Aadhar is a 12 digit number and is the base of all the data structures throughout India. It is needed in every aspect of life. You cannot simply live without it. Though it is not mandatory to apply for the Aadhar card by law. However, it has become compulsory by necessity. Every day, we read the latest news about Aadhar. In this regard, the concept of KYC is getting a lot of attention from the general public.
KYC is an abbreviation of Know Your Customer. Its use in our daily life along with Aadhar has increased tremendously. Financial institutions are using the KYC as a way to verify their customers. Financial institutions include banking companies & non-banking finance companies. Now, these companies cannot provide services to their customers without KYC. There is a clear instruction to these banking & non-banking institutions from Government to follow the KYC Regulation while serving their customers.
The traditional procedure in most institutions or service providers depends upon the submission of relevant documents. This causes a lot of problems for the service providers & the customers as well.
From the customer’s point of view, he or she has to bring all the required documents to verify his or her demographic as well as biometric information. If he or she forgets to bring any document while visiting the service provider’s office, he or she has to go back and visit the service provider’s office again to avail of services.
On the other hand from the service provider’s perspective, the proper handling of the customer’s document is very cumbersome. The problem gets severe if the submitted documents from the customer get lost. There comes the role of KYC or EKYC. As
eKYC is also called paperless KYC. As the credential verification of the customers is done electronically, no paperwork is required. So, the burden of doing lengthy verification has ended now through the eKYC revolution.
How eKYC Works?
Once you visit the service provider’s office to avail of the services, they asked your UID. UID is also called the Aadhar number. Once they enter the customer’s Aadhar number, full name, address, mobile, and other details are retrieved from the UIDAI (Unique Identification Authority of India) database. Apart from the UID number, the customer’s biometric is also taken in order to access details via the eKYC Application Programming Interface (API). Thus, it makes it very easy for the service provider to verify the details of the customer.
Benefits of eKYC
There are several benefits of eKYC. Some of them are:
1. Customer Convenience – Due to almost no paperwork and speedy verification, customers find it very convenient to disclose their Aadhar number & biometric details.
2. Privacy – eKYC process can only be done if the customer is willing to give his or her Aadhar number & biometric details. So, the privacy of the customer remains intact.
3. Time Saver – eKYC allows saving of precious time that gets wasted on paper-based document verification. Now, all is done by connecting to the UIDAI database, and verification is done on the spot in the presence of the customer.