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What’s the first step that a customer has to take when he wants to avail any service from a Bank or a Financial institution? It is the Know Your Customer (KYC) process. KYC is a process where a financial institution verifies the identity and personal details of a potential customer. The RBI has made it mandatory for all companies to undertake KYC before offering any services to customers. While it has had a positive effect of reigning in unscrupulous activities like money laundering and fraud, it has its drawbacks too.

With social distancing as the key preventive measure in the going global pandemic, expecting customers to come to the branches of RE’s, i.e. Banks, NBFCs, etc. seems out of the question. The biggest casualty of this situation would be the Know Your Customer (KYC) process which needs verification of documents and other aspects of a customers’ identity.

The NPCI (National Payment Corporation of India) has reintroduced eSign based electronic NACH (National Automated Clearing House) mandates. This latest update shared via a circular dated May 26, 2020, is bound to cheer Banks, Lenders and other institutions.

According to a 2017 Forrester study covering 140 companies across the financial sector in the United States, 88% of the participants agree that the Onboarding experience has a strong influence on the lifetime value of customers.

Every Indian financial institute which comes under the purview of the Reserve Bank of India (RBI) is mandated to carry out a Customer Due Diligence procedure before onboarding an entity. The RBI has also issued clear guidelines in the form of Know Your Customer (KYC) norms.

The legendary former president of the United States of America once referred to banks as the master of all the country’s progress and industry and rightly so. Today, there is not even a single reasonable individual out there who would disagree with the idea of banks being the epicenter of any country’s progress and development. It is almost impossible to realize true national progress and prosperity unless the focus is put entirely on the advancement and better facilitation towards the banks that run the national economy.