Category: KYC & KYB

Welcome to our meticulously curated KYC/KYB category, a comprehensive repository dedicated entirely to the multifaceted dimensions of Know Your Customer (KYC) and Know Your Business (KYB). As we stride deeper into the digital era, the procedures around KYC/KYB have emerged as a fundamental pillar, ensuring secure and compliant operations within the financial landscape.

The articles housed in this category plunge into the complexities of KYC/KYB, discussing its inherent challenges, potential solutions, and its indispensable role in the realm of identity verification. Our articles traverse a wide array of topics, ranging from the application of artificial intelligence in customer due diligence processes to the impact of regulatory shifts on KYC methodologies. These writings cover a broad spectrum of subjects, offering relevance to businesses and professionals operating within the financial industry.

As a leading industry player in the domain of digital identity verification, Signzy stands at the helm of innovation in KYC/KYB. Our cutting-edge solutions are engineered to simplify KYC, making these procedures faster, more efficient, and notably secure.

Regardless of whether you’re a compliance officer diligently maintaining regulatory standards, a fintech entrepreneur navigating the challenging waters of the financial industry, or simply an individual interested in gaining a deeper understanding of the evolving world of KYC/KYB, our category offers a treasure trove of information and insights.

We invite you to join us on this journey of exploration as we dive into the future of KYC in the rapidly evolving digital age. Our articles aim to enlighten, inform, and provide a well-rounded perspective on the significant role that KYC processes play in today’s digital financial landscape. Welcome to a world where knowledge becomes power, and compliance becomes simplified.

Blooming Blockchain- How It Can Help You KYC Faster, Safer, And Better

Posted on | by Signzian

Does $10 billion seem like a boatload of money to you? According to Compliance Week, financial institutions across the globe were charged $10.4 billion as KYC and AML fines in 2020. Adjusted to inflation, that’s nearly half the revenue of the entire Hollywood in 2020. That’s wasted money that could have been saved.

Know Your Customer(KYC) processes form the spine of financial institutions’ safety. It primarily encompasses their Anti-Money Laundering (AML) efforts. Traditionally they have always been tiresome and time-consuming. Even after, they were not issues-free, and they were not unhackable. The processes are inefficient and labor-intensive. The risk of error is also pretty high. 80% of efforts go for information collation and processing, whereas the rest 20% is only spent on assessing and monitoring. 

Let’s have a look at how we can change this.

How Traditional KYC IS Falling Short

Customers dread KYC. For them, it serves no purpose other than to increase the activation energy required for CTA. Traditional KYC is out of the question as it:

  • Is manual and prone to human errors
  • Tiresome and time-consuming
  • Heavily dependent on physical attributes like space, storage, etc.

Digital KYC was the solution some years ago. They had:

  • AI-based processing that reduced errors
  • Quick TAT
  • Server storage
  • Better user experience

Many institutions shifted to Digital KYC with advanced Video KYC as an option. But before that metamorphosis could complete, we got newer and better modes. The digitized is getting digitized. This was primarily due to the shortcomings in safety, security, and universal ease of accessibility for the data and the users. An incompetent digital KYC process also Misidentifies fraudulent data and cannot track the customers for verification.

The era for change is here, and it begins with understanding blockchain technology. Blockchain is versatile and resilient. But above these, it records information as electronic databases in the form of blocks.

 

Blockchain KYC- The Next generation of KYC Processing

 

A blockchain is a specifically distributed database shared among the nodes of a digital network. It stores information electronically as a database. Blockchain KYC occurs in multiple stages in a specific Distributed Ledger Technology (DLT).

Stage 1- KYC DLT System

IFI or Initial Financial Institutions ensure users set up their digital identity using valid documents on a Blockchain KYC platform. The data becomes available with consent to institutions for verification. Some of the available options for storage are:

  • DLT platform
  • FI’s server
  • Centralized server

Stage 2- User can transact with FI

The user provides consent. The FI can verify and save the data on the DLT platform using the ‘Hash Function.’ FI delivers digital copies of KYC to the users marked with a Hash Function which matches the DLT platform’s one. This ensures that if the KYC data is changed, it will not correspond with the one on the DLT platform. In addition, it will alert the FIs about the change.

