Financial institutions are experiencing a rapid evolution of compliance requirements. In the current economic environment, the need for banks to develop best practices that address their distinctive business needs while ensuring compliance across dominion has never been greater. Regulatory units are struggling to balance the necessity to satisfy their customers and the tedious obligations coupled with stringent KYC processes.  The importance of creating a digital banking environment that can facilitate non-compliance risk reduction and satisfy customer needs cannot be stretched.

Meanwhile, consumers expect a digital experience across all channels; hence businesses unable to adapt risk losing clients to more adaptable competitors. The moment has arrived for digital customer onboarding solutions to be trusted by financial enterprises. Furthermore, financial institutions acknowledge that digitalization has become an essential part of their consumers' everyday life. Digital KYC has become a critical launching pad for earning the trust of tech-savvy consumers; since firms can execute marketing promises into truths and have a digital omnipresence with a snappy and quick customer onboarding procedure.

Things to keep in mind when opting for digital KYC:


The application of digital technology has the potential to bring banking to billions of unbanked customers and millions of enterprises worldwide, significantly boosting the banking sector. Digital KYC enables users to create a bank account or register to a digital wallet or payment service remotely from their home using a digital channel such as a mobile phone. Customers have more security to transfer funds, print financial statements, get reasonable rates, and set up automated bill payments since they can access their accounts 24/7.

According to the World Bank's most recent study, approximately 1.7 billion individuals worldwide are unbanked, and over 200 million small and medium-sized companies lack access to financial services. Digital KYC can make banking accessible using biometrics to those with poor literacy, without ID or credit history, and economic means in remote locations. Technology makes it easier to circumvent financial hurdles, particularly in emerging markets such as China, Brazil, India, and Columbia.


In today’s age of digitization, customers desire a seamless digital banking experience. They anticipate the simplicity of executing all digital KYC procedures through digital channels and the speed of near-instant acceptance. Using digital identity verification technology and powerful machine-learning algorithms, the bank can instantly assess whether the ID is an actual, government-issued identification or a fake. Customers can also use their smartphone cameras to take photos. The bank can authenticate that a customer is genuine and that the individual in the snapshot matches the person represented on the ID using automatic facial comparison technologies. All of this is accomplished in the blink of an eye and without requiring the consumer to leave their house.


Digital KYC validation decreases the amount of paperwork needed and the effort and time required to authenticate a customer's KYC credentials. By virtually eliminating the risk of human error, these factors significantly reduce NBFC onboarding costs. Video KYC has the added benefit of being entirely remote, which is a significant advantage in gaining scalability. As a result, it has emerged as a critical factor in the success of financial initiatives for financial inclusion, as it provides a comparatively cheaper way for compliance even in remote locations.

Frictionless onboarding Process:

One of the most critical aspects of the customer-bank relationship is flawless onboarding. However, according to the latest industry reports, 63% of consumers sidelined digital bank applications in 2020 owing to ineffective onboarding procedures. Customers no longer prefer time-consuming, complex KYC procedures; instead, they favor a rapid and convenient onboarding experience. This will only be possible if companies have a quality, secure, and helpful engagement procedure. Automation of manual processes, such as scanning client data and transaction records to establish the kind of automated identification, plays a significant role in optimizing onboarding.

Focus on User Experience:

A successful Know Your Customer (KYC) strategy and procedures in the financial sector are inextricably linked with seamless onboarding processes, minimal designs, and navigation apps. An onboarding process with too many questions compromises the user experience. Therefore, delight your customers with a hassle-free KYC experience that enables rapid product onboarding. Utilize KYC data more effectively to understand customer needs and deliver tailored service. Chatbots assist in addressing consumer inquiries and concerns and improving the user experience. On the other hand, humanizing a chatbot may be as easy as incorporating components that give consumers the notion that they are interacting with a person on the other end, increasing user experience and efficiency.

The growing rigidity of KYC regulations in the wake of large-scale data breaches requires banks to immediately look for new identity verification solutions. Banks can leverage digital technologies to provide consumers with seamless digital experiences for digital ID document authentication, biometric verification, geo-location, and carrier network data to establish strong identity assurance. Banks can be assured that their new clients are who they claim to be using verified digital IDs. Additionally, they can reduce fraud risk and enroll more new customers through a lower-cost, self-service channel, leading to higher top-line growth. Banks can fulfil today's customer expectations, reinstate trust in digital channels, and get off to a solid start in the transition to digital banking by delivering a streamlined, swift digital identity verification procedure.