Winning Bizness Desk
Mumbai. The Unique Identification Authority of India (UIDAI) is planning to simplify the Aadhaar-based Know Your Customer (KYC) process. The goal is to make it more secure, privacy-friendly, and convenient for users. Under the upcoming changes, users will no longer need to share their Aadhaar number or other personal details for verification while using services such as banking, telecom, insurance, or fintech platforms.
Aadhaar Number Not Required
Instead of sharing the 12-digit Aadhaar number or sensitive personal information, users will soon be able to complete their KYC using a QR code or a downloadable PDF format. According to UIDAI, this will strengthen data privacy and make the process quicker and simpler. The new system will eliminate the need for biometric authentication or one-time passwords (OTPs).
How the New Format Will Work
UIDAI will issue secure QR codes and PDF files that can be shared digitally through a phone or computer. Service providers like banks or fintech firms will be able to scan the QR code or read the PDF to verify the user’s identity. Since this method avoids sharing actual Aadhaar numbers, it adds an extra layer of security and control for users.
More Convenience for Rural Users
The new approach will especially benefit people in remote or rural areas where biometric systems or OTPs are hard to access. With QR code and PDF-based KYC, services like bank account opening, insurance sign-ups, and other verifications can be done more easily. Faster onboarding of customers is also expected to help banks and fintech companies improve service delivery.
Addressing Old KYC Challenges
The older offline KYC system had several issues, including illegal practices by some startups and concerns over data leaks. The earlier method also required the use of XML files, which were complex and harder to manage. By replacing XML with more user-friendly QR codes and PDFs, UIDAI aims to bring both simplicity and security into the KYC process.
7 Key Takeaways:
- UIDAI is working on a new Aadhaar-based KYC system.
- Users won't need to share Aadhaar numbers or personal details.
- QR code and PDF formats will be used for verification.
- No need for biometric or OTP authentication.
- The system will be easier to use in rural or remote areas.
- Banks and fintechs will benefit from faster customer onboarding.
- Older KYC problems like data leaks and complex XML use will be resolved.