Stage 3- User transacts with Final Financial Institution(FFI)

Users consent to share data with FFI, and the KYC is performed. Then, FFI reviews the data and the respective hash function with the ones IFI uploaded. If both match, FFI finalizes the data as valid.

The Benefits of Blockchain KYC

  • Quality data with real-time monitoring and tracking.
  • Lower TAT- FIs have direct access to data without collation.
  • It eliminates paperwork
  • Decentralized, distributed data collection
  • Mandatory consent ensures safety for the user’s data.
  • Reduced expenses due to unhackable security and fortified operational efficiency.
  • Accurate information validation with DLT
  • Real-time user data appraisal- blockchain technology updates the FI of any new addition of user data.

The Culmination of Blockchain Technology and KYC

Collating user data and processing is expensive and time-consuming. But it has always been a mandatory part of any KYC process. But now, this has changed.

Blockchain not only provides an alternative for this but also helps enterprises monitor and assess user behavior. It saves time from tedious, laborious tasks of data accumulation and processing. It uses this time for the companies to focus on finding solutions for more creative KYC challenges.

It is important to note that Blockchain Technology is not magic and hence not the answer to all problems in KYC. It mainly helps in data collation. The validation process still is an unavoidable task.

Blockchain coupled with AI and cognitive processing technologies helps resolve this. They will create a synergistic and efficient system. However, it is hard to find the right solutions for your enterprise in such a saturated market. Signzy offers state-of-the-art resources and solutions for all your fintech needs. Ranging from onboarding to KYC, we have customizable solutions powered by AI decision engines to get you the best in the industry. 

About Signzy

Signzy is a market-leading platform that is redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering totally customizable workflows. It gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling 10 million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks.  It works with over 240+ FIs globally including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a strong global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and it has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

 

References

Evolution Of Digital Identity Verification

Posted on | by Signzian

As society and businesses move online, an identity check has evolved to digitally verify a candidate’s name, date of birth, address, and Nationality. However, digital verification is a must if you want to run a profitable organization, reduce fraud, stay compliant with international regulations and reduce the manual effort involved in physical verification. 

Digital verification supports multiple technologies like Image rectification, Blurriness detection, and Optical Character Recognition. These technologies will automate the identity verification process, making it reliable and time-efficient. 

But with the changing business behavior and behavior, how do you know that you are ready for what the future holds? This guide will cover almost everything about digital identity and related topics. In addition, we will be examining the current and emerging technology for online identity verification. 

What is Digital Identity Verification, and Why is It Necessary? 

Digital identity verification is a process that validates a person’s details and identifies who they are by computer technology. Digital identity is an online identity claimed in cyberspace by an individual, organization, or electronic device. 

In simple words, digital identity is the body of information about an individual that exists online. 

Through unique patterns, each identifier makes it possible to identify individuals. Initially, a digital identity arises from personal information on the web, and it may be the Pseudonymous profile linked to the device’s IP address. 

Why Has Digital Identity Verification Become Necessary? 

As technology helps us perform various complex tasks, cybersecurity threats also can’t be overlooked. Unfortunately, however, many people have their identities compromised. And cybercriminals are always on the hunt for frail networks. 

That means loopholes will be created in the complete identity management system that can be fatal for any organization. Organizations have to face millions of financial losses only because of the increase of identity thefts. 

That’s why the more robust line of defense in the form of digital identity verification is becoming necessary. 

Rise of Digital Identity Verification 

In the mindset of the social alarm created by the Coronavirus, many efforts are focused on regaining stability. However, since March 2020, we all have been asked to change our habits in most circumstances like everything has to be done without leaving home. 

From watching movies to banking, everything should be done remotely. With the rise of digital transactions, there is a positive impact in the world of banking. However, digital transactions open up various advantages and opportunities for users. 

But it also has some risks that did not exist before. That’s why digital banking requires a lot of security and trust between banks and consumers. For example, while interacting with new customers, banks need to know whether the customer is who they say they are. 

In that case, Banks conduct a Know your customer process to ensure that the individual is not a fraudster. Therefore, during the customer onboarding process, the online real-time identification of an individual’s identity through digital identity verification is also a must. 

