Video KYC at Scale: How Fintechs Process Thousands of Verifications Daily

Why Video KYC Exists

When a customer opens a Fixed Deposit with a bank they've never used before — what regulators call a "New-to-Bank" (NTB) customer — RBI's KYC Master Direction requires the bank to verify the customer's identity through Video KYC.

This makes sense. You're opening a deposit account remotely, without visiting a branch. The bank needs to confirm you are who your PAN and Aadhaar say you are. VKYC is the digital equivalent of the branch manager verifying your identity in person.

But implementing VKYC at scale — across multiple banks, for thousands of FD bookings daily — is one of the most technically challenging aspects of digital deposit distribution.

The Four KYC Methods Under RBI's Framework

RBI's KYC Master Direction (2016, updated 2023) permits four methods for customer identity verification in digital financial services:

| Method | How It Works | When Used | |--------|-------------|-----------| | Aadhaar eKYC | OTP-based verification through UIDAI. Customer enters Aadhaar, receives OTP, verifies. | Primary KYC for most bank FD bookings | | CKYC | Central KYC Registry lookup. If the customer has completed KYC with any financial institution, records can be fetched from CERSAI. | Bajaj Finance, Shriram Finance, and as fallback | | Video KYC (VKYC) | Live video call with bank representative who verifies identity documents and liveness. | Required for NTB customers above bank-specific thresholds | | DigiLocker | Government document verification via DigiLocker platform. PAN and Aadhaar documents pulled digitally. | Shriram Finance (Aadhaar + PAN verification) |

Most FD booking flows use Aadhaar eKYC as the primary method and VKYC as a subsequent verification for NTB customers. The eKYC establishes initial identity; VKYC adds the liveness and document verification layer.

VKYC Thresholds: When Is It Required?

Not every FD booking requires VKYC. Each bank sets its own threshold — the FD amount above which VKYC becomes mandatory for NTB customers.

| Bank | VKYC Threshold | Practical Impact | |------|---------------|-----------------| | Unity SFB | Rs 1,000 | Effectively mandatory for all FDs | | Suryoday SFB | Rs 90,000 | Required for most meaningful deposits | | Shivalik SFB | Rs 90,000 | Standard threshold | | Utkarsh SFB | Rs 90,000 | Standard threshold | | IndusInd Bank | Rs 90,000 | Standard threshold | | South Indian Bank | Rs 90,000 | Standard threshold | | NBFCs (Bajaj, Mahindra, Shriram) | N/A | VKYC not required |

The variation matters. Unity SFB's Rs 1,000 threshold means virtually every FD booking triggers VKYC — creating significantly more verification volume compared to banks with a Rs 90,000 threshold.

For NBFC FDs, VKYC is generally not required, making the booking flow shorter and conversion rates typically higher.

The VKYC Process Flow

A well-implemented VKYC flow follows this sequence:

Step 1: FD Payment Completed

The customer has completed eKYC, selected their FD, and made payment. The FD is in a "pending VKYC" state.

Step 2: VKYC Scheduling

Within a 72-hour window after payment, the customer must schedule and complete a video call. The system:

• Presents available time slots
• Books the appointment
• Sends calendar reminders (SMS, push notification, email)

Step 3: Pre-VKYC Preparation

Before the call, the system:

• Verifies camera and microphone permissions
• Tests network quality
• Confirms the customer has their original PAN card and Aadhaar card physically available
• Provides guidance on lighting and background

Step 4: The Video Call

A bank representative connects with the customer via video. During the 5-10 minute call:

• The representative verifies the customer's face against their Aadhaar/PAN photo
• The customer shows their original PAN and Aadhaar documents to the camera
• The representative may ask identifying questions
• Liveness checks are performed (blink, turn head, show document at different angles)

Step 5: Post-VKYC Processing

• If approved: FD is activated, customer receives confirmation
• If failed: Customer can retry within the 72-hour window
• If expired (72 hours): FD is cancelled, payment refunded

The 11-State VKYC Machine

At the infrastructure level, VKYC is managed through a state machine with 11 states:

INITIATED → SCHEDULED → IN_PROGRESS → COMPLETED
                                     → FAILED → RESCHEDULED
                                     → EXPIRED
         → CANCELLED
         → ON_HOLD
         → PENDING_REVIEW
         → REJECTED

Each state transition triggers specific actions — notifications to the customer, status updates to the partner app, webhook events to the distribution platform, and audit trail entries.

