Aadhaar enabled e-KYC can bring Rs 10000 cr savings for telcos, banks

Aadhaar enabled e-KYC process for customer acquisition will allow Indian telecom operators and banks to save Rs 10,000 crores over the next five years, according to a study by development consulting firm MicroSave.

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Apart from substantial cost savings for banks and financial institutions, Aadhaar enabled e-KYC is significantly more efficient compared to current paper-based KYC, the study said.

Presently, customer enrolment processes followed by banks take longer time and it can be two to four weeks before an account is activated. Whereas Aadhaar e-KYC enabled bank accounts can be activated and ready to transact in a few minutes.

The existing practices prevailing in Indian banks and by telecom operators are majorly paper based manual KYC processes.

“There is also a widespread tendency at banks towards over compliance for static KYC, compared to dynamic risk profiling of customers based on transaction data and analysis. It results into incurring heavy costs for banks and a poor customer experience through delays and inconvenience,” the study said.

With Aadhaar enrolment covering nearly 97% of adults in the country, in a very timely analysis, the study emphasized that the use of Aadhaar based e-KYC could provide a number of benefits to service providers like banks and MNOs.

Given that e-KYC provides near instant verification of customers’ identity and their address, substantial cost reduction can be achieved through elimination of paper based verification, movement and storage being replaced by digital processes. Further, automation of the KYC verification process leads to a more efficient process that takes less time, thereby offering faster customer on boarding, the study said.

In order to avoid repeated KYC verification for customers availing multiple services, the consulting firm suggested that there was a need and an opportunity for greater harmonisation of KYC processes across diverse financial institutions and indeed with players in the telecom sector.

“This will speed up the process and result in massive cost savings,” MicroSave study added.

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3 Comments on "Aadhaar enabled e-KYC can bring Rs 10000 cr savings for telcos, banks"

 

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Chinmoy
March 21, 2016 12:15 pm 12:15 PM

I am some of our reader might have got new connection by doing eKYC through Aadhaar . Vodafone , Reliance etc. had piloted this in metros . Can anyone please share their experience here .

Sunil
March 20, 2016 10:30 pm 10:30 PM

A very positive step for digitalization of Hindustan and saving of time and money, here in Germany everybody has an ID card by which you can do all your work as it is required every where in every work. So Hindustan is moving in right direction ahead.

rajendra
March 20, 2016 8:24 pm 8:24 PM

ok

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