What does BGV (Background Verification) mean and why is it required

Hire the Right Candidate with Professional Background Verification Services

India is a land of talent. In recent years, the nation’s economic progress has been propelled by the availability of quality labour. As the nation records growth across multiple sectors, employees have become the backbone of brands, firms, and companies.

While the easy availability of labour is a significant reason for this boom, not everything is in the right direction. Multiple government and private firms have reported incidents wherein they had to suffer substantial losses due to employee misbehaviour. To avoid such instances, there has been a rapid mushrooming of background verification companies whose primary job is to verify the details shared by the employee at the time of joining.

It is through background verification that organisations are able to identify fake credentials and nip the problems of employee fraud in the bud. In this article, we will discuss all that you need to know about employee background verification.


Basic Criteria of Background Verification Companies in India

Organisations outsource their education verification services to specialised agencies committed to building a workforce with a genuine skill set. Here are the basic checks that you can carry out.

  • Identity Check

In India, the general protocol dictates that background verification should begin with cross-checking the national ID details. Verifying if the PAN and Aadhar details are genuine is the first step of background verification. Post that, you can outsource to a background verification company to authenticate the details mentioned in a candidate’s driving licence, voter ID, Ration card or passport. Jobs across sectors subject new joiners through this type of background verification.

  • Academic and Employment Verification

For most private-sector jobs, the remuneration is dependent on one’s educational and academic experience. The demand to supply mismatch coupled with the greed of a higher pay often leads candidates to exaggerate. Suppose your business is from the BPO, ITES, engineering, accounting, and medicine sectors. In that case, it becomes imperative for you to verify a candidate’s career details before giving them a job. That way, you can be sure that you are not paying a candidate more than their due.

  • Litigation

As an employer, you need to realise that your hire will be your representative in their social circle. Surely, you will not want someone with a criminal history to be a representative of your brand. In the recent past,  . To avoid letting such incidents tarnish the brand image, we recommend that you do a check on whether there were any past litigation charges against your shortlisted candidates.

  • Drug Screening

Background verification companies in India know substance abuse is a severe cause of worry among millennial employees.  y reveals that 7 out of 10 job applicants in their 20s tested positive for drugs. As an employee, you will not want to hire a candidate who indulges in substance abuse since that would conflict with your corporate values as well as their productivity at work.

  • Global Regulatory Compliance Adherence

International employers often look at the global regulatory compliance check to ensure that the candidates they hire are not involved in any serious crimes. It is a good practice to invest in this to ensure you are not hiring someone with a criminal history in some other country.

Use Video KYC Solution to Deal with these Common Challenges for KYC

Use Video KYC Solution to Deal with these Common Challenges for KYC

Remember when you had to go to an office or bank to submit documents, get a reference from someone, go through the tedious process of filling out lengthy application forms and had to submit copies upon copies of ID proofs to get any official work done?

Fortunately, we have Video KYC solution now. The Know Your Customer or KYC is a crucial part of onboarding customers in financial institutions, logistics, gaming, etc. RBI has mandated that all organisations perform KYC to verify the identity of the customer.

While this sounds like a simple enough guideline, the traditional KYC verification process is bogged down by lengthy duration, unnecessary paperwork, etc. Video KYC solution is an innovative approach that solves most of the common problems associated with KYC services.

 

Benefits of Video KYC.

Geographical Constraints

Traditionally customers had to submit the KYC documents and application form in person. Visiting the bank or the organisation’s office limited the customer’s ability to open an account and the business’s ability to gain more customers.

A customer would only consider those organisations that had an office in the exact geographic location as them. Businesses were forced to open more branches to reach out to more customers.

With Digital KYC, this is no longer a concern. Since the Video KYC solution takes place entirely online, the customers can open a new account without leaving their homes.

Customers can also consider those institutions that do not have an office in their city or their state. Video KYC verification uses geo-tagging to ensure that the customer is at the address mentioned.

Long-Drawn Out Onboarding Process

Earlier, once a customer submitted all the documents, a person at the organisation had to verify all the documents and details. Some businesses even require that the customer speaks to an employee to complete the process.

The customer then had to wait till an appropriate employee became available. It took time and tested everyone’s patience.

With Video KYC verification, not only does the whole process take place online, but it is also fast. Since most of the document verification is automated, it barely takes a few minutes. Even the live call with the agent does not take more than a few minutes.

High Cost

When customers had to perform KYC verification in person, the business had to allot a few employees purely for this endeavour. The company would also have to open branches in various locations to gain more customers. Both of these added to costs and reduced the profits.

