Here’s what the Supreme Court’s Aadhaar Verdict means for Private companies.
Organizations that embrace technology and upgrade their authentication processes will survive and prosper in the long run. Large parts of the onboarding processes can be automated while catching more fraud than before.
Fair point.
But, what now of companies that have depended on Aadhaar for eKYC? Fintechs, for example. How can they now be expected to meet Government norms and still keep their verification costs low enough to remain in business?
There’s a chance that the government may bring in new legislation to allow Aadhaar-based authentication by certain private enterprises for specific purposes, the Fintech industry included. However, this too may be challenged in court putting this matter in limbo.
Whichever way the wind blows, it’s clear that matters around Aadhaar eKYC will remain unclear in the near to medium term. During this time KYC norms need to continue to be met.
Supreme Court’s Aadhaar verdict: The way forward?
Turn to basics
Earlier KYC directives provide us with the basic principles that underlie KYC. It’s important to understand them. Enterprises can create and follow their own procedures for KYC based on the nature of their business, while in-principle meeting government mandates.
Turn to technology
It’s obvious that regulators will continue to require certified OVDs (Officially Valid Documents) like ID proof and address proof. They will also need a recent photograph of the individual.
There’s enough data available on public sources on individuals. And all the technology to be able to reference and cross-reference them to verify them.
Organizations that embrace technology and upgrade their authentication processes will survive and prosper in the long run. Large parts of the onboarding processes can be automated while catching more fraud than before.