The Video-Based Customer Identification Process (VCIP) is a customer identification method wherein an authorized official from the regulated entity (RE) engages in facial recognition and customer due diligence (CDD) through video interaction with the customer. This secure, live, and informed-consent-based interaction gathers identification information for CDD purposes. Additionally, it verifies the customer-submitted information independently, all while maintaining a comprehensive audit trail of the entire process.
VCIP, introduced by the RBI, is a real-time, end-to-end encrypted customer identification and verification procedure based on video. This innovative process allows banks and regulated financial institutions to perform paperless KYC through a video call, guided by a trained official.
The purpose of Video-Based Customer Identification Process (VCIP) in banking is to streamline and enhance the customer onboarding process through secure and efficient means. VCIP allows banks and financial institutions to verify the identity of customers remotely, eliminating the need for physical presence.
Traditional KYC processes rely on physical document submission and in-person verification. This method involves customers providing documents like passports and utility bills, necessitating a visit to a physical location. The process is time-consuming, often causing delays in onboarding and transactions. Additionally, traditional KYC may pose security risks due to the handling of physical documents.
In contrast, Video-based Customer Identification Process (VCIP) KYC represents a paradigm shift by leveraging technology for remote verification. VCIP enables customers to undergo the identification process through video interactions, eliminating the need for physical presence. This approach not only enhances accessibility but also streamlines the verification process, making it more efficient and reducing the time required for onboarding. The Reserve Bank of India has officially recognized VCIP, emphasizing its role in promoting a seamless and secure customer experience.
The VCIP, denoting the Verified Customer Identification Program, is an initiative introduced by the Virtual Currency Industry Partnership (VCIP). This program aims to ensure accurate identification and verification of individuals utilizing virtual currencies. To partake in VCIP, businesses must complete an online application. Upon approval, specific customer details such as name, address, date of birth, and government-issued ID number are submitted to VCIP for verification.
Once customer information is verified, businesses are assigned a unique VCIP ID number for each customer, which is mandatory for all subsequent virtual currency transactions.
Participation in VCIP is voluntary, but it enables businesses to demonstrate their commitment to Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance, reinforcing trust with customers.
The Reserve Bank of India (RBI) has given specific rules for banks to follow when they use the Voluntary Customer Identification Programme (VCIP). The main goal of VCIP is to make sure that banks provide good customer service and are clear about their dealings with customers. Under VCIP, banks have to share certain basic information about their products and services with customers for free. Here are the guidelines from RBI:
V-CIP KYC introduces a fresh approach for businesses seeking swift and reliable customer identity verification. This secure method is well-suited for businesses requiring efficient identity confirmation. V-CIP KYC serves as an excellent safeguard for online users' identities and personal details. Banks, by verifying this information, play a crucial role in ensuring the safety and security of online activities. This article aims to offer insights into the V-CIP KYC process, emphasizing its significance in helping customers maintain online safety.