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Transform Digital Customer On-boarding & VideoKYC Experience with AI (Artificial Intelligence)

I remember approaching a large co-operative bank five years ago for opening a new account as I had moved into a new locality and wished for a bank close by so that I could use all the possible services to store my valuables. The first thing that I was asked for was a “personal reference” i.e. somebody who already had an account in that bank and could vouch for me! Now, that was a impossible “demand” since, I hardly knew my neighbour, let alone an “account holder”. Eventually, I approached a much more aggressive retail bank and was relieved to know that there is a possibility to open a bank account based on documentation. Thankfully, this process has become much easier with the advent of “Aadhar Card”.

Account opening is a risky business with tedious steps for banks as well, processes like the authentication of documents to verification of identity, place of stay, KYC norms fulfilment, financial information etc. is critical for safeguarding the banks' integrity. All these time-consuming activities resulted in a long waiting period and follow-ups for customers, basically a bad version of customer experience.

Digitalization has changed the banking paradigm from the physical facility to a mobile phone app, thus pressurizing all the aspects of the “digital experience.” This experience is surely not limited to being user-friendly but has expanded to identifying what the customer wants, suggesting the right fit, and making it available quickly with minimum customer intervention. Banks invest their resources in designing products/services that cater to a variety of their target base, promoting these consume costs in this highly competitive environment. If the process to avail a particular service or product becomes too lengthy or tiresome for a customer, it’s certainly an opportunity loss for the bank. The COVID-19 situation has forced all business verticals to make changes to their customer contact & connect mediums, hence laying a great emphasis on digital channels.

The traditional paper-based account application and on-boarding methods operational in banks may prove to a deterrent as it involves filling up long application forms, verification of identity/address proof documents and background/signature verification which are all done in person, lengthening the time in updating various records and departments. Such operational conditions and uncertain times, where countries are forced into lockdowns highlight a need for change in methodologies; else the impact would be seen on the bottom lines.

Need for the adoption of digital banking process with the introduction of AI

Banks are early technology adopters and when it comes to the concept of “Artificial Intelligence” (AI) they are not far behind in exploiting its benefits. And this can be backed by the fact that we are greeted by “Chatbots” playing relationship officers asking “how can I help you?” on the websites. AI finds its use in the area of compliance, risk management, fraud detection, business process management, and customer services to name a few.

Digital onboarding of customer with Video KYC is a solution that may help banks overcoming the business demands in the banking industry providing start-to-end processing without human touch.

One of the main reasons why customers love going digital is the ease with which one can become a user from a non-user just by using one’s social media login credentials or quick steps of registration. With the growth in digital banking users, banks are realising the need for change in their operations to reduce customer churn rate, improve operational efficiencies and save costs with automation over paper-work at bank branches.

The idea of digital account opening and onboarding can seem to be a simple process where:

  • Prospects download a mobile app or access a website

  • Enter the required personal information

  • Scans and uploads the relevant documents

  • Makes a live video for personal verification and

  • Digitally signs the account opening agreement

  • An account with the bank is created and access granted

Easy digital account opening and customer onboarding with “AI” 

AI technology is revolutionizing the critical areas of “KYC” where the account opening process begins and it’s important for the bank to know the customer’s authenticity and credibility before starting the relationship and AI video-based customer identification process V-CIP capability does that.

Let’s evaluate the components of an AI-driven digital account opening value chain:

  • Data collection: Scanned uploaded documents are read OCR (Optical Character Recognition) which extracts required data and fills ups the application form

  • Information authentication: The system intelligence checks for pre-recorded customer data with various regulatory platforms with APIs which connect to obtain required information to check for discrepancies and satisfy the regulatory compliance directives

  • Auto image capturing: For cross-validating the actual image with all of those on the submitted documents

  • Video-based KYC: To check the liveliness and to validate the photographs submitted as proof of match with the actual applicant

  • Compliance norms verification: Banking is strictly regulated and non-compliance can be a legal pain point for the bankers. Hence real-time check of all compliance processes is a must

  • Approving or denying an application: AI/ML algorithms check the application data against the set risk criteria and make a decision

And the benefits of AI-driven process are:

  • Accuracy of data captured

  • Hassel free onboarding with customer delight

  • Reduced turnaround time

  • Reduced back-office paperwork and worries of human errors

  • Capacity to scale up operations

  • Assured regulatory compliances

Enticing the customer with technology & convenience to avail products and services will surely give a competitive edge to banks. AI technology provides such a window of opportunity as it's not governed by geographical boundaries or necessity for human involvement. Also, banks have an opportunity to capture and build a strong data pool of customers which can be used to cross-sell/ up-sell their offerings. Banks investment on digital account opening and onboarding platform will open doors to the future digital banking initiatives.

Is Digital Customer On-boarding & Digital KYC the future?

Well, definitely yes also, RBI’s progressive move to bring Video KYC (Video Customer Identification Process) 2020, has helped banks and other financial institutes to speed up their customer on-boarding and serve customers instantly. NSEIT, is a major facilitator of Artificial Intelligence based solution as we understand the BFSI industry closely and have been empowering them to be future ready. Check out our other solution and offering and get in touch with us to know more about it.

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