As per the government rule, to purchase any financial services, SIM card, or utilities like gas, consumers need to provide their documents as proof of their identity, DOB, address, contact, gender, etc. to the company with Know Your Customer verification process.
However, it has been noticed that this process takes a lot of time and effort to complete. Thus, to simplify all these complications, the government has introduced the eKYC process.
Unique Identification Authority of India or UIDAI provides this Aadhar-based Know Your Customer process that allows individuals to share their credentials to avail services instantly. Due to central processing, service providers can access digitally stored data immediately. Thus, both customers and service providers are facilitated by this service.
Following is a list of the advantages that this electronic process provides –
- Zero paperwork
To purchase a new SIM connection or to avail financial services, customers always require to fill application forms and submit hard copies of KYC documents to verify their credentials.
With the introduction of the electronic Know Your Customer process, individuals don’t need to submit any documents. This paper-less system enables the entire country to cut down its carbon footprints by opting for an environment-friendly process.
Moreover, this cloud-based document management system is also cost-effective as it eliminates the use of paper.
- Consent based system
Through the eKYC system, service providers can avail the data to verify applicants’ credentials only after the request is approved by biometric or OTP verification. This makes it a consent-based system that protects the privacy of individuals who are opting for this process.
- Effort and time-efficient
Contrary to the paper-based verification system that used to take a week-long time, electronic Know You Customer can verify the data within a few minutes. Moreover, due to its automotive procedure, substantial information can be managed and accessed efficiently without any manual help.
- Anti-fraudulent process
To avail the required information about applicants, service providers need to send requests to UIDAI. Once, the authority body receives consent from the concerned applicant, it sends a tamper-proof digital version of data. This eliminates the chance of data manipulation and digital fraud while availing any kind of financial services like a credit card, insurance policies, loans, etc.
- IT Act compliance
As authenticated by digital signature and encryption facility, the digital format of documents are considered as legal as per the Information Technology Act, 2000. Any case of identity theft related to electronic Know Your Customer process is punishable according to the Indian constitution.
All regulatory bodies like RBI, SEBI, IRDA, and PFRDA have already acknowledged this digital medium of data transfer. Through an authorized portal, these regulatory organizations can audit and access the information requests of service providers.
How to update KYC?
To avail of all these benefits, individuals need to update their KYC by visiting the branch or website of their preferred financial institutions. By submitting all necessary documents, In Person Verification and digital signature, applicants can update their electronic Know Your Customer process.
KYC documents are essential without which financiers can’t approve any credit card or loan application; such rejections can affect an applicant’s credit score. Hence, it is important to know the reasons why credit card applications can be rejected beforehand.
In India, as per RBI, all reputed financial companies have started accepting this system to cut down money laundering and data tampering. However, financial frauds involving credit cards are still prevalent, and individuals should know how to avoid them.
Individuals also need to monitor their accounts regularly as well as use their credit cards wisely to avoid scams and identity theft.
Few credit cards come with features like in-hand security and zero fraud liability cover. An exceptional example of such cards is the Bajaj Finserv RBL Bank SuperCard.
Moreover, this financier also brings pre-approved offers that make the approval process of credits hassle-free. Other than credit cards, these offers are also available on different financial products like personal loans, business loans, etc. Individuals can check their pre-approved offers by entering their names and phone numbers online.
Lastly, eKYC is an automated digital initiative of the government concerning the eco-friendly system. Moreover, fetching and verifying information have become quick and error-free with this process. So, individuals should register with this system for future references.