DigiLocker – The Rise of a Paperless India

The Business Case

Out of the many use cases for a paperless process, digital customer onboarding is a compelling use case where a company can reap immediate benefits by lowering the number of customer dropouts during the account opening process and reduce the Turn Around Time with immediate access to verified documents.

One can categorize the fields that need to be captured during the account opening process into 3 primary sections

  1. KYC and personal information
  2. Documentary proof like income or bank statements to support the application form
  3. Product, plan or scheme selection

While we want the customer to spend more time in exploring the benefits of the product and making an informed choice, the reality is that the customer spends 80% of the time filling up KYC information and submitting documentary proof. What if, all this information and documents could be retrieved from a digital locker of the customer? It would change the onboarding process to a delightful customer experience.

On initiating a new application form, the company would request access to a customer’s digital records and fetch all information required for the process, which includes Proof of Identity, Proof of Address, Income Proof and more. With the consent of the customer, most of the fields in the application form could be auto filled. What remains is only the product selection and a few declarations that need to be provided by the customer. 

This onboarding process can now be achieved by integrating the onboarding process with DigiLocker – A Government of India initiative. Beyond saving time during the onboarding process, these documents are also verified documents and do not need any additional scrutiny. The below diagram shows a sample flow to retrieve a customer’s PAN card details.

What is DigiLocker?

A decade ago, the Government of India initiated an ambitious project named IndiaStack to realise the vision of a Digital India. The stack provides 4 digital layers i.e. presenceless layer, paperless layer, cashless layer and consent layer. Since the inception of IndiaStack, various projects were launched with mixed adoption levels. Some initiatives like the Aadhaar and UPI are now used by every citizen in the country, and there are other promising projects that are not very popular yet. One such promising initiative is the DigiLocker, a service to retrieve, store and share verified digital documents.

Aimed at creating a paperless layer, the DigiLocker was rolled out in 2015. By definition, DigiLocker is a platform for issuance and verification of documents and certificates in a digital format. Simply put, an individual’s certificates and important documents can be retrieved and shared from DigiLocker. You do not need to carry your PAN card or driving license in physical format anymore. You could simply access and share these documents from the DigiLocker mobile or web application. As of October 2020, there are 48.42 million registered users on DigiLocker. 

Each month the number of authorities issuing documents on DigiLocker keep increasing. As of today, there are about 500 document types that can be accessed and shared from the application. A complete list of all document types available in DigiLocker can be viewed on https://digilocker.gov.in/public/dashboard. Organizations that issue the documents range from central government, state government, banking and insurance, education department and health. This means that one can access documents like educational degrees, income tax documents, driving license, vehicle registration, pension card to insurance policies from one single app. With more issuers joining the ecosystem, the day is not too far when every issued Indian document will be available in a digital format on this platform.

There are 3 main participants in the ecosystem.

  1. Issuer – An organization that issues documents in a digital format i.e. Income Tax department issuing a PAN card
  2. Citizen – An Indian citizen who can retrieve the documents from the platform and share it with entities that need access to the document.
  3. Requestor – An organization that is requesting access to a citizen’s document.

To achieve mass adoption, the issuers need to come on to the platform first. With 500 document types available, it is already on the path to having most document types available on the platform. Followed by the citizens who enroll and access the documents and lastly the requestors who can then request these documents to streamline their business processes.

Amit Ranjan, Key Architect of DigiLocker says “DigiLocker’s applicability was notified by Indian financial sector regulators (like RBI, SEBI) in 2019. Ever since, many BFSIs, NBFCs and Fintech startups etc have integrated DigiLocker in their user onboarding, or digital KYC workflows. The platform’s usage is growing exponentially in the financial sector after this development.”

Unified Account Opening

Unified Account Opening is a platform to digitally onboard customers with one smart form and instantly activate their trading accounts, bank accounts, loan accounts or insurance accounts. The platform already integrates with central KYC registries like KRA and CKYC to access a customer’s KYC information and auto fill the application form. A few of the drawbacks of KYC registries are

  1. You can access only KYC information
  2. No access to documents in real-time
  3. Integration required with multiple registries
  4. No data available for new to finance customers i.e. who are opening a bank account for the first time.

We have recently added the capability to access documents from DigiLocker as part of the account opening process. The growing popularity of DigiLocker amongst citizens and more issuer documents being available, allows the onboarding process to auto fill most of the information from issuing authorities, making it very convenient to the customer.

Praveen Paulose – MD & CEO at Celusion says “We are constantly reviewing and analysing the digital onboarding process implemented for our enterprise customers and looking for innovative ways to improve the process. Once DigiLocker achieves the popularity that Aadhaar has amongst citizens, the current tedious process of filling online forms will transform to a simple and delightful customer experience.”

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