Video KYC vs Traditional KYC: What's the Difference?

Know Your Customer (KYC) processes have become essential for businesses against fraud, money laundering, and other illegal activities, particularly in the financial sector. Traditional customer verification methods involve physical visits to branches or offices, where customers must physically show their identification documents. However, as digital interactions have surged, limitations such as time consumption, inconvenience, and higher operational costs have initiated the search for more efficient alternatives like eKYC and Video KYC. Video KYC (Know Your Customer) is a digital approach to verifying customer identities through live video interactions, allowing financial institutions to authenticate customers remotely without the need for physical presence. This process combines digital technology with the security of face-to-face interactions and has been gaining popularity due to its efficiency, accessibility, and security features. Compared to traditional KYC methods, Video KYC offers several advantages such as enhanced customer onboarding, reduced operational costs, improved accuracy, scalability, and data security. However, it also presents some challenges like technology infrastructure, data privacy and security, regulatory compliance, and the digital divide. To successfully implement Video KYC, financial institutions should consider best practices such as selecting the right solution, staff training, system integration, user experience design, and continuous monitoring and improvement. As we look to the future, emerging trends in AI, machine learning, biometric advancements, blockchain technology, and RegTech will continue to shape the KYC landscape, with a focus on balancing innovation with security and regulatory compliance.