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Video KYC (Know Your Customer) has become a crucial component of client onboarding as a result of the digital disruption of Indian financial services. The banking, fintech, insurance, and lending industries are embracing video KYC solutions to replace inefficient paper-based procedures as the Reserve Bank of India (RBI) and regulators emphasise safe and complaint-free verification procedures.
Video-based KYC does away with the need for physical paperwork, reduces fraud exposure, and accelerates customer onboarding, making it a necessary tool for 2025 and beyond. This guide will discuss Video KYC: what it is, why it matters, and how businesses can best utilise it to enhance compliance and improve the customer experience, ultimately driving growth.
What is Video KYC?
Video KYC is a digital identification verification method where a customer completes their KYC via either a live video or a recorded meeting with a verification agent. This method combines AI-enabled facial verification, document authentication, and geo-tagging to comply with the guidelines of RBI, SEBI, and IRDAI.
Key Components of KYC
Video KYC brings together cutting-edge technology and regulatory assurance to deliver a secure and efficient identity verification process. Through the integration of several layers of authentication, Video KYC guarantees the validation of identity and compliance with financial regulations. Below we describe the key elements that establish Video KYC as a safe option for online onboarding.
Regulatory Compliance
- RBI: Requires banks, NBFCs, and fintechs to use video KYC.
- SEBI: Demands that investment platforms and stockbrokers use video KYC.
- IRDAI: Authorises Video KYC for the onboarding of insurance policies.
Full KYC vs. Min KYC
- Minimum KYC: Limited transactions are permitted with basic verification via OTP or document upload.
- Full KYC: Complete video call verification that grants complete access to financial services.
Industries Leveraging Video KYC
- Banking & Fintech: Account opening, loan disbursals.
- Stockbroking & Investments: SEBI-compliant customer onboarding.
- Insurance: Digital policy issuance with instant verification.
Why Video KYC Matters in 2026
With increasingly more transactions happening online, businesses need faster, more secure customer onboarding. Video KYC is a critical solution in 2025, delivering seamless verification along with stringent regulatory compliance. It is no longer an option but a competitive necessity for financial institutions, fintech players, and other regulated entities.
Key Challenges Solved by Video KYC
Legacy KYC procedures are full of inefficiencies that slow down growth and compliance. Video KYC addresses these problems by harnessing the power of automation, AI, and real-time verification. Right from reducing drop-offs to eliminating human error, it transforms the customer and business onboarding experience.
- Inefficiencies in manual KYC
Paper-based procedures need to be physically stored, are slow, and are prone to mistakes. By automating verification, video KYC cuts down processing time from days to minutes.
- High Rates of Customer Drop-Off
Complicated KYC processes result in early abandonment. By streamlining the procedure, video KYC increases completion rates.
- Complexity of Regulatory Compliance
Compliance is challenging due to frequent changes in KYC standards. With integrated audit trails and geo-tagging, video KYC guarantees compliance.
- Exorbitant Operating Expenses
Verification agents are costly to train and maintain. Video KYC powered by AI lessens reliance on manual labor.
- Insufficient Transparency in Audits
The absence of digital records in traditional KYC raises compliance risks. Video KYC offers tamper-proof logs and encrypted session recordings.
Benefits of Video KYC
Video KYC is beneficial for individuals who are not comfortable visiting banks or centres to complete KYC. It is a great initiative that helps both the businesses and their customers. Below are some of the benefits of video KYC.
Quick Onboarding of Customers
Video KYC helps to reduce the onboarding time and quickly does real-time verification of the customers. With video KYC, customers can complete their identification within minutes. All they need is a stable internet connection and a device that supports video.
100% digital & paperless
Video KYC eliminates the need for physical documents, paperwork, and multiple in-person visits. This makes the entire KYC process seamless and convenient.
Improves customer experience
The ability to complete KYC from anywhere using a simple device helps to improve customer experience.
Assures Compliance
Video KYC ensures to follow the RBI guidelines and other regulatory requirements. This ensures valid and secure verification of customers.
Lowers Operational expenses
Businesses save on manpower, infrastructure, and logistics costs associated with physical KYC processes.
Real-Time Identity Verification
Live video communication allows easy verification of facial features and document authenticity, and also reduces the risk of fraud, thereby protecting the identity of the user.
Lower Drop-off Rates
Lower drop-off rates result from the rapid and easy verification process provided by video KYC. By reducing client discomfort, this increases order rates and improves conversion rates.
Improved Fraud Detection
In addition to verifying the user’s validity, live video KYC also verifies timestamping, liveness, and geotagging. Identity manipulation by scammers is made more difficult by video-based verification.
Scalable for High Volumes
Without sacrificing accuracy or speed, video KYC can be readily expanded to accommodate high customer volumes.
Audit-Friendly & Secure
Recorded sessions provide a verifiable audit trail, helping businesses during audits, disputes, or compliance reviews.
Improved customer experience and convenience
Video KYC provides a frictionless and hassle-free experience to customers. They can verify from anywhere and at any time. Moreover, they do not need to visit the branch or submit physical documents. This certainly has benefits in improving customer satisfaction and increasing retention rates.
