Know Your Customer (KYC) is the process of verifying identity of customers within the ambit of the prevention of money laundering laws. The objective of KYC is to protect businesses from being used for criminal activities. KYC processes are employed by companies, banks, insurers, export creditors, telecom and other financial institutions to ascertain the true identity of customers. Initially, this requirement was more applicable to financial industry dealing with money but now the requirement is expanded to include almost all the industries and sectors. E-KYC is verifying identity of customers electronically.
KYC process broadly involves:
Companies/financial institutions formulate KYC policies with the key elements of:
Earlier, banks, telecom, and other financial services providers were seeking photocopies of the customer’s original identity proof for performing KYC verification. In an attempt to reduce the ever-increasing regulatory burden and compliance cost, financial service providers have started using Aadhaar e-KYC to verify Indian consumers. There are various advantages to financial institutions in using e-KYC:
The e-KYC is an API-based solution where KYC is done electronically permitting service providers to identify customers electronically. E-KYC service is completely electronic, paperless, and secure and facilitates speedier transactions. E-KYC is also expected to lower the threat of identity misuse while eliminating document forgery. Moreover, the use of digital signatures and encryption mitigates chances of tampering with the customer’s information and customers can also avoid the endless paperwork, and both the service providers and customers can save on paper costs. Further, the information is stored electronically and can be used for audit also. E-KYC process is error free due to lack of human intervention.
At ProInd, we are constantly in the pursuit to make business tasks easier and simpler for our customers by providing IT enabled services for business needs by designing tools and software. We understand that KYC Services is a core component all corporate as well as service providers. As such our organization also provides E-KYC assistance to customers, ensuring entity data, document collection, tax profile validation, regulatory protocols and self-declarations etc. and is the right partner to ensure that the data is complete, accurate and up-to-date.