Video KYC- The Game-Changing for the Non-Banking Sector

Today, it's not only the banking and finance sector is going to digital but each industry is also
undergoing the digital transformation. You can easily take a car on rent, house booked and the loan
is taken. The common necessity for each pursuit is verifying that the person is exactly who they say
they are. With the help of a remote identification service, a single button click can easily
authenticate the user. Now, the KYC process is going to be digital for the end-user due to the
workflow.
The Need
With the COVID-19 pandemic forcing everyone into their homes, there is a growing need for an
efficient, cost-cutting paperless system. A system where the person seeking the service never has to
come in contact with the organization providing it.
The problem NBFCs are Facing
Due to the privacy judgment by the Supreme Court, Non-Banking Financial Companies (NBFCs) are
not mandated to use Aadhaar eKYC as a means to simplify onboarding. This creates a gap for a
simple, secure, and compliant solution.
The Precedent
On 9 January 2020, the Reserve Bank of India (RBI) approved Aadhaar-based video authentication as
an alternative to e-KYC. Now banks and other lending institutions regulated by the RBI can adopt a
Video-based Customer Identification Process (V-CIP). It is a consent-based alternative method of
identity verification for customer onboarding.
The amendment to the KYC norms are a great way to push digital financial inclusion. The benefits of
VideoKYC for banks are often discussed. But, what many fail to see is the future VideoKYC holds for
non-bank institutions.
Non-banks, whether performing a financial function or not, can adopt VideoKYC as a solution to all
their onboarding challenges. This blog will discuss the different industries that can adopt VideoKYC.
It will also delve into the regulatory paths that exist, and those that can be potentially created to
include NBFCs and non-financial institutions in the VideoKYC revolution.
The Potential Paths
Video KYC can fill in the gap of a simple, secure, and compliant solution for NBFCs. It is also useful to
various non-financial institutions. It boils down providing a faster solution for all those sectors that
erstwhile used electronic form filling.
RBI is the regulator of banking in India. Currently, different bodies regulate different finance related
aspects carried out by non-banks. The future can only hold one of two options:
1. The potential of non-bank financial institutions regulated by the RBI
2. The current situation of non-banks not regulated by the RBI but other specific authorities
Either way, VideoKYC can be freely used by the following without any regulatory roadblocks:

Regulated Non-Bank Institutions
The following 4 functions are financial in nature and the non-bank institutions performing them are
currently regulated by different authorities.
Asset Management Companies (Regulated by the Securities and Exchange Board of India): The
VideoKYC onboarding customer journey allows full KYC, AML/CFT and authentication resulting in
significant reduction of costs. Apart from individuals, it can also be beneficial to onboard nonindividuals
such as SMEs. The solution eliminates back and forth to reduce onboarding time.
Insurance (Regulated by the Insurance Regulatory and Development Authority): Technologies such
as a livliness check and digital fraud detection enable an enhanced user experience and reduces
digital risk in the insurance arena.
Lending: Using video KYC for the SME lending process can result in faster decision making and
improved user experience. It can also be used for other forms of lending by NBFCs such as individual
retail lending.
Payments: KYC had been a primary barrier for mobile wallet companies who were relying on
Aadhaar to onboard customers. They had to resort to cumbersome traditional processes. Video KYC
can streamline the clunkiness of this experience.
Non Financial institutions
Telecom industry: Authentication of a user is imperative to be issued a SIM card. Till now a physical
visit to the service provider was mandatory to activate the SIM card. With the safe, contactless
option of VideoKYC now in existence, the telecom industry should switch to this method of
verification.
Rental/shared vehicle economy: Players like Ola Money which had a firm base of users using their
wallet to pay for cab rides, had to perform the full KYC ritual to keep their accounts operational
when eKYC was banned. With RBI accepting Video KYC as a potential alternative for digital KYC in
2020, Signzy’s Video KYC technology has the potential to provide the solution.
Co-working spaces: Co-working spaces have been cropping up in the past few years. For the safety
of all those working under one roof, KYC is done. Like any other long-drawn out process, VideoKYC
can help reduce the time it takes to begin working from one’s new work place.
Co-living and accomodation rentals: Driven mainly by urbanisation, the lack of affordable housing
and technological innovation, co-living is gaining popularity. Documents may take time to be verified
due to obstacles like blurred images or the possibility of forgery. A trustable solution must be used
for the peace of mind of all tenants and VideoKYC is the best solution in the foreseeable future.
Consumer goods rentals: Rental companies also follow the same approach where the owner never
meets the buyer. In order to authenticate users, KYC collection and verification is a must. But
traditional forms of KYC collection can be cumbersome and require a lot of manpower, time and
infrastructure. Just like every other paragraph in this blog, we cannot stress enough how much
easier VideoKYC can make this.

Educational platforms & exams: Although not used as widely as other sectors yet, with
homeschooling now a forced practical reality for many students worldwide, VideoKYC can be used to
onboard students to a new platform for learning. It can prevent cheating in competitive exams
ensuring the person taking the exam isn’t someone else.
Gaming: Cybersecurity and fraud are a huge concern for the gaming world. With money at stake,
KYC is important to detect and shut down fake accounts and fraudsters.
Dating and matrimonial sites: Trust is the foundation of any relationship or marriage. To get to that
stage the user must trust the platform they are using to find their significant other. VideoKYC can
ensure all suitors are exactly who they claim to be online.
But, why exactly are we calling Video KYC the future? You can find out through this blog.
Whether you are a bank or a non-bank, VideoKYC provides solutions for any industry. Signzy’s
VideoKYC solution has matured over dialects, browsers and low-internet scenarios. Use our new-age
trust protocol to improve customer experience, cut down costs, and simplify onboarding. It will soon
become a multi-industry standard. Adopt it to stay ahead of the curve.
Source: https://blog.signzy.com/how-video-kyc-can-be-game-changing-for-the-non-bankingsector-8c5c997869fe