Introduction

An August 2022 survey revealed that nearly 42% Indians experienced financial fraud over the last 3 years. As we go increasingly digital in the post-Covid era, the incidence of fraud and illicit activities has also grown in tandem.

Source: https://www.transunion.in/blog/fraud-trends-Q2-2021

To protect customers and financial institutions against the growing threat of crime, the RBI issued KYC guidelines way back in 2005. However, to simplify the KYC process, CYKC was introduced by the central bank on Feb 1, 2017. 

What Is CKYC?

KYC or Know Your Customer is a regulated process for banks & FIs to ask for certain documents and information from customers and verify them to truly know the entity they are dealing with. Central KYC or CKYC refers to a centralized repository that stores all KYC details of customers in a standardized format. 

The CKYC registry is managed by the Central Registry of Securitisation Asset Reconstruction and Securities Interest of India (CERSAI). All FIs registered under authorities like SEBI, IRDAI, and PFRDA have to mandatorily register their customers under CKYC. 

Benefits of using CKYC for FIs

Prior to the introduction of CKYC, customers were required to go through the entire KYC process over and over when starting a new relationship with a bank or financial institution. However, post the launch of CKYC, FIs can access KYC records of a customer that were obtained by other entities the customer already has a relationship with.

Customers can thus complete their KYC formalities just once and make the records accessible across FIs. This can ensure a seamless onboarding process for customers and lower the time and cost of complying with KYC regulations for FIs.

Challenges for FIs while using CKYC

• Complex infrastructure setup: CKYC requires financial institutions to create infrastructure for the entire system to leverage KYC data. 
• Unique encryption & decryption: Every KYC request from the FI requires unique encryption and decryption for posting to and receiving data from CKYC systems. 
• Cumbersome upload or update process: Uploading or updating KYC information requires the creation of a complex masterfile with numerous validations. 
• Constant checking of status: FIs need to check the status of submitted cases on a continuous basis with authorizations required for uploads or updates. This can lead to longer SLAs. 
• Manual processes: In most cases, the CKYC system lacks automation, which escalates time taken for onboarding and transactions and also elevates costs.

How Perfios CKYC solution can help

Perfios offers a streamlined and easy-to-integrate solution that enables FIs to search, download, upload and update information with respect to CKYC. The set-up is a simple 4-step process, requiring FIs to use Perfios API as a plug-in. 

Here’s how FIs can leverage Perfios CKYC API:

Search: FIs can use a common endpoint for individual and legal entities. They can simply search KYC details of a customer basis the document type, identity number and so on. 

Download: FIs can download details primarily on the basis of the CKYC ID and date of birth or simply the customer’s mobile number, pincode, and birth year.This is available for individual and legal entities.

Upload: Perfios API allows uploading information like personal details, address, contact details, identity and related person details, along with documents to be shared on CKYC. In doing so, Perfios handles the validations ,masterfile creation and upload to CKYC SFTP. This implies that there is no need for FIs to create complex infrastructure around CKYC and can simply use Perfios API .

Update: Similarly, Perfios also handles the processes related to updating the data on CKYC. FIs can simply plug in the API for updating any customer information to the registry like address etc.

Other Features of Perfios CKYC solution

Perfios CKYC solution comes with a simplified dashboard that can be used by clients with ease. At the same time, clients can leverage automation to reduce the turnaround time and begin servicing clients quickly. Not only this, the solution is also highly scalable, as it is driven by proprietary APIs like Face Match, Data Match and AI capabilities.

End Notes

Perfios CKYC is just the solution financial institutions need to simplify searching, retrieving, uploading and updating information to CKYC. Using Perfios API can give FIs an edge when it comes to smoother customer onboarding and servicing.

About us:

Perfios is the largest data, analytics, automation, and decisioning solution provider to FIs, catering to the entire lending lifecycle from onboarding to diligence & monitoring to collections. Perfios Technologies solutions enable systemic fraud prevention, risk management, compliance & automation through superior data engineering and deep tech applications.

In a nutshell, Perfios stands on the trifecta of digitization: automation, enhanced diligence, and robust decisioning for straight-through processing; thus, creating a state-of-the-art digitization process without compromising on security and quality. Perfios is a pioneer in the services it offers and has successfully acquired a very diverse portfolio of 300+ live clients, spanning across the largest gamut of use cases in the industry.