The Reserve Bank of India (RBI) has taken a great initiative to retire the traditional paper-based KYC method for customer identification and digitalize the KYC process for the lending and non-lending ecosystem.
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The Reserve Bank of India (RBI) has taken a great initiative in the transformation of the traditional paper-based KYC method for customer identification and digitalization of the KYC process for the lending and non-lending ecosystem.
RBI has mandated all the banks, lending startups, and non-banking financial institutions to identify cyber frauds and money laundering by authorizing remote customer on-boarding through a video call. This is also known as Video KYC, Digital KYC, or Video-based Customer Identification Process (V-CIP). Though it is primarily devised with the lending ecosystem in mind, we believe the application is going to have use cases across industries. Now, the customers can update or complete their KYC process completely online and continue to use the lending service. Considering the current pandemic scenario, going digital is the only way of life.
Let’s understand more about this new way of life and why it is necessary to adapt to it. According to the latest update in RBI regulation regarding the Video - KYC process, the onboarding platform must be an on-premise solution. And this latest update has raised a challenge for the institutions that have already implemented the digital KYC process. Institutions will have to redesign the architecture of their cloud-based solution or turn to other on-premise solutions to comply with the update.
There are a few solutions available in the market for video KYC. One such solution developed by Pixl.ai is called Pixl Video KYC Solution. The solution is RBI regulatory-compliant with the latest guidelines and accelerates customer onboarding and verification for businesses. Both lending and non-lending institutes can configure and integrate video calls directly into applications and workflow. Our solution is a complete on-premises solution with the customer authentication and verifications are exercised while the customer onboarding. Our AI-driven platform and algorithm facilitate geo-tagging, customer face identification, customer liveness check and customer ID collection in real-time through secured video.
The solution is mainly built on 5 technologies:
- GeoLocation – To trace the customer’s location
- Artificial intelligence and OCR – To facilitate facial recognition and document verification.
- Cloud Storage & Services – To provide an encrypted connection, centralized, and secured storage for the recorded video KYC.
- PAN Verification
- Realtime Face Identification
Here are some latest guidelines from RBI about the On-premise data storage
- The RE should have complied with the RBI guidelines on minimum baseline cybersecurity and resilience framework for banks, as updated from time to time as well as other general guidelines on IT risks. The technology infrastructure should be housed in the own premises of the RE and the V-CIP connection and interaction shall necessarily originate from its own secured network domain. Any technology-related outsourcing for the process should be compliant with relevant RBI guidelines.
- The RE shall ensure end-to-end encryption of data between the customer device and the hosting point of the V-CIP application, as per appropriate encryption standards. The customer consent should be recorded in an auditable and alteration-proof manner.
- The V-CIP infrastructure/application should be capable of preventing the connection from IP addresses outside India or from spoofed IP addresses.
- The video recordings should contain the live GPS coordinates (geotagging) of the customer undertaking the V-CIP and date-time stamp. The quality of the live video in the V-CIP shall be adequate to allow identification of the customer beyond doubt.
- The application shall have components with face liveness/spoof detection as well as face-matching technology with a high degree of accuracy, even though the ultimate responsibility of any customer identification rests with the RE. Appropriate artificial intelligence (AI) technology can be used to ensure that the V-CIP is robust.
- Based on the experience of detected/attempted / 'near-miss' cases of forged identity, the technology infrastructure including application software as well as workflows shall be regularly upgraded. Any detected case of forged identity through V-CIP shall be reported as a cybersecurity event under extant regulatory guidelines.
- The V-CIP infrastructure shall undergo necessary tests such as Vulnerability Assessment, Penetration Testing, and a Security Audit to ensure its robustness and end-to-end encryption capabilities. Any critical gap reported under this process shall be mitigated before rolling out its implementation. Such tests should be conducted by suitably accredited agencies as prescribed by RBI. Such tests should also be carried out periodically in conformance to internal/regulatory guidelines.
Ultimately, a simple, easy, and agile vKYC solution is available as per the customer’s desired date and time. And the business can speed up customer onboarding remotely.
From initiating the video KYC call to complete approval, it just takes five steps:
- Getting Customer Consent
- Checking Customer Location
- Checking Liveness
- Capturing And Validating Identity Proof
- Capturing And Matching Customer Face