Will the new offline KYC rules really ease Fintech’s pain?
Date Published
Unlikely!
While the Economic Times article on the subject strikes an optimistic tone, it’s unlikely that the new offline KYC rules issued by the RBI, allowing Fintechs offline Aadhaar KYC options, will make customer onboarding much simpler.According to the new rules, Fintechs can access the Aadhaar database for customer KYC using any of the offline methods including QR-codes and XML-based processes. (To understand how Aadhaar XML works, we have a great eBook that explains its workings in detail.)As Wriju Ray, co-founder and CBO at IDfy, said to ET,”Offline Aadhaar can never be equivalent to Aadhaar authentication in the eyes of the regulator. Regulated entities can either complete a physical KYC through Aadhaar or conduct an OTP-based authentication, which has limited validity and is currently only allowed for banks.”Sunil Kulkarni, Joint MD at digital payments company Oxigen, points out to how the offline methods are more complex than Aadhaar eKYC and, hence, may be difficult to scale.
Digital KYC solutions that combine ID authentication and face recognition technologies provide Fintechs with the same level of efficiency and accuracy that Aadhaar eKYC did.
Video KYC, in fact, is a very efficient way of onboarding remote customers. For the cost and customer experience benefits it offers, Video KYC may end up winning the Digital KYC race once it gets a complete sanction from regulators.
To know more about IDfy’s Digital KYC and Video KYC solutions, write to shivani@idfy.com
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