Know What Is CKYC And How To Get It Done: The Ultimate Guide
When you’re trying to open an account with a bank or an investment brokerage, you must meet the necessary know your customer (KYC) requirements before you can use the product or service. Since the BFSI sector must adhere to KYC regulations, KYC must be done each time a user seeks access to a financial product or service. Even if a customer has already completed their Know Your Customer (KYC) process with another company, this still applies. But CKYC API is here to change it all.
CKYC API refers to a centralised repository of know-your-customer records. CKYC simplifies KYC requirements for users and companies alike. It allows product managers to provide a better user experience where users don’t have to wait weeks before accessing a product or service.
With our comprehensive guide, you will learn everything you need to know about CKYC API and how you can get it done.
What exactly is CKYC API?
Governments worldwide implemented KYC and AML laws to prevent fraud and increase user participation. The complicated requirements associated with them ended up doing the exact opposite. CKYC API was created to instantly provide customers access to a financial product or service by availing companies to fulfil their KYC requirements in minimal time. Customers may use their CKYC number to complete KYC compliance requirements for any financial product or service. In a system where over-regulation often discourages user participation, it is a welcome change that has helped improve user experience and prevent fraudulent registrations. It enables easier access to the products and services offered by banks, NBFC(s), insurance, and fintech companies in India.
Different financial institutions can use a single KYC record to complete the certification procedure for a new customer, with a centralised system in place. A CKYC number, a 14-digit code provided to each user upon CKYC registration, can be used to grant financial firms access to this information.
Benefits of CKYC?
Here are some of the benefits offered by the use of CKYC API:
- Reduced time for verification of KYC records: With the use of a centralised database, users and institutions do not need to wait for incredibly long periods of time for verification of KYC records. It also reduces the margin of error.
- Single-point verification for all institutions: CKYC significantly improves customers’ user experience, since a customer will only need to have their KYC documents validated once.
- Single-point updates: In case of changes in a user’s KYC information, the records need not be updated for each institution the user has a relationship with. An update in the CKYC records will trigger an automated update in institutionalised records.
- Unified KYC infrastructure: With the introduction of CKYC, verified KYC records are readily available across the industry, allowing financial institutions to focus their resources on other aspects of the business rather than KYC verification. It massively reduces the costs of KYC records verification since the entire ecosystem shares the cost.
What is the difference between KYC, CKYC, and eKYC?
The term “Know Your Customer” (or “KYC”) refers to the identification, due diligence, and monitoring procedures implemented by financial institutions (FIs) to thwart financial crimes. A wide range of paper-based, digital, and video-based KYC procedures are included in its scope.
CKYC, as previously stated, is a one-time KYC solution. CKYC differs from eKYC and standard KYC in that the data collected by the former is stored centrally. In contrast, the data generated by the latter is stored by each financial institution individually.
Compliance with Know Your Customer (KYC) regulations can be met digitally using eKYC. After the consumer validates the request via OTP or offline via XML files or the QR code on the user’s Aadhaar card, eKYC uses the UIDAI database to authenticate the customer’s KYC.
What is the process for completing CKYC?
At this time, CKYC is a paper-based process that requires the completion of paperwork and submission of required OVDs and photos.
The following documents are necessary for the completion of CKYC formalities:
- Duly filled and signed CKYC form.
- Self-attested POA (Proof of Address) as per AML laws.
- Self-attested POI (Proof of Identity) as per AML laws.
The CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest) is responsible for verifying and storing the documents in question. Upon the completion of the entire process, the customer receives a 14-digit KIN that can be used to complete KYC formalities at any institution in the BFSI sector.
Having built a world-class, AI-based CKYC data and quality-validation API which can automatically approve or reject KYC applications, a good CKYC stack is all you need. After embedding, the’ customers saw a greater than 5% drop in user drop-offs. By simplifying the whole process, the system enables auto-approval or rejection of a majority of the users. Adding to all these benefits, the best part is that it also decreases your operational costs by up to 90%. .