Thursday, June 18, 2020

How new Aadhaar-based eKYC help in seamless on-boarding of customers?

From opening accounts in a bank/NBFC, taking loans to make investments in a share market/mutual funds investment, KYC (Know Your Customer) is one of the important steps to onboard a customer/investor. This is also necessary for making payments, providing services to customers and for various transactions. The KYC services that take place today involves a lot of documentation and the process is quite complicated.

On the 26th of May 2020, the Bombay Stock Exchange commonly referred to as the BSE launched Aadhaar based e-KYC services on its platform for Mutual Funds. Video KYC based services are also being used by the BSE for the onboarding of new customers. Customer onboarding based on Aadhaar eKYC makes the entire process smooth and effortless. 

  • BSE will be providing Aadhaar eKYC and video-based KYC services to the stock-brokers and other intermediaries that are approved in the coming days/months.
  • KYC process will be much simpler.
  • Turnaround Time (TAT) for complete verification will be improved.
  • The Stock Exchange will issue API's (Application Programming Interface) to the intermediaries and stock-brokers to get their IT systems connected to the eKYC base of the BSE.
  • Only then can the Stock-brokers get access to this facility.

Benefits Of Aadhaar Based e-KYC Services

Aadhaar is currently the largest biometric database in the world. More than 98% of the population in India is enrolled with the UIDAI. The Aadhaar card issued by the UIDAI (Unique Identification Authority of India) contains a unique number for identification. This also contains the demographic information and the biometric details of the individual.

The Aadhaar based eKYC is carried out through the process of Aadhaar authentication. In this process, the identity of an individual is confirmed through OTP/biometric authorizations by using the information stored on the Aadhaar database. Some of the major benefits of Aadhaar based eKYC services include the following,

  • The process of onboarding is paperless.
  • The time for onboarding new customers/investors and opening new accounts in banks/financial agencies has been reduced to a few minutes from several days.
  • Can open new accounts in banks operating in a rural area as well as areas that do not have a bank.
  • Each individual’s information on identity can be collected in real-time.
  • This is done using the API’s, original data, and advanced levels of technology.
  • Manual processes are no longer necessary.

Sticking to the regulations put forth by the SEBI (The Securities and Exchange Board of India) the BSE has started carrying out eKYC based on Aadhaar and Video-based KYC. Hence, the seamless onboarding of investors has now become possible. The important features of the e-KYC solution provided by the BSE include the following,

  • Website is user-friendly.
  • Mobile interface to connect the various participants in the mutual funds' sector.
  • The KYC (Know Your Customer) documents will be verified digitally.
  • The process of verification is done in consolidation with the KYC Registration Agency (KRA) systems.
  • Approval in real-time for investors/customers once the documents/ID’s has been verified successfully.
  • Better operational efficiency with this superior systems.
  • Minimal human efforts, fewer chances of error and amount of time consumed.
  • This will, in turn, reduce the cost of acquisition of a customer/investor.

The launch of Aadhaar based e-KYC services has come as a blessing to investors and distributors. Earlier, KYC had to be done physically, involved a lot of paperwork. Now the process can be completed within a matter of minutes and get their approval in real-time.

For more information contact us.
We, Finahub, are experts in Aadhaar related products and services like eSign, eKYC, Authentication, etc. If you want to know how your enterprise can start using it, please give us a call  @ 0484 2388285 or email us at [email protected]