Recently, the Fintech company allowed their customers to transfer money through an online app; as a result, their shares rise to 13% on the first day, and its market value reached up to $7.8 billion. 

Below, we will show you some points that will clarify the concept of digital identity verification evolution. 

  1. Rising Trend in the use of Digital Identity 

Identity verification is a critical issue in many companies that need to comply with KYC regulations during the personal onboarding process. Many financial institutions are turning to digital identity verification to safely and securely onboard remote customers. 

About 85% of BFSI companies have already started the digitization process and provided digital account opening. However, the budget allocated to the digital account opening has almost doubled the size before the current pandemic. 

After the COVID-19, many Financial institutions partially started digitizing the customer verification process. For example, an individual has to initiate a loan application online and then finalize it with an in-person visit to show their online identity. 

  1. Strong Security, Privacy and Compliance Requirements

The customers want to open a bank account with minimal friction. In addition, they want to feel secure that the right level of security is in place to protect their identity. 

Therefore, digital verification must consider anti-fraud, all security, and data privacy with the security of customers’ data. Anyone aiming to digitize an account opening process will be well aware of many requirements that need to be met.

  1. Some Financial Institutions have a Solid Competitive Advantage in Enabling Digital Identity Verification by Adapting to New Customer needs

The digitally-enabled financial institutions whose employees work from home best fit social distancing and online financial services. The banks with a mature digitalization channel are on the success line, while others have to kick start their digitization program from starting. 

  1. Digital Transaction Volume Increases, But so do Fraudsters and Cyber-Attacks

Fraudsters are also taking advantage of the insecure online transactions during COVID-19. When the WHO declared the pandemic, there was an apparent rise in the loan fraud attacks and took the form of first-application fraud, third-party application, and synthetic identity fraud. 

That’s why financial institutions are incredibly vigilant in their onboarding and digital identification process to detect and prevent application fraud. 

How Does OCR Work for Identity Verification? 

The manual job of feeding the data needs to be automated to improve the process of identity verification. In that case, OCR (Optical Character Recognition) converts all the information on an ID into text for input and information validation. 

First, the digital identity will be scanned, then analyzed, and finally translated into the character codes. Further, you can use this machine-encoded text to validate the information against a genuine verification source. 

It will help you verify National IDs containing numbers, addresses, names, and various other parameters. 

Benefits of Using OCR Technology for Identity Verification

Here, we will walk through some of the benefits of using OCR technology for digital identity verification. 

  • Time-efficient: OCR will eliminate the need to enter details on every form or HR portal manually.
  • Cost-efficient: It will reduce manual labor for document sorting and filing, thus saving delivery and raw material used for physical verification. 
  • High accuracy and improved service: OCR ensures that the employees only access accurate and reliable information whenever needed. 
  • Storage space and data security: You can store the data inputted through OCR on servers that reduce the cost of maintaining the physical files. 

How Does Signzy Add Value to Your Digital Identity Verification Process? 

The benefit of partnering with Signzy for Banks and other financial institutions is that our combination of Artificial intelligence and blockchain will ensure that digital compliance is convenient but secure. 

Our solution is trained for document reading and facial recognition accurately representing an individual’s personal details. Our scalable backend operations help businesses to scale faster, cut turnaround time and reduce cost. 

Our data protection infrastructure can identify different types of IDs to input correct details and generate accurate and reliable results. 

Wrapping Up 

The organizations that haven’t yet indulged in the digital identity verification process gradually lose their customers. However, the evolution of OCR technology for digital identity verification benefited many financial institutions in time and cost efficiency, providing high accuracy and improved service. 

About Signzy

Signzy is a market-leading platform that is redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering totally customizable workflows. It gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling 10 million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks.  It works with over 240+ FIs globally including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a strong global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and it has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

 

Licensing NBFCs & PSOs to Authenticate Aadhaar

Posted on | by Signzian

Payment System Operators (PSOs) and NBFCs can apply for authentication licenses to become KYC User Agency (KUA). These entities may also apply for a Sub KUA license to perform the authentication process through a KUA. The Reserve Bank of India, on Monday, September 13, 2021, invited Non-Banking Finance Companies (NBFCs), Payment System Participants, and Payment System Providers to apply for Aadhaar e-KYC Authentication License.

