Getting to properly know people is great; it’s how you work out if you can get along well with the other party. It’s also a really important part of business for many industries, such as property and finance.
All those sign-up sheets and forms we have to fill out to get things like a housing loan, they’re all at the most simple level about knowing your customer (KYC).
That KYC process can have some big implications for banks, businesses, and applicants.
KYC verification is about an institution getting the information they need to verify if a customer is who they say they are, if they are trustworthy, and link to other records for assessment. When you’re talking about things like financial products, that’s kind of important!
Now electronic know your customer (e-KYC) is helping smooth over that process in Malaysia, hopefully leading to improved approval processes that could help your property journey… and even potentially save you time and money.
Getting To Know e-KYC
Bank Negara Malaysia released e-KYC policies and guidelines in 2020, providing an important step to improve financial onboarding processes.
Every time you apply for a loan, try to open a bank account, or want to engage with any other financial product, the bank has to go through a lengthy process of verifying who you are and whether you’re real.
That might sound sort of annoying, but it’s an essential part of stopping major types of fraud. If they didn’t know who you were for example, you could apply for a home loan under someone else’s name, and run off with the money.
Then the poor person you’ve impersonated is potentially stuck with a massive debt! We’re sure that we can all agree, banks knowing EXACTLY who they are dealing with is very important.
What e-KYC does is provide an agreed digital way – such as a video call, record matching, or biometrics – to quickly and securely verify that identity.
This advanced digital ID process has big implications for financial institutions, as well as their customers like you and the rest of us!
The Benefits Of e-KYC For You
If it all sounds a bit like boring administration at this point, well how about considering this: e-KYC is designed to improve processes, saving banks’ money, and potentially making housing loans and other financial products more affordable and accessible for you.
Sounds a bit better now, doesn’t it?
One study indicates that e-KYC could reduce the cost of onboarding new customers by up to 90%, plus helping as many as 1.7 billion Malaysians to access banking for the first time.
Those changes could have a direct impact on your own financial costs. If banks are saving money onboarding customers, then the chances are the overall cost of their products can be adjusted down.
That’s just common sense – they want to stay competitive, their costs are falling, so they reduce the cost of products to attract a bigger share of the market.
Apart from those knock-on financial benefits, e-KYC just kind of makes things easier! Having a secure, digital way to apply for financial products is way more convenient than filling out 10,000 forms and standing in line at a bank.
As if it wasn’t boring before, standing in a bank queue now sounds even more anxiety-inducing! Imagine this: What if we’re not even allowed to go to the bank? Well, digital solutions are sort of handy in that regard!
The easier a process is, the more opportunity you’ve got to find the right one for you in a convenient and user-friendly way. That’s as true for a housing loan application as it is for a boring old bank account.
Digital ID and e-KYC doesn’t eliminate the need for verification, it just makes everything so much easier.
The Bank Negara Malaysia framework sets out how and when financial institutions can do this, then it’s just up to the institution to implement the system in line with that. Customers can then benefit from digital opportunities in our increasingly digital-first environment.
It’s not just housing loan applications where the property industry can benefit. Digital verification through e-KYC could also improve processes in other key parts of the industry.
Imagine an e-KYC process that is able to verify the identity of both parties, in the rental market as part of a tenancy agreement.
Think about e-KYC for housing insurance that gets your property protected through a simple digital application. Or e-KYC for renting a penguin for your next house party! That last one probably won’t happen, sorry.
At the heart of it all, e-KYC is about making things easier for both businesses and their customers.
Businesses enjoy improved processes, reduced resource commitments, and hopefully lower costs. Customers enjoy a smoother process that’s more convenient, and potentially more accessible.
When it comes to the housing loan itself, you’re still going to have to show the financial resources to make the payments of your requested loan.
But when it comes to an application, we should all benefit from a little more easy-travelling in the future!
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