How to Avail Video KYC for Personal Loan & Why is it Important?

Financial institutions power the economy of a country by facilitating financial support to both lenders and borrowers. Technology has bridged the gap between regulatory requirements and the process that needs to be followed. KYC or Know Your Customer is one such standard mandatory process whether it is for opening a bank account, for a personal loan application, or for other financial products. We have come a long way from having to physically visit a branch, submitting physical copies of IDs and photographs, filling out lengthy forms, and waiting a long time for verification. Now, everything is ‘instant’. Video KYC is one such user-friendly initiative in which customers can verify their KYC via a video call instantly when applying for a personal loan.

What is a Video KYC?

Video KYC is completing the mandatory KYC process digitally. It is simple, fast, and convenient and doesn’t require you to step out of your home. It is more accurate than the regular KYC verification process as it involves audio-video interactions, live location tracking, and secure data storage.

In a Video KYC, your image is captured live on a video call. You are then required to present your original proofs on camera. These are then tallied with the documents that were submitted at the time of the personal loan application by a verification specialist present on the video call.

Things to Do Before Video KYC in a Personal Loan

A Personal Loan is an unsecured loan which means that you are not required to provide any security or collateral to apply for it. Since the associated risk is higher than secured loans for the lender, KYC verification of the applicant becomes all the more important.

After you have decided to apply for a personal loan, you must check your eligibility. Your personal loan eligibility can be easily checked on a Personal Loan Calculator online after providing personal and income details. Unsecured loans such as personal loans charge a higher rate of interest compared to secured loans such as home loans and car loans. Make sure to do detailed research on the personal loan interest rates offered by various lenders and select a lender as per your preference. Instant personal loans provide the facility of applying for the loan and booking a Video KYC appointment online. Once your application for the personal loan is found in order, you shall be directed to an executive to help you complete the video KYC verification.

Step-by-step Procedure to Complete Your Video KYC

Most banks and NBFCs offering instant personal loans have facilitated video KYC for the benefit of their customers. It is to be noted that as per RBI, prior consent has to be taken from the customer for video KYC.

Here is the commonly followed procedure for doing a video KYC:

• Post approval of your personal loan application by your selected lender, you will receive confirmation and a joining link to the video KYC application on your mobile and email address.

• By clicking on the link, you shall be directed to a verification officer. You may choose a time according to your convenience. Once you are ready for the verification process, make sure to keep your original ID and address proof with you; copies of which you had submitted along with the application form.

• When you get connected, the officer will ask you to present your documents. And your live picture will also be captured.

• The officer may ask some other questions for verification purposes.

• The original documents presented by you and your live photograph are tallied with the copies submitted during the personal loan application process. This will be done with the help of AI-based face recognition.

Once the video KYC verification process is over, the lender assesses your eligibility and notifies you whether or not the personal loan has been granted.

Why is Video KYC Important?

Video KYC has simplified the KYC process for personal loan verification. Apart from the convenience factor, it serves several purposes.

• Cost Effective: eKYC has eliminated the need to have physical KYC counters or kiosks.

• Saves time and effort: Neither does a customer have to visit a bank or NBFC branch nor is there a need for an executive to visit your home.

• Convenience: Instead of filling out forms, submitting selfies, or scanning documents, you can submit proof of identity via a video call. And all this can be done from the comfort of your home or office.

• Faster Verification: The TAT (Turn Around Time), from the time of applying for a personal loan to the final step of loan disbursal, has been greatly reduced.

• Reduction in Errors: The use of Artificial Intelligence (AI) and Machine Learning (ML) has reduced human intervention in the video KYC process. Hence the margin of error has also greatly reduced.