Opening a savings account is one of the most important financial decisions you can make for your future. Whether for emergency funds, saving for a big purchase, or simply earning interest on your deposits, a savings account helps you achieve your financial goals. However, at the time of opening a savings account, banks require you to undergo a mandatory Know Your Customer (KYC) process to verify your identity and address.

Traditionally, this process has been lengthy and time-consuming, where you have to submit physical copies of your documents and wait for days for the verification process to complete. But the e-KYC process that uses a One-Time Password (OTP) has changed the standard KYC process, making it faster, more secure, and hassle-free. With OTP-based e-KYC, you only need your mobile phone and Aadhaar card details to open a savings account in just a few clicks.

The benefits don't end there. Discussed below are multiple benefits that come with using OTP-based e-KYC to open a savings account.

  • Paperless process

    This process eliminates the need for physical documents, reducing paper consumption and saving trees. Banks can contribute to a greener and more sustainable ecosystem by replacing traditional document-intensive processes. Also, customers do not need to physically store or carry important documents, such as Aadhaar card and PAN card, which can be inconvenient and risky.

    OTP-based e-KYC helps banks comply with regulations while making the account opening process quicker and more efficient.

  • Accessibility

    OTP-based e-KYC helps individuals open different types of savings accounts from the comfort of their home, office, or anywhere else. The only requirement is a mobile phone, internet connection, and Aadhaar card details. This is especially beneficial for those living in remote areas or those with limited mobility, allowing more individuals to save and invest in their financial future.

  • Cost-effective

    The traditional process of opening bank savings accounts involves manual documentation and labour-intensive processes, resulting in higher operational costs for banks. By adopting OTP-based e-KYC technology, banks can eliminate the need for physical documentation, streamline their operations, and reduce costs. These savings can be transferred to customers in the form of better interest rates and reduced fees.

  • Security

    By sending a one-time password to the customer's registered mobile number, this method adds an extra layer of security to the account opening process. This additional security measure ensures the authenticity of the customer's identity, helping prevent identity theft and fraud.

    This secure process also helps customers compare savings accounts and confidently start the process with one offering better interest rates, low fees, and valuable features without worrying about the safety of their personal data.

  • Customer satisfaction

    OTP-based e-KYC helps customers complete the verification process quickly and easily, avoiding the need for long wait times or complicated paperwork. The process is transparent and quick, making it easy for customers to open a new bank account without any hassle.

    The validity and accuracy of the customer's information are easily verified through an OTP, leading to quicker processing times. This, in turn, leads to happier customers who appreciate the efficiency of the service.

Final word

With more transparency and accessibility to improved accuracy and a paperless process, OTP-based e-KYC offers unmatched convenience and security to both banks and customers. The benefits of this technology go beyond streamlined processes; it also reduces costs associated with manual documentation, enhances data protection, and improves customer experience. With these benefits, OTP-based e-KYC makes banking hassle-free and accessible to all.

Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.