How video-based KYC can benefit policyholders | Economic Times

Banks and mutual fund houses have been allowing their customers to complete their KYC process via video facility for a while now. And soon, even those looking to buy insurance policies can complete their Know Your Customer (KYC) process via the video route.The Insurance Regulatory and Development Authority of India (IRDAI) announced recently that it will soon allow insurance companies to use real-time video-based authentication methods to vet customer credentials for new onboardings.IRDAI's circular issued on August 24, 2020, states, "Video Based Identification Process (VBIP) is a method of customer identification by a representative of the insurer by undertaking seamless, secure, real-time, consent based audio-visual interaction with the customer to obtain identification information including the documents required for Customer Due Diligence purpose and to ascertain the veracity of the information furnished by the customer. Such process shall be treated as face-to-face process."Here is a look at how it will work and how it will benefit policyholders.How the process will workIRDAI has stated the following VBIB process for insurers The authorised person of the Insurer performing the VBIP for KYC shall record video as well as capture live photograph of the customer present for identification and obtain the identification information as below:Insurers can use offline verification of Aadhaar for identification, if voluntarily submitted by the customer or they may also perform OTP based Aadhaar e-KYC authentication if voluntarily submitted by the customer, subject to notification by the government under Section 11 A of Prevention of Money Laundering Act (PMLA).The insurer shall ensure that the video is clear and the customer in the video shall be easily recognisable and shall not be covering their face in any manner.IRDAI said, "Live location of the customer (Geotagging) shall be captured to ensure that customer is physically present in India. Also, insurers should ensure that the video recording bears the date and time stamp, which has to be stored in a safe and secure manner as per PML Rules."Insurer shall ensure that photograph of the customer in the Aadhaar matches with the customer undertaking the VBIP and the identification details in Aadhaar shall match with the details provided by the customer.Insurer shall ensure that the sequence and/or type of questions during video interactions are varied in order to establish that the interactions are real-time and not pre-recorded.All accounts opened through VBIP shall be made operational only after being subject to concurrent audit/ underwriting/ verification, to ensure the integrity of process.Insurers shall ensure that the process is a seamless, real-time, secured, end-to-end encrypted audio-visual interaction with the customer and the quality of the communication is adequate to allow identification of the customer beyond doubt. Insurers shall carry out the liveliness check in order to guard against spoofing and such other fraudulent manipulations.To ensure security, robustness and end to end encryption, the insurers shall carry out software and security audit and validation of the VBIP application before rolling it out, IRDAI said.How it will benefit policyholders?Online video KYC will not only help smoothen and expedite the entire process of buying an insurance policy, but it will also help authenticate the documents and the information provided on a real-time basis.Insurance agents can avoid making multiple visits to the customer using this KYC method. Besides, even customers do not have to visit the insurance office to buy policies. They can get life, health or any other type of insurance policies in electronic form by giving their consent to the insurer via a one-time-password (OTP), without using a wet signature on the hard copy of the proposal form."The video needs to be clear and without a face mask/cover such that the applicant can be clearly identified and the same needs to be done from the advisor's registered mobile number with live tracking of the person on Google Maps. This would surely help reduce frauds as real-time live videos would be recorded and then reproduced whenever needed," Dhirendra Mahyavanshi, Co-Founder, Turtlemint, an insurtech firm.Mahyavanshi added, "With the advent of technology, video KYC can now be implemented everywhere without compromising on personal safety or overruling the social distancing norms for the current pandemic."