6 reasons why you should use V-CIP for re-KYC

On 9th January 2020,  The Ministry of Finance with a  view to leverage digital channels amended the Master Direction on KYCto allow Banks & regulated entities, various methods to collect a customer’s information electronically.  Under the digital KYC norms, RBI  mandates a video call between the institute and the consumer to establish what is termed as V-CIP (video-based customer identification procedure) for the KYC.

While KYC details are updated when a customer opens an account, as per RBI guidelines, financial institutions should request a Re-KYC at regular intervals to keep their records up-to-date. That is, every 10 years for low-risk customers, every 8 years for medium-risk customers and every 2 years for high-risk customers if there is no change in identity or address.

The reach of V-CIP for Re-KYC was earlier restricted to low-risk customers. Banks havent’ been too keen on easing the re-KYC process, even for their low-risk customers as the still rely on the traditional, physical KYC updation. However, on 5th May 2021, the RBI released a new circular which has put the onus again on banks to adopt V-CIP for periodic KYC updation of their customers.

While we await further details from the RBI to gain more actionable clarity, we’ve rounded up the top 6 benefits of using V-CIP for re-KYC for you:

1. Best-in-class experience for your best customers
   
   Let your low-risk customers complete their Re-KYC from the comfort of their homes or even a remote location using V-CIP. V-CIP is an easy procedure with just a few steps compared to the traditional KYC process. This is what makes it a smooth experience for customers.
   
2. No more queues for Life Certificate submissions
   
   Avoid the queuing of government pensioners at your branches for Life Certificate submissions. Give them the option to submit it over a video call and increase your operational efficiency.
   
3. Let senior citizens take it easy
   
   Senior citizens form a significant chunk of your low-risk customers. Allow them to complete their KYC updation from the comfort of their homes without the hassle of physical branch visits.   
   
4. Proactive fraud prevention 
   
   Traditional-KYC is vulnerable to fraud, with many examples of customers using fake or appropriated identities to avail financial services like loans. With V-CIP, the financial institution has complete control over the verification process, from start to end. This eliminates the misuse of pension funds by fraudsters using Jeevan Pramaan/ Digital Life Certificate.
   
5. No more chasing rural customers 
   
   A lot of rural customers open accounts just for claiming government subsidies . It is very expensive & operationally challenging to follow up with these clients  manually, However, V-CIP allows a  low-cost and effective process to reach out to these dormant account holders over a simple video call.
     
6. Champion the distanced world
   
   With restrictions on physical interactions due to the pandemic, V-CIP ensures the safety of customers and employees by enabling virtual face-to-face interactions.

Therefore, it is clear that V-CIP is ushering in a new system of KYC authentication that is quicker, more reliable, and more seamless for financial institutions and customers alike. 

Please email us on shivani@idfy.com to know how IDfy’s video KYC platform can help you digitise your re-KYC process.