Presently, banks are the only institutions allowed to do customer identification and verification. It is through one –time password (OTP) based on the Aadhaar card. The OPT is received through a mobile device.

The Prevention of Money Laundering Act, 2002, provides that the Central Government may permit through a notice to a non-banking entity to perform Aadhaar authentication using the e-KYC authentication facility. However, the entity in question should comply with standards of security and privacy as prescribed in the Aadhaar Act, 2016.  

In addition, consultation with the appropriate regulator and UIDAI should happen before the issuance of the notice of permit. The credentials of the reporting entity should satisfy the regulator and UIDAI.

According to the Circular issued on May 9, 2019, the process of application by Non-Banking Finance Companies, Payment system Participants, or Payment System Providers starts by applying through the respective regulator. The regulator determines the format of applications. 

The regulator reviews the submitted applications and can reject them if unsatisfied. If satisfied, regulators forward applications to UIDAI for further scrutiny. UIDAI finally sends a recommendation to the Department of Revenue, Ministry of Finance for notification. UIDAI may issue some conditions when submitting its recommendations. If satisfied, the Central Government issues the notification. UIDAI will then authorize the applicant to do authentication upon payment of required fees and adherence to terms outlined in the Aadhaar Act.

These are the possible implications of permitting Non-Banking Finance Corporations and Payment System Participants to obtain e-KYC authentication license:

Simplify the process of onboarding customers. Instead of relying on the cumbersome process of verifying physical KYC documents, e-KYC authentication will make the process smooth through digitization.

In addition, NBFCs, Payment System Participants, and Payment System Providers will save on the cost per transaction by eliminating manual paperwork and adopting Aadhaar e-KYC verification. It is because customer information is already pre-captured.

Save on the cost of operation. Through digitization, NBFCs and PSOs will realize savings through a reduced staff. A digitized process requires less staff than a manual one. In addition, the entities seeking e-KYC authentication would eliminate travel expenses to verify the physical address of clients since this information is in the Aadhaar card. 

NBFCs and PSOs will experience a faster authentication process. As a result, they will serve a large population in a short period rather than the slower manual processing of KYC documents.

E-KYC authentication will help NBFCs, and Payment Operators reach more micro, small and medium enterprise (MSME) borrowers. Turnaround time for loan processing will reduce. Ultimately, a broader population will have easier and faster access to credit, resulting in a positive impact on GDP and the general growth of the economy.

Improve trust and confidence levels. Customers will have more trust and confidence to engage with NBFCs and PSOs that are licensed. Approved entities will have met the cut after undergoing the rigorous application and vetting process. More trust would translate to more business for non-banking entities as they strive to offer accessible and affordable financial services. 

KUA or Sub-KUA licensing would help curb incidences of fraud that would pass through a manual validation process by NBFCs and PSOs. E-KYC is robust and foolproof. It would safeguard NBFCs reputation and prevent loss of resources through impersonation and other fraudulent activities, making it a safe platform for customers.

Improve compliance. NBFCs offering financial services have been relying on third parties to onboard customers. Once they acquire a KUA license, they can directly authenticate clients and be more compliant.

It is a novel program. The need for a ready and central data repository is unprecedented. Invitation to Non-Banking Finance Companies to come on board is a testament that the demand is high. There is no need to reinvent the wheel. Licensed entities will leverage the online database and verify the identity of customers. It will enable better and convenient service delivery by entities that tap into this system.

On the other hand, possible misuse of customer data is one of the biggest challenges this authorization will create when more entitles could access customer data. Regulations to address the same are in place, but enforcement to ensure compliance will be necessary. 

For example, in 2018, the Supreme Court of India had banned Private Entities to use Aadhaar numbers for verifying customers. It was due to complaints following allegations of commercial exploitation. The cabinet, through an ordinance later, allowed private companies to authenticate via Aadhaar. However, the customer will voluntarily choose to avail their Aadhaar information with these private entities such as banks and telecom operators.

Supreme Court has in the past recognized privacy as a fundamental human right. This ruling delivered on August 24, 2017, should be a constant reminder to those who have access to people’s data to protect it by all means. Privacy recognizes each person’s autonomy and the right to make personal choices. 

