Aadhaar OTP-based e-KYC: It is interesting that most customers, even without noticing, leave behind a digital footprint that is used by likes of Google and Facebook to create customer profiles and customize their communication
including ads. Even as the issue of privacy was being hotly debated, it was clear that Aadhaar OTP based verification was far less intrusive most mobile apps.
Thus, voluntary online verification using Aadhaar or any other digital identity is really the need of the hour for customer convenience and fintech industry development, says fintech industry insiders. They say fintech exists because customers want it to. In fact, it would reduce the cost and time involved in onboarding a customer.
Speaking on the steps that ease e-KYC feature, Gaurav Gupta, Co-Founder and CEO Myloancare.in said, “Fintech industry and even traditional lenders are keen to reduce the cost and time involved in onboarding a customer. In this mobile-for-everything age, OTP based Aadhaar verification clearly remains the most convenient option. However, with regulatory and privacy concerns around the same, any movement towards allowing voluntary e-KYC using either offline or online medium will be a welcome step. One expects that the regulators will tread with caution and gradually evolve towards a fast, convenient and cost-effective e-KYC.”
The RBI (Reserve Bank of India) on 29 May 2019 amended its master direction on KYC norms enabling the use of Aadhaar card for account opening with entities regulated by it, with the due consent of the Aadhaar number holder. It will enable the Indian banks to open instant bank accounts using e-KYC based on Aadhaar authentication through the OTP mode.