It has become increasingly important to keep records of all customers in the country’s financial sector because of the growing number of fraudulent activities. An initiative called Central Know the Government of India launch your customer to curb these illicit activities.
This type of information assists the government in knowing the customer and in keeping your investments secures at all times. In the past, different KYC formats were use by different institutions. As cKYC online is introduce, multiple financial processes will be brought under one platform.
What is the process of cKYC?
To access financial services such as investment in mutual funds, senior citizen fixed deposit schemes, bank account and many more, and you will only have to complete cKYC online. A 14-digit KYC Identification Number will be sent to the Customer via SMS on their register mobile number and via email following completion of KYC after the submission and verification of the require documents.
With cKYC, customers can complete KYC with any bank, NBFC, or any other financial institutions without resubmitting all KYC documents to any other bank, insurer, or NBFC. Banks and NBFC can retrieve and verify the customer’s identity store with CERSAI using this information. Through this cKYC online process, KYC verification can be streamline and made more convenient.
Pros of cKYC online
Optimized costs for FIs
All the Field investigations in banking share the financial burden of performing KYC distributed among them. It was decided that a centralized database that contained verified KYC information would enable a single Field Investigation to conduct a customer’s KYC, and the rest would have access to the same information if needed. In this way, banks and NBFC can optimize their KYC costs.
One KYC verification per customer
cKYC online will significantly improve the convenience of KYC for customers, as they will only need to have their KYC documents verified once, so they don’t need to carry them around every time they need financial services.
Improved usability of KYC
With cKYC online, KYC data is easily gathered across all financial regulators, and, as a result, KYC verification is made more efficient by homogenizing KYC verification across different systems. As a result of cKYC, a customer’s KYC only needs to be verifiy once before any financial institution can use it
Need update only once
In the CKYCR, there is no need to update the customer’s identifying details every time they change, and not require doing so separately for each FI associate with the customer. In addition to being a cost-effective method, this is a highly efficient method. Even though cKYC has taken a huge step forward, some kinks must be work out and smooth over in implementing it.
Cons of cKYC online
- The cKYC records are not easily update due to the lack of a structured system that allows for frequent updates. Even though cKYC includes convenient ways of updating KYC records, this process is still paper-base which has to do with filling out a form and submitting update copies of KYC documents. Those accounts that were open could be challenge on a bona fide basis.
- As far as automated bulk uploads are concern, there are no tools for FIs to use for data extraction. Although KYC documents and details must still be manually convert into the bulk upload format and upload to CKYCR, the FIs will still need to do so manually. As part of this KYC process, FIs will also need to manually document the demographic and identifying information found in these documents.
- There is no option for field investigation to perform a real-time search and download from CKYCR in a real-time environment. To gain access to a customer’s cKYC records, FIs must submit a request using the require cKYC identifier.
- As a result, KYC data searches can only be conduct after the FIs have already download the KYC data from the Internet.