Aadhaar to be common framework to onboard customers for financial products: Senior RBI official

Aadhaar- the 12-digit unique identity number issued by the Unique Identification Authority of India (UIDAI)- will serve as a common framework for KYC or know your customer to overcome multiple documentations to onboard customers seeking to buy financial products, a senior Reserve Bank of India (RBI) executive director.

“Different regulators regulate different entities, but at times there is an overlap in KYC, which is a pain point. The National Payments Council of India (NPCI) is given a mandate by the Ministry of Electronics and Information Technology to use Aadhar and bridge the KYC gap, but it will take some time to get clarity on this”, Vivek Deep, Executive Director, RBI said at Global Fintech Fest.

Video KYC was expected to solve many pain points, especially the requirement of a person to physically visit the branch, but artificial intelligence (AI) and deep fakes have made the process complicated.

Deep also highlighted the need for fintechs to innovate in cross border solutions, while urging entities to have dialogues with the regulator, if they felt regulations were hampering innovation.

“Cross border payments are crying for a solution and there is a huge opportunity for fintechs to build in this space, many have tried too. If cross border payments change the way domestic payments have changed, then that will be a huge win for the industry”, Deep said. No regulation is cast in stone, and if there is need the regulation will change, Deep said, while urging fintechs to be patient enough to see that change.