Understanding e-KYC and 5 Key Benefits for Banking Institutions

Understanding e-KYC and 5 Key Benefits for Banking Institutions

‍

In the banking world, there has been a significant development concerning customers, namely Know Your Customer (KYC). This is the best and wisest way for banking institutions to understand the characteristics and activities of customers. Over time, and with the rapid advancement of financial technology, e-KYC is the latest policy that is quite effective in monitoring customers. This is necessary for banking institutions to ensure the security of transactions from each customer.

‍

Currently, many activities are carried out by customers online. Everything related to transactions, whether goods or services, is done solely through mobile screens. Therefore, when banking institutions require verification from customers, it is certainly not something complicated. This is due to the fact that customers frequently monitor information from their mobile phones.

‍

So, what is e-KYC, its advantages, and its benefits for the financial industry? Read this article carefully to understand it easily.

‍

‍

What is E-KYC

‍

In general, there is not much significant difference between conventional KYC and e-KYC. The difference lies only in the electronic system. So, e-KYC is a process to identify and verify the activities of each customer electronically.

‍

To verify customers, banking institutions need to have a license called the Unique Identification Authority of India (UIDAI). This license is used by banking institutions to access e-KYC. However, banking institutions must obtain approval from the government as it is related to security regulations.

‍

‍

Advantages and Benefits of E-KYC

‍

After understanding that e-KYC is an important policy for banking institutions, you need to know what the advantages of e-KYC are:‍

‍

1. Real-Time‍

One of the advantages of e-KYC is its real-time nature. This means that the data held by banking institutions can be verified online and can be approved immediately. This cannot be done if manual KYC is still used. Verification will take days or even weeks.

‍

2. Easy to Acquire New Customers‍

The second advantage of e-KYC is that it is easier to acquire new customers. This would be complicated if conventional KYC were still used. The digital process makes it easier to attract sympathy and recruit new customers.

‍

Referring to data from The Digital Banking Report (2019), it will be found that customers prefer the registration or data verification process to be quick. This means that if it can be done in real-time, customers will easily accept it.

3. Reducing Theft‍

One thing to realize about e-KYC is its ability to reduce theft. As times are advancing, so is information technology. Theft and data laundering can occur anywhere and anytime. Therefore, security guarantees are needed to prevent these things from happening.

‍

Therefore, authentication processes become important for banking institutions. Odd behaviors can be prevented with other customer behaviors such as fingerprinting, facial detection, and scanning certain codes.

‍

4. Improving Customer Experience‍

Digitalization brings many changes in various sectors, including banking institutions. If a new customer wants to register at a banking institution, the first hope is that the process will not take a long time. They will certainly switch to another place if the verification process takes more than a day or even days.

‍

To overcome this, e-KYC is the right choice to solve problems in banking institutions. If digitalization has been applied in banking institutions, this will be a good reference for new customers.

‍

5. Faster and Neater Service‍

The fifth advantage that you can understand from e-KYC is how services can be faster and neater. This will certainly not be found when conventional KYC is still used.

‍

Therefore, when they try to verify data, they will make phone calls or even more often, video calls. This method is considered efficient because it does not require large costs, it is faster, and neater. The latter is because records or data are neatly stored in the system.

‍

‍

When you understand the definition, benefits, and advantages of e-KYC, you can apply for a loan to start a business.

‍

If you work in a financial institution, implement Brick verification solutions to make the e-KYC process faster and more convenient for users. ***