With Digital KYC, the business does not need to have multiple branches. It only needs a few branches to host the employees. The cost reduction can immensely benefit the business’s baseline. By using third-party Video KYC solution providers like AuthBridge, the company ends up saving a good amount.

Endless Documentation

Earlier customers needed to submit photocopies of their KYC documents such as PAN card and Aadhaar card along with valid address proofs and a filled-out application form.

With a Video KYC solution, the entire process takes place online. The system uses an OCR to read and verify your PAN card details. The Aadhaar verification can be done using an OTP.

This is followed by a video call from an agent to conduct a liveliness check to verify if the customer is genuine. They will even ask for details such as security questions that you need to answer.

Customer Dropout

One of the most significant drawbacks of the traditional KYC verification process was that it frustrated the customers, and they dropped out of the process midway. Only those who had no other option and needed the business’s services went through the whole process.

With a Video KYC solution, businesses reduce the risk of losing a customer purely because the onboarding process is simpler. The reduced customer dropout will immensely benefit the revenue of the company.

 

How AuthBridge’s Video KYC Solution Works?

We at AuthBridge have come up with an innovative solution that leverages the power of technology to simplify the KYC verification process. The Video KYC solution from AuthBridge uses geo-tagging, OCR, and liveness detection to make the customer onboarding process fast, simple and stress-free for customers and businesses.

No more KYC challenges like long waiting period, unnecessary expenses on branches, wasting employee’s time and losing customers. AuthBridge provides the best Video KYC verification services to concentrate on the core area instead of wasting resources on the onboarding process.

Demystifying Different Types of KYC for Financial Institutions

Demystifying Different Types of KYC for Financial Institutions

KYC or Know Your Customer / Know Your Client is a widely used process in the Financial services sector. From account opening, lending, collections, insurance issuance, and securities trading to fraud and risk management and compliance, KYC is at the heart of customer identification and onboarding. In a country like India — with a large population demographic and varying levels of access to financial institutions — a scalable KYC becomes necessary to drive financial inclusion, profitability, risk mitigation, and compliance.

Considering the growing need for a simple, efficient, time and cost-effective KYC solution for both financial institutions and their customers, most of them digital natives of today, regulatory bodies like the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Insurance Regulatory and Development Authority (IRDAI) have stepped up to expedite and streamline KYC processes. Allowing for digital modes of verifications, in addition to physical or in-person verification, the regulatory bodies have enabled the BFSI sector to create scalable onboarding solutions, many of them built on top of modern technology. Yet, there are a few caveats to the access and implementation of these solutions.

 

In this blog, we will discuss the most widely known KYC types and understand their accessibility to financial institutions and compliance safeguards around each of them.

 

Paper-based KYC

This is an in-person form of verification where customers share physical, self-attested copies of their documents — Proof of Address (POA) and Proof of Identity (POI). Paper-based KYC requires a physical connection with the customer for document collection and signing.

Advantages

This method of KYC is the most traditional way of customer identification. The familiarity of the entire process for both customers and institutions makes this attractive, especially in areas untouched by digitisation.

Access

Any financial organisation can conduct paper-based KYC. There are many third-party experts who can help in navigating operational challenges.

Challenges

The manual nature of the process is cost-intensive and vulnerable to operational delays and inefficiency. The financial institutions face an additional challenge of storing the physical documents and ensuring their upkeep and maintenance. In times of a calamity, like the current pandemic, this process becomes incredibly ineffective.

 

Aadhaar-based eKYC

The Unique Identification Authority of India (UIDAI) has generated 1.2B+ Aadhaar cards, and these Aadhaar cards have been used for authentication 53B+ times. These statistics make Aadhaar one of the largest identity databases. Aadhaar-based eKYC makes use of this verified data to authenticate customers remotely. There are two ways in which an identity can be verified through Aadhaar — Online Mode: OTP-Based and Online Mode: Biometric-based. OTP-based verification requires customers to have their mobile linked with Aadhaar, whereas biometric-based verification requires UIDAI-verified biometric scanners.

 Advantages

This method gives access to an extensive database of verified users. It is 100% digital, hence, faster, and requires no contact with a customer. Aadhaar-based eKYC is also fully compliant with safeguards set by the regulatory bodies.

Access

Aadhaar-based eKYC can be conducted only by banks and telecommunication companies with an AUA/KUA license issued by the UIDAI.

Challenges

Aadhaar-based eKYC demands dedicated  technology infrastructure to complete the process effectively. Additionally, this method incurs a high cost when compared to other types of KYC solutions.