Higher efficiency and lower costs
Digitisation of KYC helps reduce the manual resources and physical KYC inconvenience of customer verification by any financial institution. Automating identity checks and verification speeds up the onboarding process, hence cutting costs while improving operational efficiency.
Improved compliance and risk mitigation
Video KYC helps banks meet compliance standards set by the Reserve Bank of India (RBI). It puts much emphasis on strong cybersecurity, requiring periodic infrastructure upgrades, and ensures connections only from IP addresses located in India. VKYC protects customer data using end-to-end encryption and geo-tags all customer interactions for added security. Banks follow these guidelines to avoid fraud risk and enhance safety in general.
Competitor Landscape in Video KYC
India’s Video KYC industry is growing rapidly, with various providers offering digital verification solutions for different business needs. As acceptance in banking, fintech, and financial services continues to grow, knowledge of the competitive landscape becomes equally important for finding the right KYC provider.
Market Overview
There has been much more momentum behind the Video KYC now playing out in India – largely encouraged by the regulatory push, and the move towards digital onboarding for businesses was increasing expectations of the population for a simpler, more effective way to verify identity. As companies look to verify identity, or KYC, faster and with increased compliance they have turned, as have solutions customers, not only to traditional identity solutions but also to advanced AI-powered verification processes. This section looks at the current state of Video KYC technology, as well as the important developments shaping the industry and the standard features of today’s solutions.
- Common Features in Video KYC Solutions
- Live and recorded video verification
- AI-based document authentication and facial recognition
- Geo-tagging and timestamping for compliance
- Key Gaps Identified (Based on Merchant Feedback)
- High drop-off rates during video calls due to connectivity issues.
- Poor agent interfaces leading to verification delays.
- Lack of omnichannel support (WhatsApp, web, app integrations).
- Differentiation Opportunities for Providers
- Seamless user experience with minimal steps.
- AI-driven automation for instant approvals.
- End-to-end compliance with RBI and SEBI guidelines.
Difference Between Traditional KYC, Video KYC, and e-KYC
Traditional KYC
A traditional KYC simply means physical KYC. An individual has to be present physically in order to submit their KYC documents. Once all documents have been verified, they can use the required services. This is a mandatory process for every financial institution, like banks, or any enterprise that deals in money-related services.
Video- KYC
Video KYC is a process in which the user must prove their identity via a live video call with the software. This software ensures the authenticity of the user and their personal and financial details. It is the perfect alternative to traditional KYC. This entire process promotes privacy, accuracy, and cost-effectiveness. With Video-KYC, the need for paper documentation is eradicated, thereby simplifying the KYC process and even allowing the entities to speed up the entire KYC process. This process not only improves the accessibility for customers but also reduces the operational costs of the business.
e-KYC
e-KYC is the online KYC of users. In a time where everything is digital, this modern approach allows verification of the customer’s identity and address without the need for paper documents.
This is mostly used by banks and other financial companies to verify the customer’s details using their Aadhar card, PAN card details or biometric data. This helps banks to easily onboard new customers and provide support to existing customers who have to mandatorily do KYC after every few months or years.
Digital forms of KYC, like e-KYC or video KYC, have largely replaced the need for traditional KYC due to ease of access. They are quick, secure, and efficient.
The Current State of Video-Based KYC Verification
The realm of video-based KYC verification has changed significantly due to technology and more regulations. Today’s solutions integrate the use of AI automation and human involvement to offer secure, efficient and compliant customer onboarding experiences. In this section, we explore the modern workflow, technological elements and security protocols for recent Video KYC implementations within the financial services sector in India.
Step-by-step Video KYC Workflow
- Customer Initiation: User submits ID proof (Aadhaar, PAN, passport).
- Live Video Verification: Agent confirms identity via video call
- AI-Powered Checks:
- Document OCR: Extracts data from uploaded IDs.
- Facial Recognition: Matches live video with ID photo.
- Liveness Detection: Prevents spoofing with biometric checks.
- Geo-Tagging & Timestamping: Ensures location and time compliance.
- Approval/Rejection: Real-time decisioning with audit logs.
Technology Stack Used
- Optical Character Recognition (OCR): Digitises document data.
- Face Match & Liveness Detection: Prevents identity fraud.
- Secure Session Recording: Encrypted storage for compliance audits.
Real-World Challenges With Existing KYC Journeys
Even with technological progress, the traditional KYC experience continues to present major challenges to both businesses and customers. From abandonment rates to compliance risks, these pain points detract from the efficiency of the business and its customers! This section identifies the pain points of the traditional KYC experience and illustrates the need for businesses to adopt more straight-forward and digital solutions.
