IT infrastructure

Automate Customer On-Boarding Process Using AI Technologies

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Reserve Bank of India in 2016 with the circular Master Direction DBR.AML.BC.No.81/14.01.001/2015-16 (and many more updates on it) introduced the Indian Banking industry to Digital KYC/e-KYC (Know your customer). This utility was further enhanced with the Covid-19 pandemic making it near impossible to conduct physical KYC to verify all the documents.

This also coincided with the business needs of retail banks. One of the most frustrating things about opening a bank account for a digital native (millennial) was the high bar set to prove their identities. When on-boarding a new customer, there were very few options back then which could enhance the customer experience while meeting all the regulatory requirements.

The RBI circular now allowed Banking and financial institutions to digitally on-board new customers.

In banking, the more complex the product and the customer, the harder it is to create a fully online journey that meets their needs and desires. To combine customer experience with regulatory compliance there were a few details that every digital on boarding solution needed to take care of.

  1. Digital documents collection: The solution needed to read, validate, and extract data from digital documents provided by the customer and prepopulate the online application form to make things easier for the end customer/user.

This was very efficiently done by combining AI techniques. The straight through success rates and the number of accepted documents would increase as the AI algorithm learns, thus reducing the manual intervention required.

2. External Data Integration: Using APIs available from Government sources such as UIDAI (Aadhar) and verifying PAN numbers from the Income Tax databases were key to making digital on-boarding successful

3. Ensuring Data security: This could be achieved by deploying the said solution within the Banks Data Centers and under the watch of their sophisticated firewalls

Such digital on-boarding solutions brought so much more to the table than just meeting regulatory compliance. A solution from one of our partners recorded the below benefits after deploying the solution at a private sector bank.

  1. Higher application accuracy. Less human errors
  2. Reduced back-office overheads by about 70%
  3. Reduction in customer drop-offs during the KYC process by about 50%
  4. Up to 60% reduction in customer acquisition cost
  5. Up to 72% faster on-boarding per customer
  6. Exponential scale of Operations

The solution mentioned above runs on IBM Power 9 LC922/IC922/AC922 systems with RHEL. On an AC922 systems, we could process up to 80 customer queries per second.

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