Gone are the days when Know Your Customer (KYC) process was a tedious task of submitting a set of documents which acts as proof of identity and address proof while opening any bank account, demat account or insurance account.
Now, Aadhaar based e-KYC service provides an instant, electronic, non-repudiable proof of identity and proof of address along with date of birth and gender.
It also provides the customer's mobile number and email address to the service provider, which helps further streamline the process of service delivery.
As per the Unique Identification Authority of India (UIDAI), the e-KYC service has the potential to revolutionize service delivery in the public and private sector, and drive innovation in the market.
Eliminates document forgery
There are less chances of identity frauds as there will be elimination of photocopies of various documents that were currently stored in premises of various stakeholders. As the eKYC data is provided directly by UIDAI, there is no risk of forged documents.
The use of resident authentication for authorization, the affixing of a digital signature by the service provider originating the e-KYC request, and the affixing of a digital signature by UIDAI when providing the eKYC data makes the entire transaction non-repudiable by all parties involved, says UIDAI.
Digitally signed electronic KYC data provided by UIDAI is machine readable, making it possible for the service provider to directly store it as the customer record in their database for purposes of service, audit, etc. without human intervention making the process low cost and error free.
The service providers can provide a portal to the Ministry/Regulator for auditing all e-KYC requests. The Ministry/Regulator can establish rules for secure retention of e-KYC data such as storage method, period of storage, and retrieval among other things.
With customer consent
The KYC data can only be provided upon authorization by the customer through Aadhaar authentication, thus protecting resident privacy.
e-KYC is fully paperless, electronic, low-cost aspects of e-KYC make it more inclusive, enabling financial inclusion.
The process eliminates paper verification, movement, and storage reduces the cost of KYC to a fraction of what it is today.
The service is fully automated, and KYC data is furnished in realtime, without any manual intervention.