With the pandemic shutting down most businesses and industries, every sector was hit severely. The insurance market, one of the key parts of the financial sector, also went through the same fate. To make these sectors active again, especially the ones related to finance, the Reserve Bank of India, the Insurance Regulatory and Development Authority of India, and various other governing bodies introduced new guidelines. These included the revision of the traditional KYC methods, while also introducing new solutions like video KYC in India for all these sectors.
Video KYC was implemented because it solved the limitations posed by the traditional KYC operations during the pandemic. The limitations were as follows:
- Carrying offline documents for submission had become risky during the pandemic. Moreover, the use of offline documents also made it easy for the user's information to get leaked. It is because these could be easily accessed by others.
- Unlike video KYC in India, the manual KYC process was more prone to human error. Thus, if the process got rejected due to some error, the user had to visit the respective office again for verification. This not only wasted a lot of time but also degraded the onboarding experience of the customer.
- The manual KYC process was time-taking and also quite expensive since a lot of manpower was required for the KYC application processing and verification. contrary to this, video KYC verification is a faster, more accurate, and cost-effective method for processing KYC applications.
- People from rural and remote areas found it harder to travel large distances for KYC verification and updates. On the other hand, video KYC in India allows everyone to complete the verification process from their homes.
Benefits That Video KYC Can Bring To The Insurance Market
The insurance sector can flourish a lot with the implementation of video KYC verification. The benefits that it provides are:
- Video KYC tools comply with all the guidelines made by the RBI, IRDAI, and other governmental bodies. Thus it prioritizes the security of users' data and has various measures in place to prevent its leakage to unauthorized parties.
- The video KYC verification process is assisted by AI-enabled features that can accept and authenticate the details, photos of the user, and their documents. These tools are activated during the ongoing video KYC process and work in real-time. Thus there is almost no risk of the process being completed by bots.
- Video KYC solutions have also been optimized to operate in low-bandwidth situations. It prevents the video KYC process from dropping off or getting cut in the middle. Thus there is a high success rate of applications being authenticated and completed in a small time frame.
- The video KYC process is made more secure with the help of human supervision. The customer has to book an appointment with the officials beforehand. At the allotted time, an executive is present during the video KYC procedure to answer the customer's queries, while also supervising the process. This further minimizes the occurrence of errors during the process.
- The customer is notified about the documents and other details that they need to submit before the video KYC process starts. This helps them to be ready with everything even before the verification process starts. Even if there is a mistake, the customer can easily resubmit the document as everything is done online.
- Video KYC solutions use the public governmental databases to authenticate the details provided by the customer. This is also done in real-time and the customer receives a notification through mail or message when the process is completed.
These are the benefits that video KYC solutions can introduce into the insurance market. It can make things simplified and easier for the customers to use.