Hackers can find a way of interfering with servers and access Aadhaar data for malicious use. Technology is good, and with it comes challenges. However, Aadhaar data is secure and in the Central Identities Data Repository of UIDAI and has not been breached. NBFCs and PSOs will have to ensure their systems are foolproof so that they can protect customers’ data and deter any possible system hacking.

Besides, service providers with the authority to access the Aadhaar system are required to use data only for the intended purpose. This helps in data protection. By granting more entities access to the Aadhaar system, all Aadhaar number holders hope that effective data protection measures will hold.

Conclusion

The notification inviting other players besides government and banking institutions to apply for e-KYC authentication to address the growing demand of social and financial inclusion by various players is a step in the right direction. It will be interesting to see how entities that pass approval will revolutionize their operations. Customers will also reap greatly.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Rahul Raj

Cars, Loans, and Technology- How APIs Help In Vehicle Financing

Posted on | by Signzian

In 2018 India had a sale of more than 3.3 million passenger cars making it the 5th biggest car market in the world. Lion’s share of this was financed or bought on loans(Vehicle Financing) which amounted to more than 2.6 million vehicles. Since then the annual car loan market has stayed north of Rs.1.25 trillion in value in the country. 

It is time the Financing industry took up the mantle and utilized this ecosystem. It will be a win-win situation for the lenders and the lendee. Unfortunately, it’s far easier on paper than in practicality. With the tremendous demand scalability of loaning is constrained while the threat of fraudsters is also on the high. Thus an easy solution for verifying and onboarding customers is essential for financing entities.

What Are The Challenges In The Vehicle Financing Industry?

With the increasing demand, the industry faces many challenges to resolve. With the plethora of incoming applications, it is cumbersome and time-consuming to process all documents manually. It is not efficient and even borderline whimsical. The TAT  for the whole process is a major roadblocker for onboarding. The fact that manual intervention results in numerous human errors also adds to this argument.

As most financing institutions are indulging in scaling their processes, traditional modes of financing and onboarding the customers are not pragmatic. Scalability brings a form of synergic profitability as replicable system is more preferable. Traditional methods lack this.

Additionally, fraudsters, scammers, and illegitimate customers may cook up ways to avail of loans that they otherwise wouldn’t. The advancing technology they are using aids them in this deceit. The only way to halt fraud using technology is to use better technology. In India, many financial institutions are yet to create an environment with technological competence.

In summarizing, the major challenges in the auto-finance industry are:

  • The high TAT required
  • The inefficiency of in-person verification
  • The undeniable human error factor
  • The impracticality in Scaling
  • Advanced Financial Fraud

How Can We Tackle The Challenges With Technology?

The unprecedented pandemic and the advancements in technology boosted automation in ways we had not experienced before. Even before the pandemic the government and the regulatory authorities saw the trajectory of technology. They have instated regulatory and compliance guidelines for digitizing financing and onboarding processes.

Digitization is the key to smoothening vehicle financing. It helps us get rid of human errors while drastically reducing the TAT for processing. Long queues and waiting lists can be eliminated. Instantaneous processing replaces it with technology. 

The Indian car loan market is expected to grow by a dashing 8% by the fiscal year 2026. But this is possible only with all the major players digitizing their processes. A completely digitized system makes massive scalability practical and easy. When each competitor is scaled to a good extent, the industry proliferates.

With adopting digitization, it is easier to store, retain and retrieve data. Almost all information is in the soft copy format. This reduces the capital resources required and storing documents is no longer a headache. If the system is secure, then the data is safer than it is in hard format. This leads to safer transactions as fraud is detected swiftly and necessary measures are taken to stop it. With a good security system, all-digital processing is fortified.

In essence, digitization makes vehicle financing:

  • Faster with reduced TAT
  • Profitable with easy scalability
  • Not prone to human-errors
  • Store data as soft copies
  • Secure against fraudsters

Why Signzy Is The Right Choice

With the strict competition, almost all financial institutions are making their loaning process easier. This makes it all the more needed to identify and verify the customers availing loans while ensuring all the needed regulatory and safety measures. But the catch is that, how do you fulfill all the criteria of regulations and safety while maintaining an easy journey for each customer? This is what we excel at.

