Yes. An IRDAI circular dated Aug 24, 2020 has made Video KYC a legitimate way for Insurance companies to verify and onboard new customers.
Video KYC was approved by the RBI in Jan 2020 for Banks and Financial Institutions. The lockdown and social distancing norms of 2020 have rapidly accelerated its adoption in the Banking sector.
Demand for Insurance has gone up in the current pandemic era. However, lack of norms for onboarding people remotely was holding back growth in the sector.
With this one swift move, the IRDAI is unleashing the potential of an industry so crucial in people's lives.
Step in the right direction
Allowing Video KYC is a big step forward by the IRDAI benefitting businesses and customers alike.
The Insurance industry has typically operated on the back-bone of agents and back-channels. The Video-based process leverages these relationships rather than replace it.
How Video KYC will benefit Insurers
The Insurance industry has two major parts - Life Insurance and General Insurance.
Typically, KYC processes are required at the application stage of Life Insurance. In General Insurance, the KYC is usually conducted at the 'Claims' stage. VBIP makes it possible and viable for KYC to be done at the application stage even for General Insurance. This greatly reduces chances of claims fraud in the future.
In Life Insurance, KYC is done for three main reasons.
- To prevent ‘Death Before Policy’ i.e., the person is deceased before the policy is issued.
- To prevent identity fraud.
- To evaluate health-related risks of insuring a person
The prescribed video-based process involves live face-to-face interaction, albeit virtually. It's an actual digitization of a real world interaction.
The process mitigates all 3 risks involved in Life Insurance.
With Banks having already walked the path and companies like IDfy with multiple rollouts under their belt, we expect Insurers to take their Video KYC solutions live at a rapid pace.
IDfy's Video KYC platform is onboarding 10,000 people everyday for Banks, Financial Insitutions, E-Commerce, and Telecom majors.
For a demo, please write to firstname.lastname@example.org