Video KYC is a way of completing the KYC identity check as a live video call between the customer and an employee of a bank or another regulated company. The customer does not need to visit a branch. In India, the RBI calls it the video-based customer identification process, or V-CIP. It set the rules for it in 2020.
The call is not an ordinary video chat. The rules require several things. The employee must be specially trained for this work. The call must run on systems in the bank's own premises, and every recording must be stored in India. The customer must also be in India, and the app records the customer's location. The customer's details come from a trusted source, such as Aadhaar eKYC or DigiLocker. The customer must show the original PAN card on camera, not a printed copy. The only exception is a customer who provides an e-PAN, the electronic PAN card. The bank also checks the PAN details with the Income Tax Department's records. The employee asks questions that are not fixed in advance, so that a recorded video cannot answer them. The whole call is recorded, with the date and time, and stored.
Software does most of the work around the call. It reads the PAN card when the customer holds it up. It matches the face on the call with the Aadhaar photo. It runs liveness detection and deepfake detection on the video. The employee's screen shows each result. So the employee's job is to watch, ask questions and decide.
Consider a customer in Shillong who wants to open a savings account with a bank that has no branch in her town. She fills in her details in the bank's app and enters an Aadhaar OTP, the one-time password sent to her phone. The app puts her in a queue, and an executive from the bank's KYC team joins the call within four minutes. The executive asks her to hold up her PAN card, tilt it, and read out her date of birth. The software reads the card and shows a face match of 91 out of 100. The executive then asks one question that is not on any script: which branch did she choose for her account? After about six minutes, the executive approves the call. A second person reviews the recording before the account is fully opened. This review is called a concurrent audit.
Video KYC is slower and more expensive than a fully automatic check by identity verification (IDV), because a person must be on every call. So many companies use the automatic check first. They send only uncertain cases, and account types that need a full check, to video KYC.
The main new risk is the deepfake: a fake face and voice, produced by AI, that can answer questions on a live call. This is why the rules require unscripted questions, and why software checks the video as well as the employee.