Originally published at finovo.tech/blog/video-kyc-without-pan-card — the canonical version has the latest updates.

Exploring video KYC without PAN card

For financial institutions, the KYC (Know Your Customer) process is essential in ensuring customer identities are accurately verified. Yet, when considering video KYC without a PAN card, several operational and legal nuances come into play.

The challenge of PAN card dependency

Traditionally, the PAN card has been a staple in most financial verification processes across India. It ties an individual to financial activities, serving as a trusted source of identity verification. However, relying solely on a PAN card for video KYC can be limiting, especially when a potential customer doesn't have one at hand.

Why go beyond the PAN card?

There are numerous cases where individuals might not possess a PAN card. For example, students opening their first bank account, rural population segments, or even foreign nationals engaging with brokerage firms in Delhi or Mumbai. In such scenarios, having flexibility in the KYC process elevates accessibility and inclusivity.

Alternatives to PAN-centric video KYC

To cater to these nuances, institutions can explore alternative identifiers:

• Aadhaar XML and Aadhaar OTP: Both options offer electronic verification, which can substitute a PAN card effectively.
• Voter ID: Applicable mainly in demographic segments where voting age aligns with account opening age.
• Passport or Driving Licence: Often used for individuals who travel or drive frequently.

Regulatory backing

The RBI and SEBI regulations allow certain flexibilities within the KYC norms. For instance, Aadhaar eKYC has been approved for certain financial activities, provided the customer consents. These frameworks help ensure that video KYC without a PAN card remains within compliance.

Implementing video KYC without a PAN card: Steps and considerations

When initiating video KYC without a PAN card, your ops team should prepare for the following:

1. Select a reliable ID alternative: Choose from Aadhaar, Voter ID, Passport, or Driver's Licence, depending on the customer profile.
2. Streamline verification procedures: Train staff to effectively manage, verify, and store these alternative documents.
3. Communicate clearly with customers: Ensure customers are aware of the required documentation and the reasons behind these alternatives.

Tech adaptation is key

If your systems rely heavily on PAN card data inputs, consider innovations that can automate alternative ID processing. Products like eKYC enterprise solutions help streamline varied KYC inputs seamlessly into your existing frameworks.

Balancing risk and opportunity

Each financial entity must assess the risk involved with not using a PAN card while balancing it against the customer acquisition opportunity. For example, a Kolkata-based financial advisor may find value in broadening client bases in non-metro areas, even if it means stepping away from PAN-centric processes temporarily.

Feedback loop

Through ongoing customer feedback and adjustments, iteratively improve how your institution manages video KYC processes. This not only enhances customer experience but also strengthens the compliance framework.

If any of this hits a nerve, drop us a note — first call's just a conversation.

— the finovo team