We at Signzy give you customizable APIs and other resources that help you conduct safe and compliant customer onboarding, KYC, and all other requirements you have. Our RC API verifies all vehicular registrations in the country with valid government databases. We will help you onboard customers availing auto-loans with ease and safety while the seamless UI will make the journey all the more engaging. With numerous products, services, and resources in our arsenal, we can make your enterprise better.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Shared Consumer Goods

KYC in the Shared Consumer Goods Industry

Posted on | by Signzian

Shared Consumer Goods represent a shift in modern consumption patterns, emphasizing accessibility over ownership. As the global community becomes more environmentally conscious and urban spaces more constrained, the idea of owning every product outright becomes less feasible and less attractive.

In 2019, the rental industry has made a huge market in India with estimates that the market stands at about $1.5 billion. But most people tend to limit the rental industry to car/house rentals like Zoomcar or ZoloStay. But in reality, the rental industry consists of almost every kind of consumer product that one could imagine.

When you need a new king-sized bed but can’t afford a new one, RentoMojo or Furlenco offers you premium quality beds and furniture for rent.

Attending a social affair but can’t afford the right attire? 

Login to thestyledoor.com and rent trending fashionable clothing at almost a tenth of the purchase price. 

Then there are other major brands like Quikr, GrabOnRent, and RentSher which provide you a wide range of goods on rent. You can find everything from home appliances to electronics to gym equipment on rent here. So basically, the policy of rental companies is something like: If you can dream it, you can rent it !!!!

Rise Of Rental Consumer Goods – How It Came About

Technology has redefined the concepts of sharing and renting, as Netflix has done with videos, Uber with transportation, and Airbnb in hospitality. 

A sizable sharing economy is opening up on apps and mobile sites that allow users to pick up a mind-boggling array of stuff on rent—designerwear, sofas, refrigerators and microwaves, beanbags, flat-screen TVs, and much more. The business is tantalizingly attractive and expected to scale to $45-48 billion, from less than a third of that, according to reports by industry lobby Assocham and consultancy firm Ernst & Young. 

Millennials!!

The majority of consumers consists of the youth who are just out of college and into their first jobs — are driving the sharing economy. Renting for them makes more economic sense than buying. 

How Rental Products Work – The Major Players & Their Initiatives

The sharing economy is expanding from cab rides, houses, movies to furniture, appliances, and more. The leasing economy solves the problem of need today. 

  • Furlenco claims to have furnished more than 20,000 homes in the past two years. It has an ambitious goal to scale ten-fold by 2020, entering two lakh homes. Earlier, furniture was owned rather than rented as there was no option. Now, bachelors, who average 28 years of age and constitute 60% of Furlenco’s customers, have the choice of renting furniture via apps. Even newly-married couples, with a joint income of Rs 10 lakh a year, opt to rent furniture, which forms 80% of Furlenco’s business appliances account for the rest.
  • Another rising star in this sector is GrabOnRent – which offers a marketplace for renting projectors, lights, adventure gear, bikes, microwaves, refrigerators, and other appliances, GrabOnRent started in 2015. GrabOnRent claims to have 9,000 users who have leased out 15,000 products. To source products, GrabOnRent has 450 partners, including Godrej Appliances and Micromax. It offers free delivery and pick-up once the rental period is over and takes care of maintenance such as aircon servicing during the duration of the lease. To rent a washing machine costs Rs 649 a month, a refrigerator, Rs 649 per month and a TV, Rs 899.
  • In an overcrowded online fashion space, Stage3.co is trying to carve out a niche by renting. It is avoiding fast fashion to focus on designerwear and leveraging linkages with Bollywood stars and fashion designers to offer exclusive collections on lease for both men and women.Stage3 has a team of 30 in-house designers and also sources unused capacity from others. The bulk of the orders come from Mumbai and Delhi, with 60% of them being repeated. Designer outfit rentals can range between Rs 20,000 to Rs 3,000 for a night.
  • Currently serving 8 cities, Rentomojo offers rentals for furniture, motorbikes, and electronics. The website is regularly updated with new products and though the selection is limited, there are a lot of details available for each product to make an informed decision. Personal gadgets (phones, laptops) can be rented for up to 18 months while other electronic products, motorbikes, and furniture can be rented for up to 36 months. They also offer a ‘rent-to-own option — if you’ve been renting something for 12 months, you can buy and keep the product by paying the balance. Note that home appliances and furniture have to be rented for a minimum of 3 months.
  • Available in 5 cities, Rentickle offers rentals of DSLR cameras, home appliances, and furniture. Like Rentomojo, this one also offers a rental period of up to 36 months for home appliances and furniture. However, DSLRs can be rented for a maximum of 7 days only. The website supports user reviews — you can see reviews for each product before renting. The minimum rental period of home appliances and furniture is 1 month. Another useful feature of the service is that they offer the option of one free relocation of the item during the rental period.

