“The Aadhaar XML journey has many steps including obtaining an OTP (one-time password), selecting a range of permissions and downloading the XML file before actually using it as an ID. Such a journey is extremely complicated,” said Ashok Hariharan, chief executive, IDfy, a Mumbai-based tech startup that provides authentication services.
“Presented with a choice, most users would prefer to use other ID cards rather than Aadhaar at this point,” he added
Here’s our analysis of Aadhaar XML and Video KYC
- Digital Journey – Aadhaar XML is likely to be included as an officially valid document (OVD) alongside Voter ID, DL, PAN, Passport, etc. An XML file is digital by definition so this is an attempt to create a completely digital journey (ekyc). This is definitely a step forward in thinking, as physical KYC incurs costs due to personnel, and managing paper and also makes onboarding really slow (7 to 10 days instead of minutes)
- Other ID cards – The spirit of the Supreme Court Aadhaar verdict is that users presenting other ID cards should not be discouraged. It is not clear if a similar approach to digitization would apply to other ID cards. This would require RBI to recognize that photographs of ID cards are the equivalent of photocopies (something the Information Technology Act already recognizes)
- Complicated User Journey – The Aadhaar ekyc XML journey has many steps including obtaining an OTP, selecting a range of permissions, and downloading the XML file before actually using it as an ID. Such a journey is extremely complicated even for the most technologically advanced users. Presented with a choice, most users would prefer to use other ID cards rather than Aadhaar at this point
- Customer Drop-Offs – Less than 30% of the population has their phone number linked to UIDAI, (as many Indians keep changing phone numbers and the task of updating phone numbers on UIDAI is very complicated). Therefore most of the population won’t even receive the OTP that is necessary to download their Aadhaar XML file for ekyc
- Leakage and ID fraud issues – In a business correspondent (BC) journey, the XML would have to be uploaded by the BC which means that the user will pass the XML file to the BC, and also provide his password. This allows for the leakage of the XML to others. In case XML is to be accepted as a means for verification, face match, and face liveness should become de-facto ways of authenticating the presence of the end-user
- Digital Signatures – A crucial part of using an OVD today is for an authorized officer of the Regulated Entity to sign it. If this signature were to remain a wet signature, one would still need photocopies. In order to digitize completely, RBI has to recognize that a digital signature (using digital certificates) is the equivalent of a physical signature (just as the Information Technology Act does)
To find out about IDfy’s Digital KYC Solutions, email shivani@idfy.com