Identity verification is essential in the digital era, especially for financial or transaction-oriented services. It is said that a lot of paperwork and physical verifications make the traditional “Know Your Customer”(KYC) difficult. But when eKYC Online was introduced, it was just the opposite. So, what is eKYC? Let’s explore through the blog and understand electronic KYC, its importance, benefits, and how it works.

What is eKYC?

eKYC, or electronic Know Your Customer, is the digital version of the traditional KYC process. It leverages technology to verify the identity of customers quickly and efficiently, eliminating the need for physical documentation and in-person verification. By adopting eKYC Online, companies can ensure a seamless onboarding process for their clients while maintaining compliance with regulatory standards.

How Does the eKYC Process Work?

The eKYC process goes through several steps to establish a customer’s identity. An illustrative example of how to do eKYC is depicted below:

  1. Customer Initiated: This is when a customer visits a service provider’s digital touchpoint via a website, mobile app, or other means and starts the eKYC process
  2. Submitted Documents: The customer uploads soft copies of the required ID documents, e.g., Aadhaar, PAN Card, Passport, etc.
  3. Biometric Verification: Some services may require the system to request biometric verification through fingerprinting or face recognition
  4. OTP Verification: OTP will be sent to the registered customer’s mobile number for verification
  5. Data Validation: The system shall validate received data based on applicable databases
  6. Completion: A message from the merchant that eKYC verification has been completed successfully

Benefits of eKYC

The benefits of eKYC are manifold, making it a preferred choice for many organisations:

  1. eKYC systems are more dynamic, making the whole process much easier and faster than conventional ones. What used to take several days or even weeks now happens within minutes.
  2. A customer can do KYC without visiting a branch for verification.
  3. e-KYC reduces the resources employed to uncover paper evidence and various other costs in terms of intellectual and physical labour.
  4. This means that digital verification systems are generally more secure than others, as they reduce or eliminate cases of identity theft and data breach.
  5. e-KYC is a paperless KYC solution for many environment related problems, avoiding using paper given environmental conservation. 

Documents Required for eKYC

To complete the eKYC process, customers need to provide certain documents. The documents required for eKYC typically include the following:

  1. Aadhaar Card: The Aadhaar card is one of the most commonly used documents for eKYC verification due to its biometric features
  2. PAN Card: The Permanent Account Number (PAN) card is essential for financial transactions and tax-related matters
  3. Passport: A valid passport serves as proof of identity and address
  4. Voter ID: The Voter ID card is another acceptable document for identity verification
  5. Driving License: The driving license is often used as proof of identity and address

eKYC Meaning and Significance

e-KYC stands for Electronic Know Your Customer, which refers to using electronic methods for customer identification. It represents a significant shift towards digital transformation in various industries. Understanding the eKYC meaning is essential for comprehending its broader impact.

How to Do eKYC Online?

Knowing how to do eKYC online can simplify the process for many users. Here’s a brief guide:

  1. Pick a Platform: Select a top-tier financial institution or e-service provider offering e-KYC online services
  2. Register: Sign up for the portal and go to the eKYC section
  3. Upload Documents: Upload the scanned copies and/or photographs of all the mandatory documents required for eKYC
  4. IDENTITY VERIFICATION: Proceed with the biometric or OTP to complete the necessary identity check
  5. Confirm: Your e-KYC verification gets successfully dispatched

The Future of eKYC

The future of eKYC is very bright, with continuous technological flow in the process to enhance and make it more user-friendly. Innovative technologies such as artificial intelligence and blockchain are at the frontiers of providing increased security and efficiency in the eKYC process. Such technologies can potentially improve the user’s identity against any chances of fraud.

Among the processes that would be automated and need to be intensified, another area is secure and efficient identification checks supported by e-KYC. The ongoing escalation of the level of digital transactions vis-a-vis the daily surge of traffic on this path has now made the regulatory authorities appreciate the criticality of digital KYC and are framing guidelines to enable its spread across industries.

Conclusion

eKYC is a rapid, secure digital identity verification for seamless customer onboarding. By eliminating paperwork, it saves time, reduces costs, and enhances security. Understanding eKYC benefits and processes is crucial for individuals and businesses.

FAQs

Can eKYC be used for opening bank accounts?

Yes, banks are opening accounts using the electronic issuance of a Know Your Customer (KYC) form. Most banks and financial institutions use the eKYC system to facilitate account openings. With electronic identification of the client, the bank offers much greater convenience and speed than most instances where new accounts are fully opened electronically without the customer’s physical visit.

What should I do if my eKYC verification fails?

If the eKYC verification fails, the first thing to do is verify the correctness and currency of the information and documents you have presented. The concern is commonly wrong entries, poor scanning of records, and mismatching information. If everything seems right and fails, one can contact the service provider’s customer support. They guide the user on how to rectify the errors for successful eKYC

Can non-residents or foreign nationals complete eKYC in India?

Yes, eKYC can be done for non-residents or foreign nationals in India, provided they have identifiable and acceptable documents. Aadhaar does not apply to foreign nationals; documents like passports are used. Other requirements for foreign nationals will differ from service to service, so it’s essential to always check those requirements with the service provider you may be transacting with