Masking KYC identifiers will help protect customer privacy by reducing the amount of personal information that is exposed, say experts.
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In a move that provides relief to financial institutions, the Central KYC Records Registry has extended the deadline for masking Know Your Customer (KYC) documents to January 20 next year. The original deadline, which expired on December 16, had raised concerns among banks and fintech companies, who cited insufficient time for implementation. The extension comes after multiple requests from these institutions seeking more time to comply with the updated KYC requirements.
“In view of requests received from various reporting entities, it has been decided to defer the date of go live for masking of KYC Identifier from December 16, 2024, after 8:00 pm to January 20, 2025, after 8:00 pm,” said the Central KYC Records Registry in a circular.
The Central KYC Records Registry has proposed masking KYC identifiers to improve data security and privacy. Under the change, full KYC identifiers, such as PAN numbers, will no longer be visible in search results and responses. Instead, only the last four digits will be displayed in a masked format. This measure aims to safeguard sensitive customer information and minimize the risk of data breaches.
“The current systems of the financial institutions need to be updated to adapt to the new format of incoming information, where certain details, like KYC identifiers, will be masked. This means the system must be capable of processing and ingesting such information seamlessly to ensure business operations continue smoothly,” said Rishi Agrawal CEO and co-founder of Teamlease Regtech.
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Sources say that while bigger entities have the resources to make the required changes, smaller and mid-size companies are struggling to update their systems. Masking KYC identifiers will help protect customer privacy by reducing the amount of personal information that is exposed, say experts.
“Masking KYC identifiers makes it more difficult for unauthorised individuals to access sensitive customer information,” said Agrawal.
Companies will need to update their systems to accommodate the masked KYC identifiers, including modifying search and download processes to use the masked versions instead of full identifiers. Additionally, they will need to implement procedures for verifying customer identities using masked identifiers.