 

Offline KYC

The ‘offline’ in the Offline KYC misleads many to equate it with physical KYC. Offline KYC uses an offline form of Aadhaar without connecting to the UIDAI database. In this form of KYC, an Aadhaar XML/PDF-based or QR-code-based demographic authentication— Name, Address, Gender, DOB, Photograph — can be conducted without the use of biometrics. The XML-based authentication carries a high-resolution photo, but the zipped file can get complicated to download and share with agencies apart from possibility of misuse during transfer. The QR-code mode supports a low-resolution image, and details can be digitally verified through e-Aadhaar on hand-held scanner/mobile apps, making it secure and tamper-proof.

Advantages

Offline KYC is universally accessible to all kinds of private BFSI-entities. Customers must download and share the Offline Aadhaar from the UIDAI website and give their consent to its use for authentications. It is a fast and effective way of KYC where the cost of verification is next to none.

Access

All financial organisations can make use of Offline KYC with the consent and cooperation of their customers.

Challenges

For this method to work, a customer’s mobile phone must be linked to their Aadhaar as the offline Aadhaar download has a step where customers are required to share an OTP received on their mobile.

 

Digital KYC

Digital KYC involves capturing a live photo of the customer and Officially Valid Documents (OVDs) to be geo-tagged by an authorised officer. An individual can share digital copies of PAN, Aadhaar, or Driving Licence for KYC directly on the institution’s portal or other digital mediums. The Digital KYC process will then only verify the submitted details against the geo-tagged OVDs and not the document’s authenticity.

Advantages

This is a paperless way of onboarding customers by creating a pre-defined digital journey for them. This method cuts down costs drastically through an automated process and creates a seamless onboarding journey for customers.

Access: All banks, NBFCs and FinTech companies can use Digital KYC.

Challenges

The involvement of the RE agent makes the customer identification process dependent on manual intervention, which leads it open to subjectivity and resulting inefficiencies. This method also doesn’t deliver the promise of end-to-end digital onboarding.

 

Central KYC (CKYC)

Initiated by the Government of India, CKYC is a process that relies on a central repository of customer KYC records in the BFSI sector. This repository allows for inter-usability of KYC records across the financial services sector so that both businesses and customers don’t have to go through the entire process of KYC verification every time they engage with each other. Customers or a financial institution submits a signed CKYC form along with POA and POI. If all checks are in place, the form is processed, and a 14-digit KIN is issued for future transactions.

Advantages

CKYC ensures seamless access to verified KYC documents that could otherwise take days to authenticate. It also detects duplicate accounts, helping in risk mitigation. The customer data is stored in an electronic format. The inter-usability across all financial regulators — RBI, SEBI, IRDA and the Pension Fund Regulatory and Development Authority (PFRDA) — makes it easier for customers to upload documents at one place, leading to customer satisfaction. It is also a cost and time-efficient solution.

Access

CKYC is only available to entities governed/regulated by the Government of India/regulators like RBI, SEBI, IRDA and PFRDA.

Challenges

The KYC documents have to be submitted to the Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI) in a paper format in the absence of a digital or paperless onboarding process. Banks will have to undertake the challenging task of updating information on legacy accounts. They will also have to frequently update their records in the CKYC repository as soon as there is a change in the demographic details of a client. Inability to do so may result in a long chain of wrong authentications.

 

Video KYC

Video KYC refers to assisted/non-assisted KYC via video. It involves an agent and an auditor for verification and audit. Available as Video-based Customer Identification Process (VCIP), Video-based In-Person Verification (VIPV) and Video-based identification Process (VBIP), Video KYC is an entirely paperless and presence less KYC process for a compliant and fraud-free authentication. The customer onboarding process is initiated by submitting the POI and POA and recording a video via an app or a web portal provided by the service provider, which then is manually viewed and verified by an agent.

Advantages

Video KYC creates seamless customer onboarding journeys, enabling end-to-end onboarding. The use of technology to verify the genuineness of documents, the authenticity of individuals, and to match a document to an individual makes Video KYC a nearly error-free process. The onboarding time through Video KYC can be reduced up to 90% while also driving operational and cost-efficiency.

Access

The process is accessible only to banks using OTP-based eKYC and Offline Aadhaar verification and NBFCs and FinTech companies using Offline KYC.

Challenges

Video KYC demands heavy investment in technology if you are not working with a third-party expert. This is where AuthBridge comes in.

