HDFC bank has created buzz in the recent times as it introduced the e-KYC (electronic Know Your Customer) norm in collaboration with National Payments Corporation in all of the branches. HDFC also claimed that the bank is all set to install biometric readers for scanning fingerprints to make the process even easier.

What exactly is e-KYC? It could be defined as a procedure that would enable a customer to walk in to the bank with an Aadhaar number and open an account by only by getting his fingerprint scanned. With the help of Unique Identification Authority of India (UIDAI), bank’s system will pull out all data of the customer that is stored online which includes name, address, age and other relevant data necessary and it will also save a copy of the KYC document that remain stored in UIDAI’ servers. The bank will only print out the account opening form with all the details of the customers already in it.

Before HDFC, Axis bank had launched e-KYC using Visa’s connectivity along with the UIDAI. With the e-KYC facilities, it will become easy for the customers to open accounts without any data entry. Moreover, the entire matter will become paperless as a soft copy of all the necessary documents will be saved in the bank’s systems. Banks are also coming up with the insta-account facilities which help the customers get their account opened within no time and also get them the whole account kit- cheque book, debit card and PIN number across the counter.

However, it is not just opening bank accounts, it has become easy to buy insurance policies with e-KYC. The Insurance Regulatory and Development Authority (IRDA) confirmed it recently that the e-KYC services that are stored in the Unique Identification Authority of India (UIDAI) would be considered acceptable by the insurance process. Aadhaar card has become the sole document fir customer identification as that contains all the necessary details for the identification of an individual along with biometric identification. Almost all the insurance giants across the nation are in the process of updating their systems to e-KYC.

Be it opening banking accounts or buying insurance policies, as the e-KYC becomes mandatory, the complete documentation procedure becomes faster, which eventually helps the banks, insurers , customers and the policy holders. Apart from that, the procedure is entirely paperless and it also takes the least turn around time for the insurance companies and the banks, which eventually makes the service better. With time, as e-KYC becomes compulsory everywhere in the banking and the insurance scenario all forms will be in the electronic form and their will be absolutely no physical documents.

UIDAI has rolled out 460 million Aadhaar numbers so far and it aims to take the number to 600 million by early next year. For the e-KYC, one just needs the Aadhaar number as it serves as the only data to confirm all the details of an individual with biometric fingerprints.

The e-KYC facility seems quite promising to the current scenario as long as banking and insurance is concerned. However, it is quite new to the contemporary market and requires some time to enter the market in full fledge.