Identity fraud is on the rise globally. To avert the dangers of this risk, businesses across industries need to be vigilant and conduct thorough identity verification, with no scope for errors or misrepresentation. If the identities of people involved viz., employees, customers, vendors, and other stakeholders, are not verified properly, businesses could suffer from security breaches, financial losses, regulatory penalties, and reputational damage.

In India, Aadhaar serves as a trusted tool to weed out duplicate and fake identities.  The Aadhaar card is a unique and potent document that enables cost-effective, smooth, and secure onboarding. But accessing and verifying the validity of Aadhaar cards from the UIDAI (Unique Identification Authority of India) server is not an easy task. Their security policies and other stringent protocols limit access to the UIDAI database.

This is where AUA/KUA comes in as a robust and foolproof solution for accessing the Aadhaar database effortlessly and verifying identities swiftly.

So, what is AUA and KUA?  Let us break it down for you.

What is AUA?

Acronym for Authentication User Agency, AUA is a license given to a regulated entity authorized by UIDAI. The license enables businesses to use OTP and biometric-based Aadhaar authentication to verify the identities of the customer, employee, or any stakeholder. The verification response is not too elaborate. Only a ‘Yes’ or ‘No’ response is documented.

The AUA license is versatile enough to benefit government institutions that disburse benefits and financial institutes that onboard customers or employees. It is important to note that AUAs are liable for the authentication process and the security and integrity of Aadhaar data.

How AUA helps verify identity?

When an authentication request is raised, AUA passes the request to the Authentication Server Agency (ASA) who then passes the request to the CIDR database of UIDAI. The OTP/biometric data provided by AUA is matched here on a real-time basis. The response (Yes / No) is pushed back to AUA from UIDAI via the ASA.

To verify an identity, AUAs liaise with multiple Authentication Services Agencies (ASAs), which are entities that maintain secure leased line access with the UIDAI database.

AUA and Sub AUA

Sometimes the AUA sends authentication requests from other entities named “Sub AUAs,” which is responsible for offering authentication services to customers on behalf of the AUA. The UIDAI directly authorizes the AUAs to use the Aadhaar system, while an AUA authorizes sub-AUAs to perform the authentication using the AUA route by sub-licensing it to Sub-AUA. The Sub-AUA will not have to maintain the entire infrastructure and compliance as per UIDAI compliance. AUA will handle those.

Following the Aadhaar authentication, KYC authentication of customers is performed using KUA.

What is KUA?

Acronym for KYC User Agency, the KUA fetches the KYC details from the UIDAI server. The KYC checks are carried out in the UIDAI server by collecting Aadhaar Number and OTP / Biometrics (Fingerprint / Iris / Face). The response will contain data of customers viz., name, gender, date of birth, address, and photograph. The KYC request is sent from KUA through (KYC Services Agency) KSA to UIDAI.

Businesses across industries must acquire an AUA/KUA license to upgrade their onboarding capabilities. The license ensures an additional layer of protection against fraud. Today, NBFCs are also eligible to apply for AUA/KUA licenses alongside RBI, SEBI, IRDA, and government-regulated businesses.

Why do businesses need AUA/KUA?

AUA/KUA license assures speed, accuracy, and security of identity verification and KYC checks. Here are a few more reasons why your business requires AUA/KUA license.

• Cuts costs associated with the manual, in-person document verification
• Enables streamlined verification procedures
• Ensures onboarding experience is smooth and seamless
• Protects data using cutting-edge security
• Reduces the danger of identity fraud and other security breaches
• Boosts customer/employee trust, as identity verification and data are safe
• Simplifies and eases user journey as the verification happens in an instant

Challenges in acquiring AUA/KUA license

As we already discussed above, acquiring the AUA/KUA license is not a walk in the park. It is fraught with a lot of challenges that make it a tedious process.

Let’s delve into two important challenges here.

Regulatory compliance: All businesses must adhere to stringent standards and regulations established by UIDAI to procure the AUA/KUA license. If compliance is compromised, businesses will have to deal with exorbitant fines, legal action, and reputational damage.

Infrastructure and cost: Setting up and maintaining the necessary infrastructure and staff to get the AUA/KUA license can be expensive, labor-intensive, and time-consuming.

To overcome the challenges in acquiring an AUA/KUA license, you need a reliable RegTech partner who can do the heavy lifting, while you focus on your core business.

Here are some of the use cases of AUA/KUA.

Use cases for AUA/KUA

Streamline Customer Onboarding – BFSI

AUA/KUA helps BFSI players with secure and reliable customer onboarding and KYC process using biometric authentication. The service enables quick execution of KYC processes, reduces the risk of data breach and unauthorized access to sensitive data.

Pension Disbursal – Governments

Governmental departments and agencies rely on AUA/KUA services for secure and seamless Aadhaar validation to verify identity and pension eligibility. The process of delivering financial support to senior citizens and disabled beneficiaries is made efficient, secure, and reliable.

Online Services – Transport Department

By using AUA/KUA services, government departments like the Transport Department of Telangana have been able to verify the identity of citizens efficiently and deliver online services seamlessly.  The need to physically visit the Regional Transport Authority (RTA) offices for services was drastically reduced, making the process highly convenient and efficient for citizens.

Contract Employee Authentication – Municipal Corporation

AUA/KUA helps municipal corporations in tracking the attendance of sanitary workers accurately. Using biometric scanners, municipal corporations verify Aadhaar, at least three times in a day to prevent fraud and eliminate ghost workers. Biometric verification ensures the authenticity of workers and the accuracy of records. Municipal corporations deploy AUA/KUA services to maintain trustworthy records.

Employee Identification – Hospitals

Hospitals leverage AUA/KUA services for hassle-free biometric verification of doctors and other healthcare professionals.  The process helps hospital administration confirm the validity and availability of physicians and monitor their schedules.

Student Monitoring – Welfare Hostels

The usage of AUA/KUA services and the installation of biometric scanner devices in welfare hostels have reduced incidences of ghost student records and increased efficiency in fund allocation and utilization. By helping hostel students authenticate themselves every day, the hostels can track their attendance precisely and get rid of ghost student records. The process has helped the administration prevent the misappropriation of funds and ensure resources are used efficiently to support the students.

Scholarship Monitoring – Universities/Colleges

Tracking student attendance is imperative for colleges and universities. To prevent fraudulent activities or misrepresentations in biometrics, institutions can rely on AUA/KUA. It helps verify student identity quickly and accurately using the Aadhaar number. It also helps universities to disburse scholarships to students.

AUA/KUA, a necessity for seamless identity verification

AUA/KUA license is a vital investment for any business that requires seamless identity verification. Instead of taking on the complex and expensive task of implementing an in-house identity service, businesses can consider partnering with a reputable digital identity service provider that offers a comprehensive AUA/KUA solution to combat identity fraud.

Check out our exclusive AUA/KUA suite that offers the following features.

• Cloud and on-premise hosting
• Face authentication-based transactions
• Scalable system (handles 10 million hits/day)
• Live network operations team
• Supports all stacks (Web, Windows & Android)
  • UIDAI-approved biometric scanners
  • Fraud monitoring systems
• Multiple ASA switch (switch transactions to ASA)
• Live dashboard monitoring
• Assured UID compliance

Want to know more about our AUA/KUA suite?

Write to us at business@m2pfintech.com.