eKYC also known as Electronic Know Your Customer is an extension of the usual or the offline Know Your Customer (KYC). It is used to collect personal and professional information of the customers who are linked with the organization. The two eKYC and traditional KYC mark a major difference which is the scale of difficulty. The Electronic Know Your Customer is easier when compared to the traditional offline KYC method.
Here is everything you need to know about the Electronic Know Your Customer (eKYC) verification- Meaning, advantages, documents required, and eligibility.
eKYC Meaning and How it works?
eKYC is a digitalized process of verification of the customers to ensure the data they provide is correct in nature before they get connected to a financial institution. It subtracts the face-to-face verification and eases the process whole together. eKYC was introduced to address the issues faced by banks of being used by criminals for money laundering activities.
So, to initiate the eKYC process one should have the access to their Aadhar card and if the financial institution you are linked with is authorized by the UIDAI (Unique Identification Authority of India) you can easily opt for eKYC verification.
Advantages of eKYC
eKYC promotes an easy, safe, fast, and cost-effective way of paperless verification of the customers. This makes the verification process very transparent and trustworthy for the customers to share all their essential details.
- Cost-effectiveness- While going through the traditional way of seeking KYC there is a lot of investment done in the workforce and the inventory. There is always direct contact between the bank and the customers for identity verification. On the other hand, it is not the same with eKYC everything is in digital mode i.e., at your discretion. It can be done anytime 24*7 without any physical movement of the customers.
- Fast service- eKYC service is delivered extremely fast when compared to the traditional KYC method. It is because the customers don’t have to go physically to the bank to fill out forms and do the other needful services everything can be done online itself.
- No papers needed- When a customer decides to join hands with a bank to apply for a loan or investments. The bank needs the customer’s identification to make sure the customer is valid and that the funds of the bank are in safe hands. For this, the bank would need the customer to visit the bank physically for all the documentation processes. But with the help of eKYC, that process becomes fully online thereby subtracting all the paperwork.
- Safety and Security- When talking about sharing personal or professional information with the bank, we always have a second thought about the information getting tampered. But while opting for eKYC this concern would not be a concern at all because everything is digitalized and hence safe and secure.
Documents needed for eKYC
While submitting the document you can be assured of your documents safely reaching the required place as the mode will be online. The thought of losing your documents or getting them tampered vanishes.
The following documents are required:
- Passport sized photographs
- Personal cheques
- Aadhaar card for identity as well as address proofs.
- Other documents such as PAN cards, Voter ID, etc, can also be used.
- When the account holder is a minor, the person handling the account will have to submit the ID proofs.
To be eligible to do an eKYC all you need is an Aadhar card by you. The Aadhar number is everything you need to register yourself with any government-run facility. The Aadhar number is a unique identification number that contains your personal as well as professional information.
If by any chance you lack an Aadhar card, contact the UIDAI (Unique Identification Authority of India). You will get it in no time after accurate authorization by government agencies.