Key Issues with KYC Onboarding
- High Drop-off Rates: Users abandon the KYC process before completing video verification
- Poor Agent UIs: Unwieldy verification workflows and agent user interfaces slow down the verification process
- Manual Audits: Compliance checks take time to complete, performing auditors
- Technical Issues: Call drops or being unable to upload documents slow the KYC onboarding process
- Poor User experience: No multi-platform support (Web, Mobile, WhatsApp)
Documents Required for Video KYC
Video KYC is a digital process, and listed below are some of the essential documents you need to present when opting for Video KYC. It helps in quick verification of your identity through a video call with either an official or the software designed by the company you are doing video KYC for. They capture your live photo and signature in order to confirm your documents and identity.
- Physical PAN Card
- Aadhar Card (Ensure your mobile number is linked to Aadhar using OTP)
- Blank white paper and a pen for signature
- Brightly lit and quiet room
- Secure and stable internet
- A smartphone, a desktop, or a laptop with a working camera
- Passport (in case asked)
- Driving License (in case asked)
How Video KYC Overcomes These Challenges
Video KYC offers a fresh way to overcome the traditional verification methods’ persistent inefficiencies. By utilising next generation technology and the intelligent design of processes, Video KYC technology addresses each pain point with systematic precision, each step of the way in customer onboarding. In this section, we will describe how modern Video KYC implementations convert verification from just a hurdle in regulatory compliance to a competitive advantage for the better, to also result in measurable differences in conversion rates, operational efficiency and compliance.
- Significant Advances with Video KYC
- Simplified User Journey: Less steps results in less drop-offs.
- AI-Powered Automation: Instant approvals for low-risk cases.
- Omnichannel Capability: Verifications carried out on the web or mobile, via WhatsApp.
- Measurable Business Outcomes
- 50% Reduction in Drop-offs: More seamless onboarding experience.
- 80% Faster Turnaround: Almost instant verification.
- 100% Compliance Assurance: Automated audit trails.
Cashfree’s Video KYC Solution
Cashfree Payments has developed an advanced Video KYC solution that streamlines and speeds up digital onboarding with full compliance to regulations.
Our AI-powered platform includes:
- Facial Biometric Detection
- Document Verification
- Liveness Checking
Secure ID features verification APIs to check all aspects of a digital identity:
- Official documents such as Aadhaar / PAN / DL / VoterID etc.
- Bank account information such as account number, name at bank, IFSC.
- Live location via GeoLocation API and IP Address Verification.
- Biometric Identification with Face Match and Liveness Check.
- Data enrichment APIs such as Prefill, Aadhaar OCR, and more.
Conclusion
Cashfree’s Secure ID, powered by Video KYC has progressed from being a compliance requirement into becoming a business enabler. As digital transformation speeds up in the world of financial services, institutions using advanced Video KYC solutions such as Cashfree’s Secure ID achieve competitive advantages by accelerating customer onboarding, reducing operational costs, and giving customers more confidence. Cashfree’s Secure ID combines regulatory compliance with a user experience that causes as little friction as possible, allowing growth-oriented businesses to thrive in 2025 and beyond.
In the future, look for continuing innovation in the areas of AI, biometrics, and omnichannel capabilities to further drive Video KYC. Financial institutions and fintechs using leading-edge solutions like Cashfree’s Secure ID can not only meet changing customer expectations, but also regulatory requirements as they evolve. More than just implementation, Cashfree’s Secure ID also stands for the future of scalable, secure, and future-ready customer onboarding that businesses will rely on to maintain an agile and competitive posture in an evolving digital environment.
Transform your KYC process with Cashfree’s conversion-friendly Video KYC Solution!
Frequently Asked Questions on Video KYC
1. What documents are needed for Video KYC?
For most Video KYC processes, you will need a PAN card and Aadhaar. In a few circumstances, an additional form of ID may also be needed, such as a passport or a driving license. Make sure that you have the original document on hand to verify during the Video KYC process.
2. Is Video KYC safe and compliant with RBI norms?
Yes, Video KYC follows all compliance and guidelines mandated by the Reserve Bank of India norms of July 2024, and follows security measures, including bank-grade encryption, biometric checks, and secure storage of information.
3. How long does a Video KYC session take?
Most Video KYC sessions take about 5-7 minutes. The AI-powered process is much quicker than a typical physical verification because checks are completed on the spot via digital channels (with instant document checks and face-matching) , thus reducing overall wait times.
4. Can Video KYC be fully automated?
Mostly, yes. The AI checks account for about 90% of the entire process, though there may still be cases where a human agent would handle more complicated cases. The Reserve Bank of India guidelines do allow for some human touchpoints, but the bulk of the Video KYC process can be done through automation.
5. Can Video KYC be done on mobile?
Yes, if you have a stable internet connection and your camera is working fine. Just collate all your required documents and start your video KYC in a quiet, well-lit room.
6. How do I know my video KYC is complete?
Provide all the documents asked for to the official or the software designed by the company. Once you receive the confirmation from the officials, your tab of video kyc will be successfully done, and the tab will be closed or redirected to the previous page.
7. Is video KYC compulsory?
KYC is mandatory to avail any financial services; however, Video KYC is required only when a customer already has an account or is initiating a transaction with the company, serving as an additional layer of identity verification. It is a secure and easy method to avoid paper documentation or the physical availability of the customer.