India is being considered the fastest-growing consumer market in Asia. On a rough estimate based on multiple sources, the market for rental of furniture is seen at around $800-850 million. Rentals of electronic appliances are approximately a market of $500 million while that of bikes is $300 million. 

But a growing market means the rental companies will have an increase in clientele. Like most internet-based companies, the rental companies also follow the same approach where the owner never meets the buyer. So in order to authenticate users, KYC collection and verification are a must. But traditional forms of KYC collection can be cumbersome and require a lot of manpower, time, and infrastructure. 

With the advent of digital KYC, it is much easier to automate the KYC collection process. We at Signzy offerRealKYC. Using an AI-based approach, RealKYC not only allows users to upload their KYC information online but the system uses a host of microservices to verify the authenticity of the user and information uploaded.

The rental consumer goods economy has a huge scope in the upcoming years as the majority of the country belongs to the middle-income group with a high propensity to consume. With the public becoming more and more accustomed to internet-based products and services, the digitization of rental services has a promising future indeed.

E-KYC and VideoKYC – The New Era

Most rental companies operate via the Internet and the business model is set up in such a way that the tenant never has to meet the seller. Other than security issues, knowing the customer is important as most users pay online for their rentals. Rental/shared economy operates on a large customer base. To maintain customer data, KYC collection and verification are required. 

With the new government regulations, e-KYC collection is now an easy option for rental companies. At Signzy, we offer a unique e-KYC solution known as RealKYC. The solution offers KYC collection as well as background verification and checks.

Advantages of RealKYC:

  • Secure System: A customer’s account information is secure because the entire process is online. Identity theft, fraud, loan scams, money laundering, the flow of black money, etc. are all minimized with RealKYC.
  • Efficient Communication: Effective information can be relayed in an efficient and timely manner. There is no need for constant back and forth. Most details are published automatically unlike manual KYC.
  • ‘Free of Cost’ Process:  RealKYC verification doesn’t charge any extra amount to the customer. A company or institution may need to pay automation costs of installing verification systems for the long run.
  • Faster processing: The RealKYC service is completely automated online. This means that KYC data can be transferred in real-time without the need for any manual intervention. The paper-based KYC process can take days up to weeks to get verified, but the eKYC process takes just a few minutes to verify and issue.

At Signzy, We have also introduced a new form of KYC verification called VideoKYC. This is a faster and more efficient form of KYC collection and verification. It conducts liveliness checks against the user as well as verifies the identification document against forgeries. The VideoKYC product has gained a lot of recognition and won several awards in recent months.

Advantages of using VideoKYC:

  • Higher Application Accuracy
  • Plug and Play solution, swift Go-To-Market
  • Comprehensive Training Program
  • Competitive Advantage through customer delight
  • 100% compliant with latest RBI Mandate
  • Exponentially increase Scale of Operations
  • Reduced back office overheads (up to 70%)
  • Reduction in customer Drop-offs (up to 50%)
  • Platform Agnostic, support multiple communication channels

Conclusion

With the rapidly advancing technology, the terrain in the rental economy is changing. If companies in the sector decide to adapt to this and use the newer methods for processing and KYC, it will boost their efficiency.

Long-term reduction in costs and the increased pace of processing will attract more customers. This is primarily due to the easier KYC methods we can implement with the use of VideoKYC and other means. Thus, it is only sensible to use technology in taking hold of the future of the rental and shared economy in consumer goods.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

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