 

Video-based Customer Identification Process (V-CIP) by AuthBridge is a consent-based method of establishing customer identity. It provides a seamless customer experience via real-time data collection and verification, real-time face match, gesture-based liveness check and geotagging. Swift and economical, AI-powered V-KYC by AuthBridge is a scalable and integration-ready, plug and play product for remote customer identification and authentication within minutes. Compliant with AML/KYC regulations, this V-KYC solution offers customisable workflows to automate checks for customer journeys across different financial products.

In addition to Video KYC, the suite of Total KYC solutions at AuthBridge also includes Offline KYC (O-KYC), Central KYC (CKYC) and Digital KYC (DKYC). These solutions can be customised as per the need of financial entities.

 

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To find out more about these solutions, you can contact AuthBridge at sales@authbridge.com

The New KYC Norms by the RBI Support Digital Transformation All You Need to Know

The New KYC Norms by the RBI Support Digital Transformation: All You Need to Know

On 10 May 2021, the Reserve Bank of India (RBI) announced new measures to ensure that financial services market continues to operate congenially in the wake of the COVID 19 crisis. As per the RBI Video KYC guidelines these measures are centred around the rationalisation of compliance to KYC norms by the RBI, and attempt to relieve customers amidst the ongoing crisis and improve financial inclusion, especially among small and medium enterprises (SMEs).

 

A summary of what has changed:

  • Expansion of the scope of Video KYC

V-CIP or Video-based Customer Identification Process has been extended to new customer categories such as small businesses, authorised signatories and beneficial owners of Legal Entities, chartered accountancy firms and proprietorship firms. Earlier, this process was limited only to the banking customer onboarding scenario.

  • Conversion of limited KYC accounts to fully KYC-compliant accounts

The Aadhaar-based e-KYC accounts that were earlier treated as ‘limited KYC’ accounts in the absence of in-person verification can now be treated as ‘fully KYC-compliant’ once the Video KYC process is completed. This move will strengthen FinTech and the lending ecosystem by supporting digital KYC norms for these stakeholders and their customers. This move will also bring relief to payments banks who will now be able to onboard more customers and their customers who will get access to banking services like savings limit and credit that were restricted under limited KYC.

  • Extension of date for KYC compliance norms

Customers with a pending periodic updating of KYC norms will be exempt from any punitive action till 31 December 2021. They will be able to access their accounts without any restrictions from their bank till the end of the year. Meanwhile, they can complete their KYC process from the safety of their homes through digital channels. These are:

1. Video KYC for presence-less identity verification
2. Submission of electronic documents through DigiLocker
3. Use of KYC Identifier of Centralised KYC Registry (CKYCR)

 

Digital transformation is the way ahead

The recent move by the RBI has confirmed that KYC digital transformation is the way forward for the BFSI sector. While financial services have always been focused upon using technology and data as differentiated strategy, the recent crisis has expedited the adoption of technology and the search for newer and faster ways to get customer insights for an improved customer experience. Financial organisations are set to witness a cultural shift as they realise the importance of being more agile and open to new ideas and experimentation. All stakeholders need to invest in tech and digital capabilities heavily.

 

AuthBridge offers a plug and play model to adopt RBI-compliant KYC solutions

Video-based Customer Identification Process (V-CIP) by AuthBridge is a consent-based method of establishing customer identity. It provides a seamless customer experience via real-time data collection and verification, real-time face match, gesture-based liveness check and geotagging. Swift and economical, AI-powered V-KYC by AuthBridge is a scalable and integration-ready, plug and play product for remote customer identification and authentication within minutes. Compliant with AML/KYC regulations, this V-KYC solution offers customisable workflows to automate checks for customer journeys across different financial products.

In addition to Video KYC, the suite of Total KYC solutions at AuthBridge also includes Offline KYC (O-KYC), Central KYC (CKYC) and Digital KYC (DKYC). Financial entities can customise these solutions as per their need.

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AuthBridge offers alternate data analysis for identity management, onboarding & verification and risk intelligence

AuthBridge analysis structured and unstructured sources of alternate data

— utilities, mobile phone, rental information, tax data and social media —for customer insights for the purpose of underwriting, appropriate risk buying, and management of the lifecycle of a loan, beginning from onboarding-underwriting-collection-customer management. Our proprietary technology, powered by machine learning and advanced analytics, provide deep and reliable insights into the customer spending pattern, financial discipline, and payment behaviour. The use of alternate data is precious during the COVID crisis when many customers’ ability to pay has been negatively impacted due to loss of a job or with reduced income. Alternate data can offer a fair assessment of creditworthiness by relying on more than one source of authentication.

Find out more about these solutions here, or contact our team for a demo at sales@authbridge.com

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