A year ago, in this newspaper I said 2018 would be the year of paperless finance. This year, a large number of banks have partnered with fintechs and have launched instant paperless approval of loans and credit cards. However, our job is half done. There remains a roadblock to fully digitised, secure finance where consumers can purchase financial products on their phones without submitting a shred of paper or having a face-to-face meeting with the bank.
The roadblock is the in-person verification of KYC (know-your-client) requirements for loans above ₹60,000 or credit cards. In 2018, while the financial industry has moved to electronic processing of applications, income documents, e-signatures and electronic repayment mandates, banks still need to meet you to physically complete your KYC through countersigned documents or biometric. Resultantly, the benefits of secure digital mobile delivery are curtailed in three ways: a) the industry’s reach is limited to branch locations, b) operation costs increase due to physical meetings, and c) the risk of documentation fraud remains as no e-authentication process exists for physical KYC documents other than for Aadhaar.