Finance

5 Benefits Of CKYC API For Your Business

Paul Petersen

It is not an unpredictable fact that API integration is the future of financial institutions and banks in India, however, this calls for a highly regulated system to avoid the business risks associated with such high integration processes such as money laundering, digital scams, etc.

To curb this, the Indian regulatory authorities have developed the Central Know Your Customer (CKYC). CKYC API helps to form a centralized registry of the KYC records. These are maintained for the clients in these financial sectors.

Why is CKYC API so Important?

The main objective of this regulatory initiative is to create a structure that shall grant the investors permission to complete their KYC only once. This in return shall reduce the burden of presenting the KYC documents in each new investment made.

Also, in today’s time, fintech companies have created a comparatively easier operational service for businesses and banks to complete the formalities without any human intervention. Many agencies as well offer a reliable KYC solution through their advanced APIs and instantly scan through all the required details through these CKYC APIs.

Now when we talk about the advanced APIs, they are efficient time savers and offer a cost-effective KYC. These APIs integrations with a client’s Aadhaar are based on eKYC which creates a space to make the background screening convenient. These operations are streamlined to waste no time on the manual entries and the paperwork.

The key advantages of a CKYC API process.

Now let us scan through some important benefits of having a CKYC API for a business:

  1. Optimized costs: With the help of a centralized database kept for verifying KYCs, the financial burden of performing these regulations is thus distributed among all the financial institutions. Now here only one FI needs to conduct a customer’s KYC, while the rest shall not have to go through the process again and shall be granted access if required. This certainly optimizes the cost involved in KYC for businesses across this sector.
  1. Time-Saving: Both the financial institutions and their clients now do not need to unnecessarily spend copious time conducting a separate KYC verification. CKYC has created a turnaround in terms of smoothening the centralized system of verification.
  2. A Unified KYC: These Verified records shall be available on a sector-wide basis. This shall allow them to deploy fewer resources for KYC verification and maintain parity among these sectors.
  1. Increased Cooperation: CKYC API not only unifies the KYC data over all the financial regulators but also boosts the verification process by providing one KYC for one client.
  1. Single Update: In case of any changes to be made in the identification details of the customers, they shall be required to be updated once. This needs to be done in CKYCR and then no separate changes are required to be made with each FI associated with that client. This is because, once the details are updated in the CKYC portal, they shall be automatically updated across all the data.

While speaking traditionally, the process of collecting and compiling a customer’s profile used to be very time-consuming as well as hectic. But with the introduction of this centralized database in the form of CKYC, the finance sector and its investors can work with ease. And as far as government regulations are concerned, unifying the process is a gateway to curtail multiple frauds as due to data linkage, any rectification in order can easily be identified. This does not mean that the problem has been completely eradicated, the system still contains a series of loopholes and can be channelized in the wrong direction. Therefore improvements are in order and we shall be soon introduced to a reduced error system of verification.