Imagine opening a bank account or applying for a loan from the comfort of your home—no branch visits, no paperwork, just a quick video call. That’s the power of Video KYC (VKYC), a game-changer in India’s banking sector since its launch in 2020.
What started as a pilot project quickly became the backbone of digital banking during the pandemic, slashing onboarding times and making financial services accessible across the country.
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Productivity skyrocketed from 70 KYCs per month to 700, revolutionising digital banking. Yet, like any system, VKYC isn’t without its challenges. To further enhance customer experience and strengthen fraud prevention, I propose two key upgrades—simple yet powerful changes that can make the process faster, smoother, and more secure.
Say it, verify it
VKYC employs a liveness check. It ascertains that the customer on the screen is alive, physically present, and is who he says he is.
The current liveliness check in VKYC involves asking customers 2-5 random questions to confirm they’re real, not bots or fraudsters. While effective, this step often leads to miscommunication and rework.
For instance, a customer might say they live in “Navi Mumbai,” but their KYC documents list the district as “Thane” or “Raigad.” Such mismatches cause delays and frustration.
The solution? Replace the Q&A with a dynamic verification code. Customers simply read out the code displayed on their screen. This quick step confirms liveliness without room for error.
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It’s faster, simpler and eliminates unnecessary back-and-forth. The rest of the process—address and demographic verification—remains unchanged. This tweak alone could cut VKYC time significantly, making life easier for both customers and bank officers.
Goodbye, PAN hassles
Currently, VKYC requires customers to physically display their PAN card during the video call, where a bank officer captures an image for verification.
But here’s the problem—spotting a fake PAN card through a video call is challenging. Blurry images, worn-out cards, and sophisticated forgeries make this process both time-consuming and unreliable, creating a weak link in fraud prevention.
The solution? Eliminate the need for PAN card display altogether. Instead, leverage APIs from NSDL and the Income Tax Department to verify the PAN-Aadhaar linkage.
Since Aadhaar details are already authenticated via e-KYC, linking PAN to the same Aadhaar ensures a seamless and foolproof identity check. This approach not only enhances security but also speeds up the process. For added privacy, the API simply confirms whether the PAN and Aadhaar match—without exposing any sensitive data.
This shift also addresses a growing concern: document fraud. With fake PAN cards becoming more sophisticated, relying on visual verification alone is risky. By moving to source-based verification, banks can stay one step ahead of fraudsters. Plus, it simplifies the process for customers, who no longer need to fumble with their PAN cards during the call.
Conclusion
These two updates—simplifying the liveness check and verifying PAN-Aadhaar linkage—can significantly improve the VKYC experience for both customers and banks. They address the pain points of both by cutting call times, reducing fraud risks, and improving customer experience.
Dr. Murari Sridharan is chief technology officer at BankBazaar.com
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