How DigiLocker could be a master stroke for 10X simpler onboarding and identification

By Rohit Taneja, Founder & CEO at Decentro

The budget of 2023 – 24 witnessed the government leverage the existing digital infrastructure to enable greater fintech adoption via DigiLocker and Aadhaar to simplify the KYC process.

Initially introduced for individuals to keep their records, Digilocker has expanded its services to small and large businesses and charitable trusts for storing and securely sharing documents online with various authorities, regulators, banks, and other business entities. This expansion has left a sense of delight within the fintech domain, as it not only leaves room for more innovation but also is deeply rooted in the ethos of financial inclusion.

Let’s delve deeper into how Digilocker can drive the above sentiments for the players in the fintech domain.

Cost Savings

One of the critical benefits of Digilocker for fintech is the reduction in operational costs associated with physical document collection and verification. Traditionally, Fintech, as an industry, relied on physical copies of documents submitted by customers for KYC purposes. This involved high costs and efforts in collecting, storing, and verifying these physical documents.

Aimed at the concept of paperless governance, Digilocker reduces administrative overhead by minimising paper use and curtailing the verification process. Issued documents available via DigiLocker are fetched directly from the issuing agency in real time. This saves costs and speeds up the KYC process, enabling fintech players to onboard customers quickly and efficiently.

Easing KYC Process

Digilocker can streamline the KYC process through integration with fintech systems. With Digilocker APIs, fintech can integrate the platform into existing workflows, making the KYC process more efficient and automated. It provides a seamless experience and supports a smoother onboarding process.

Fintechs can also retrieve specific data points from Digilocker based on the consent provided by customers, further customising the KYC process to their requirements. A provider like Decentro, through their APIs, can easily integrate with your existing user journey, making Digilocker-powered KYC a breeze.

Access to Authentic Data

In addition to cost savings, Digilocker enhances the authenticity and accuracy of customer data used for KYC. Digilocker is linked to government databases, so the documents stored in Digilocker are considered authentic and reliable. Thus, eliminating the risks associated with fake or forged documents reduces the chances of identity fraud or misrepresentation.

Furthermore, Digilocker’s integration capabilities allow fintech to verify documents in real time, reducing the risk of relying on outdated or fraudulent documents. These enhance the overall security and integrity of the KYC process, helping fintech to comply with regulatory requirements and prevent fraud.

The model has been reinventing itself, and the new Digilocker flow has also found its taker in the form of Meri Pehchaan. With Single Sign-On [SSO] running the show in multiple organisations, e.g., according to a study by Forrester on behalf of Microsoft, using SSO services provided by Azure AD could save approximately $7.1 million over three years. This enhanced version puts SSO front and center of the user journey, ensuring more flexibility and control over the user flow. With powers ranging from choosing your sign-in methods to downloading the list of self-uploaded documents to linking documents, this enhanced model has convenience dictating its entire user journey.

With 145.95 million users having used DigiLocker, and 5.62 billion documents being stored and issued till 2022, scaling this offering to the entity level, along with the push for Meri Pehchaan, is deemed a masterstroke of the existing digital infrastructure.

Right now, the need of the hour is for a fully compliant and scalable tech bridge that can thrive in this sandbox that the government has created. Decentro’s single end-point for APIs does just that while eliminating any complexities tied to KYC onboarding. Our guided efforts are channeled at expanding segment coverage, reducing turnaround times, and cutting down the operating cost of lending, allowing us to witness an era of a level playing field, innovation, and transparency of the estimated $1.3 trillion by 2025, Indian Fintech market.