procedures. Because they are challenging, time-consuming, and require too much personal information. This demonstrates how having a bad onboarding experience may hurt your brand.
Customers can confirm their identity online by using e-KYC in place of banks’ traditional KYC procedures during the digital onboarding process. If a paper-based identity is not required, the faster and simpler verification process increases the likelihood that customers will purchase further services. Additionally, e-KYC assists bank employees in providing customer service in a quicker, more accurate, and more effective manner.
Fintech’s use of automation and digitization to change things has given the BFSI sector many new prospects. Digital banks will become more nimble and be able to provide instantaneous onboarding experiences to their customers by implementing e-KYC products in their process. The business will greatly benefit from being able to meet its financial requirements more quickly.
Overall, digital banking should take into account user-friendly KYC options that can enhance the onboarding process.
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