Scale Challenges

1. Concurrent Sessions

During peak hours (typically 10 AM - 2 PM and 6 PM - 9 PM), hundreds of VKYC sessions may be active simultaneously across all partner platforms. Each session requires:

• A dedicated bank representative
• A stable video connection
• Real-time document verification capability
• Session recording for audit purposes

Banks manage VKYC capacity as a staffed operation. If demand exceeds capacity, customers wait in queues — which hurts conversion.

2. Dropout Reduction

VKYC is the single largest dropout point in the digital FD booking journey. Common dropout reasons:

| Dropout Reason | Frequency | Mitigation | |---------------|-----------|-----------| | User doesn't schedule within 72 hours | High | Aggressive reminder sequence (2hr, 24hr, 48hr, 66hr) | | Camera permission denied | Medium | Pre-flight check with clear instructions before VKYC page | | Poor network quality | Medium | Bandwidth check before session, fallback to audio verification | | User doesn't have physical documents ready | Medium | Pre-session checklist, document guidance | | Session fails (technical issue) | Low-Medium | Automatic reschedule, retry within window | | User gives up (too complex/long) | Medium | Streamlined flow, realistic time expectation setting |

Platforms that actively manage VKYC dropout see significantly higher completion rates. The key levers are:

• Pre-session preparation: Camera check, document checklist, network test
• Reminder cadence: Multiple touchpoints before the 72-hour deadline
• Retry flows: Easy rescheduling if the first attempt fails
• Time slot optimization: Offering slots when bank representative availability is highest

3. Multi-Bank Coordination

Each bank manages its own VKYC operation. Some use in-house teams, others use third-party verification services. The VKYC integration is different for each bank:

• Unity SFB: Bank-managed VKYC with API-based scheduling
• Suryoday SFB: Third-party VKYC service with redirect flow
• IndusInd Bank: In-house VKYC team with direct integration

An infrastructure platform must normalize these different VKYC implementations behind a single, consistent user experience across all bank issuers.

PAN-Aadhaar Linking: The Prerequisite

Before VKYC, PAN must be linked to Aadhaar (an Income Tax Department requirement). During the FD booking flow:

1. PAN is verified against NSDL/UTIITSL databases
2. Aadhaar eKYC is completed (OTP verification via UIDAI)
3. PAN-Aadhaar linking status is checked
4. If not linked, the user is guided to complete linking (this can be a dropout point)

Senior citizen status is also detected at the PAN verification stage — the date of birth from PAN determines whether the customer qualifies for higher senior citizen FD rates.

Consent Management: The Regulatory Foundation

Every KYC step requires explicit, informed consent from the customer. RBI mandates:

| Consent Point | What Must Be Disclosed | |--------------|----------------------| | Aadhaar eKYC | Purpose of verification, what data will be accessed, who receives it | | PAN verification | Why PAN is being verified, data usage | | VKYC session | Recording consent, data retention policy, identity of verifying entity | | Data sharing | What customer data is shared with the issuer bank |

Consent records must be maintained with full audit trails: timestamp, exact consent text shown, and the method of acceptance. These records must be available for regulatory review.

Building a Unified KYC Engine

For platforms handling FD distribution across 10+ banks, the architectural approach is a unified KYC engine that:

1. Abstracts bank-specific flows: Each bank's KYC requirements are configured, not coded. Adding a new bank means adding a configuration — not building a new KYC flow.

2. Handles method routing: Based on the selected issuer, the engine routes to the correct KYC method (Aadhaar eKYC → CKYC lookup → VKYC scheduling).

3. Manages state across methods: The customer's KYC state is tracked across all verification steps. If eKYC succeeds but VKYC fails, the system knows exactly where to resume.

4. Maintains compliance: Consent capture, audit trails, data handling, and retention policies are managed at the engine level — not per-bank.

5. Optimizes for conversion: Pre-flight checks, smart reminders, retry flows, and progress indicators are built into the engine to minimize dropout.

What This Means for Fintechs

If you're building FD distribution, KYC infrastructure — and specifically VKYC — is the most complex component. It requires:

• Integration with UIDAI (Aadhaar), NSDL (PAN), and CERSAI (CKYC)
• Video infrastructure for VKYC sessions
• Consent management framework
• Multi-bank flow configuration
• Dropout reduction systems
• Audit trail and compliance reporting

This is where the build-vs-buy decision often tips decisively toward platforms. A KYC engine that handles all four methods across 10+ banks, with built-in compliance and dropout optimization, is years of engineering work.

For fintech distribution partners, the goal is simple: the end user completes KYC seamlessly, and the platform's brand remains front and center throughout. The complexity of multi-method, multi-bank KYC is entirely abstracted away.

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Blostem's KYC engine handles PAN, Aadhaar eKYC, CKYC, and Video KYC across all partner banks — with consent management and audit trails built in. Learn more.