Know Your Creator: The evolution of KYC from checkbox to disruptor

In India, the three most scary words for businesses these days are: "Know. Your. Customer." From just a regulatory check, KYC has morphed into an existential question and threat to businesses ranging from large telcos to small fintech startups. How did this happen?

Companies are aggressively turning away new customers and pushing existing ones over KYC. This is unprecedented.

KYC's rise in importance mirrors that of Aadhaar, India's unique ID project

Multiple strands are coming together to form the perfect KYC storm - Aadhaar, universal banking, new financial entities like wallets and payments banks

Companies are now spending unprecedented amounts of money to ensure that all of their customers are Aadhaar KYC-compliant, a process that for many will repeat each year

KYC, or Know Your Customer, has been a part of banking and telecom lexicon for many years in India. But it was only towards the end of 2016 that it started to shed its earlier skin of being just a simple regulatory requirement. And to grow into its new skin as a maker or breaker of business fortunes.

The first indication came on 1 December 2016, when Reliance Jio, the latest entrant into India’s crowded and ultra-competitive mobile telephony space, announced it had signed up 50 million new customers in just 83 days. That would be record-worthy growth for any new app or internet service, but here, Jio was a telecom operator which was signing up people physically in a large country like India.

AUTHOR

Shashidhar KJ

Shashidhar has been a journalist for over six years and has worked with The Times of India, The Financial Express and MediaNama, his last assignment. He is a fine bloke, and by that, I mean unusually quiet. Over the years, Shashidhar has written on several subjects. Banking, startups and technology, media, and also financial technology. He started his career on the desk at the old lady of Boribunder. At The Ken, Shashidhar works out of Mumbai and writes on telecom and financial technology. What he really wants to talk about though is his vinyl collection.

View Full Profile

Others tell you what. We tell you the ‘So What?’

Read articles that decode the most significant shifts happening around business, technology, startups and healthcare. 1000+ articles for subscribers of the India edition. 150+ articles for subscribers of the Southeast Asia edition. Plus premium newsletters that help you make sense of the world around you.

So much journalism in India is superficial.

Articles are generic, almost cookie-cutter in their approach. And they don’t provide enough context on the issues they cover. The Ken is different. I don’t always agree with everything they say but I appreciate their commitment to publishing deeply reported narratives and investigations. Their reporters find new ways to analyze tech among other industries. And that’s always worth a read.

Sid Talwar / Co-Founder and Partner / Lightbox Venture Capital

As entrepreneurs, we thrive on being in the know at all times.

A personal subscription to The Ken was a no brainer. But as startup founders, this isn't enough. Team members also need to be in the know, for everyone handles customer-facing responsibilities and an ecosystem change that impacts customers also impacts us

Kiran Jonnalagadda / Co-founder / HasGeek and Internet Freedom Foundation