By Arpit Ratan, Co-founder & CBO, Signzy
Is there an end to the telegraph era of 1885? With the new Telecommunication Act 2024 making waves in the media, we are ready to welcome the innovation and tech that roll out with it. Entering a tech-driven future where enhanced user protection, purpose-driven innovation, and robust connectivity through KYC solutions would be the norm for seamless customer journeys, it’s time to take a step ahead and be a part of this innovation.
Set to modernise century-old regulations through the introduction of Know Your Customer (KYC) norms, this legislative shift signals a departure from historical constraints. Crafted in a bygone era, these outdated laws are poised to make way for a regulatory framework aligned with the rapid evolution of technology, potentially opening Pandora’s box of transformative possibilities. The recent passage of the Telecommunications Act 2023 further highlights this transformation, mandating KYC processes for all telecommunication services, including internet-based platforms like WhatsApp, Gmail, and Slack. This forward-looking approach reflects a comprehensive strategy to adapt regulations to the changing nature of communication in the digital age.
The latest & Telecom Act 2023 has expanded its mandate to include user authentication across traditional phone conversations, SMS, and internet-based platforms, which is a significant step toward enhancing cybersecurity and maintaining the integrity of communication channels. This transformation aims to curb spam, fraud, and misuse of communication channels, impacting messaging apps, email, online platforms, and startups alike. As the country accepts this change, it is clear that the Telecom Act of 2023 is more than just a legislative update; it is a visionary answer to the developing problems of the digital landscape.
Traditionally, ‘User Verification’ has been a key component of telecommunications regulations, primarily focusing on voice calls and text messages. However, the proliferation of internet-based communication platforms necessitated an update to the existing norms. The Telecom Act’s extension of KYC norms to encompass internet-based platforms reflects the evolving nature of communication and the imperative to address emerging challenges. The broadened scope of the Act is not only a measure to enhance security but also a strategic move to empower companies with verified user data. By requiring stringent user verification, the Act provides companies with a reliable database, paving the way for personalised marketing services and a streamlined user experience. This transition is expected to benefit businesses by reducing the risks of fraud and delivering a more secure digital environment.
Furthermore, the Telecom Act’s positive potential extends beyond individual companies to the entire digital landscape of India. The act empowers the government to proactively address challenges in the rapidly evolving digital space. The mandatory authorisation requirement ensures that reliable and secure services are accessible to all users, building a trustworthy digital ecosystem.
The establishment of a clear and comprehensive regulatory framework through the Telecom Act is crucial for nurturing confidence and attracting investment. The streamlined authorisation processes provided by the Act can empower smaller players in the sector, preparing for greater competition and inclusivity. Standardised regulations catalyze a level playing field, ensuring that all participants adhere to the same set of rules, and fostering fair competition. However, the implementation of robust KYC norms is not without its challenges. Addressing ‘privacy concerns’ and ensuring ‘equitable access to KYC infrastructure’ are crucial aspects that need careful consideration. The overlap with existing laws and regulations necessitates a nuanced approach to strike the right balance between security measures and safeguarding user privacy.
In the context of the expanded KYC norms mandated by the act, cutting-edge solutions become increasingly crucial in overcoming these challenges. Innovative platforms, leveraging advanced technologies such as AI-enabled Video KYC, play a pivotal role in ensuring a seamless and secure verification process. These solutions accelerate customer onboarding processes by significant multiples, contributing to the overall goal of creating a secure and efficient digital environment.
These cutting-edge technologies address the aforementioned challenges by enabling real-time identity checks. This aligns seamlessly with the broader vision of the Telecom Act, which seeks to enhance security and curb fraudulent activities without compromising user privacy. As financial institutions and businesses embrace these advanced solutions, they can navigate the complexities of KYC compliance with greater ease and efficiency. This, in turn, reinforces the positive impact of the Telecom Act on the digital landscape, emphasising the symbiotic relationship between regulatory frameworks and innovative technological solutions.
What’s the way forward?
As India strides forward in the digital realm, the Telecom Act serves as a pivotal tool for creating a secure, inclusive, and innovative digital future. Striking a delicate balance between security concerns and user privacy will be imperative. In doing so, the regulatory framework can lead to a healthy innovation ecosystem, ensuring that India’s digital landscape continues to thrive and adapt to emerging challenges.