Video KYC changed how India onboards customers. What once needed a branch visit or a field agent now happens in a few minutes over a phone camera. Banks adopted it early, and many insurers followed by taking the banking playbook and plugging it into their own journeys.
That's where the trouble starts..
On paper, both industries are doing the same thing: confirming that a real person is who they say they are. In practice, VKYC in insurance vs banking differs in who's on the call, when verification happens, what the conversation has to cover, and what the recording is later used for. A flow built for opening a savings account will verify identity well enough for a policy, but it will miss most of what an insurer needs from that same call.
This post breaks down the differences side by side, and explains what an insurance-first video KYC flow should look like.
| Parameter | Banking VKYC | Insurance VKYC |
|---|---|---|
| Regulator & framework | RBI, KYC Master Direction (V-CIP) | IRDAI, AML/CFT guidelines (Video Based Identification Process) |
| Core goal | Verify identity to open and run an account | Verify identity and confirm informed consent, suitability and declarations |
| Who gets verified | Usually one account holder | Proposer, life assured, premium payer and sometimes nominee, who may all be different people |
| When it happens | Once, before account activation | At proposal, before policy issuance, and again at claim or payout |
| What the call covers | Identity, documents, liveness, location | Identity plus product understanding, disclosures, health and lifestyle declarations |
| How customers arrive | Mostly direct, via app or website | Agents, bancassurance, brokers, POSPs, aggregators and direct |
| Typical user | Digitally active, self-serve | Wide mix, often older, semi-urban, buying for family, agent-assisted |
| Main fraud risks | Mule accounts, synthetic identities | Impersonation of the life assured, mis-selling, coached answers, early-claim fraud |
| Cost of a drop-off | Delayed account opening | Lost premium, lapsed proposal, and possibly a lost agent relationship |
| How the recording gets used | Audit and compliance review | Audit, plus evidence in mis-selling complaints and claim disputes, sometimes years later |
| Relationship length | Ongoing, with transaction monitoring | Long-term contract (often 10 to 40 years), with key events spread far apart |
Banking: The RBI's KYC Master Direction sets out the Video-based Customer Identification Process (V-CIP). It is prescriptive about how the process runs: a live interaction with a trained official of the regulated entity, liveness checks, geo-tagging to confirm the customer is in India, capture of an official document (typically PAN), Aadhaar-based or DigiLocker-based identity data, randomised questions, secure end-to-end infrastructure, and a concurrent audit before the account goes live.
Insurance: IRDAI allows insurers to use a Video Based Identification Process (VBIP) under its AML/CFT framework, alongside CKYC and other KYC modes. Since KYC became mandatory across life, health and general insurance policies, insurers have had to verify every customer at scale, not just high-value ones.
Why it matters: RBI's rules exist because a bank account is a gateway for money movement. IRDAI's rules also cover money laundering, but insurance adds something banking doesn't have: the risk that a policy was sold to someone who didn't understand it, didn't consent to it, or gave false information that later decides whether a claim is paid. So the insurance video call has to do more than the banking one.
In banking, the person on the video call is almost always the person opening the account.
Insurance is rarely that simple:
The proposer, life assured, payer and nominee can be up to four different people. A banking-style flow verifies one face against one document. An insurance flow has to know which roles need verifying, match each person to the right documents, and sometimes verify more than one person in a single session or across linked sessions.
Flow requirement: role-aware verification, where the journey adapts to how the policy is structured instead of assuming one applicant.
Banking VKYC is one gate: verify, audit, activate the account. After that, ongoing risk is handled by transaction monitoring and periodic KYC updates.
Insurance verification happens at several points in a long policy lifecycle:
A flow built for one moment can't carry context between these stages. An insurance-grade flow should link each verification event back to the policy record, so a claims team in 2045 can pull up the 2026 issuance recording in seconds.
A banking V-CIP call is short and scripted: show your PAN, confirm your details, answer a couple of random questions, move your head for the liveness check. Done.
An insurance video call often also has to:
Flow requirement: product-specific, multilingual scripts, with each consent moment timestamped in the recording.
Most banking VKYC happens when a customer downloads an app and signs up on their own.
A large share of insurance is still sold through agents, bank branches (bancassurance), brokers, POSPs and web aggregators. That brings problems banking rarely deals with:
Flow requirement: detect additional faces or voices, shareable links that let an agent start a journey and hand it to the customer, and clear separation between agent-assisted steps and the independent customer confirmation.
The typical banking VKYC user is younger, urban and comfortable with apps. Insurance reaches a wider group: older customers, first-time buyers in Tier 2 and Tier 3 towns, people on low-end phones and patchy networks, and people buying on behalf of a relative.
A flow tuned for a 25-year-old on 5G will lose a 58-year-old on a weak 4G connection. Insurance VKYC needs:
| Banking Fraud Focus | Insurance Fraud Focus |
|---|---|
| Mule accounts for moving illicit funds | Someone else standing in for the life assured (for example, a healthy person on camera instead of an unwell one) |
| Synthetic or stolen identities | Hidden pre-existing conditions |
| Account takeover | Mis-selling and forged consent |
| Rapid, high-volume fraudulent onboarding | Early-claim fraud soon after issuance |
In insurance, face matching between the video, the ID document and any medical examination records matters a lot, because the most expensive fraud often involves the wrong person being insured. Deepfake and replay-attack detection matter in both industries, but the damage in insurance tends to show up only when a large claim is made.
In banking, the V-CIP recording mainly supports audit and compliance review.
In insurance, the recording can become evidence:
That means insurance VKYC needs searchable, tamper-evident recordings, with timestamps on key moments, linked to the policy, and kept for as long as the policy and any claim period run. That can be much longer than a typical banking retention cycle.
Banking VKYC usually connects to: core banking system, CKYC registry, PAN and Aadhaar verification services, account activation workflows.
Insurance VKYC usually connects to: policy administration system, underwriting engine, CKYC registry, agent and distributor portals, medical and tele-underwriting workflows, and claims management systems.
A plug-in banking solution treats the insurance stack as an afterthought. That leaves operations teams manually matching video sessions to proposals, which is slow and error-prone.
If you're evaluating or redesigning video KYC for an insurance business, look for:
The VKYC insurance vs banking debate isn't about which is harder. The two industries are trying to answer different questions:
A flow designed for the first question can't fully answer the second. Insurers who copy the banking playbook usually end up with higher drop-offs, weaker mis-selling defences and recordings that don't help when a claim is disputed. Insurers who build for their own journey get faster issuance, better persistency and a much stronger position when claims are questioned.
Banking VKYC mainly verifies identity to open an account. Insurance VKYC also has to confirm informed consent, product understanding and customer declarations, often across several parties and at several points in the policy lifecycle.
Yes. IRDAI allows insurers to use a Video Based Identification Process (VBIP) as part of its KYC and AML/CFT framework, along with other KYC methods such as CKYC.
They can use it for basic identity verification. But banking solutions usually don't support multi-party verification, product-specific disclosures, agent-assisted journeys or claims-stage verification, all of which insurers need.
Insurance policies can run for decades, and recordings may be needed as evidence in mis-selling complaints or claim disputes long after issuance.
By recording the customer confirming product details, premiums, terms and exclusions in their own words, video KYC creates a verifiable record of informed consent that protects both the customer and the insurer.
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