Imagine a world where opening a bank account, buying insurance or investing in a new financial product requires almost no repeated paperwork. That is the promise of Central KYC 2.0, whose rollout reportedly started on August 1 for banks and insurance companies, with other financial institutions set to adopt it in phases. The upgraded digital system will let consumers reuse their verified identity details across banks, mutual funds, insurance and other financial services using just an OTP for consent.
For consumers, it means convenience. For the BFSI industry, it means operational efficiency. For marketers, it may mean something far bigger—the end of ease of onboarding as a competitive differentiator.
Much of BFSI marketing today is built around making acquisition easier. Brands promise paperless journeys, instant verification and quick approvals because these reduce drop-offs and improve conversion. But if every institution can tap into a reusable customer identity, those promises quickly become table stakes rather than standout propositions.
Does that change where marketing creates value? Anirban Mozumdar, Chief Strategy Officer, TBWA\Lintas stresses that BFSI brands will have to continue focusing on acquisition strategies, since penetration is still low for most categories, such as general insurance and even investment products like mutual funds. “As a sector, there is a need to grow by turning a nation of ‘savers’ to that of ‘investors and growers’. Think of COBA (Coming of Banking Age) as the moment someone moves into their earning age, which does not include accounts or policies being opened by their parents. Recruiting the next generation (acquiring customers) at this point of market entry will continue to be critical,” he says.
However, for stronger differentiation, instead of focusing only on getting customers through the front door, brands may need to invest more heavily in why customers choose them in the first place, and why they stay. Amyn Ghadiali, Country Head, Gozoop Creative elaborates, “When the entry gate is free for 25+ crore Indians already in the CKYC registry, differentiation moves downstream of KYC—cross-sell done well versus done spammily, pricing you can explain versus buried in a PDF, and so on.”
CKYC 2.0 makes the data-sharing free, and according to Ghadiali, the brands that win, use that to close the after-sale gap, not just to onboard consumers one week faster than the next guy.
Essentially, the competitive edge shifts to what happens after the customer is acquired. Trust, relevance, customer experience, personalised communication and ecosystem value become stronger levers in building meaningful consumer preference. These values, according to BFSI marketers, will continue to guide their customer acquisition and retention strategies.
Rathin Lahiri, Head – Marketing & CSR, SBI General Insurance says, “CKYC 2.0 has the potential to be a meaningful step forward for the entire financial services ecosystem. Anything that makes it simpler for customers to access insurance is a positive development. But while it can make onboarding faster, it cannot replace the one thing that truly drives customer’s choice in insurance—trust. Insurance is a category where the real brand experience begins after the policy is sold, especially at the time of a claim. So, even if customer acquisition becomes more seamless, the real differentiator will continue to be how consistently an insurer delivers on its promise.”
He further states that marketing will increasingly move beyond just acquiring customers to nurturing long-term relationships. “The focus will be on staying relevant throughout the customer’s journey through meaningful engagement, transparent communication, personalised experiences, and, above all, delivering a claims experience that reinforces confidence in the brand,” Lahiri says.
Sachin Joshi, President - Claims, Operations & Customer Service, Liberty General Insurance is of the same belief. “CKYC 2.0 will be an important enabler, rather than a differentiator. It will eliminate repetitive KYC with additional controls and need for documentation, which are some of the biggest causes for drop-offs in digital insurance journeys. Hence, it will only enable seamless onboarding and help in policy conversion. The real competition will continue to be won on the basis of relevance, transparent advice, responsible use of data and a dependable claims experience.”
For marketers, that means CKYC 2.0 is unlikely to level the playing field as much as it will raise the baseline. If seamless onboarding becomes an industry standard, differentiation will also depend on how effectively brands convert verified customer data into meaningful engagement and long-term loyalty. In other words, the advantage will lie not in access to customer information, but in how responsibly and intelligently it is used to deepen relationships over time, which points towards a shift in customer segmentation and targeting strategies.
According to Mozumdar, the availability of data is merely a starting point, implying that there are real, verified persons with all documentary proof behind the CKYC number. “The real advantage will come from how intelligently it is used—cross-tabbing it with the first-party data that financial institutions already have on their customers, including their current behaviour.”
Additionally, he believes that greater customer insight will enable more precise, life-stage-based targeting and the emergence of sharper customer niches—for instance, high-credit-score Gen Z, late millennials or Gen X, or customers seeking solutions for retirement, children’s education or marriage. “These offerings will be driven by more insight, and sharply address real needs rather than bank-driven, underwriting-driven standard offerings,” Mozumdar notes.
Mimi Deb, Chief Operating Officer, Madison Media Plus, also notes that segmentation will move from broad demographic audiences to propensity and value-based cohorts. Sharing other ways in which consumer targeting may evolve with CKYC 2.0, she says, “We will be able to de-duplicate customers, stop paying to reacquire the same person, and, with consent, connect media exposure to outcomes such as verification, approval, product sale and long-term value. We will be able to ask the algorithm to ‘find more people who become verified, high-value customers’, instead of ‘find more people who fill this form’.”
Besides this, the upgrade is expected to provide a sharper lens on the customers companies already have. “A bank can now see, in real time, that an existing customer has zero insurance or investment cross-holding, and act on it—moving from Meta/Google lookalike guesswork to verified first-party signals within its own base,” Ghadiali observes.
However, he warns, “It cannot, and legally should not, reach into another institution’s CKYC-verified customers to cold-target them. That record only gets pulled at the point of a transaction, with fresh consent, and India’s DPDP Act’s purpose-limitation rule (binding from May 2027) exists precisely to stop KYC data collected for verification being recycled as a marketing list.” So, the winning playbook according to him is ‘know your own customer better’, not ‘know everyone’.
The new economics of CAC
This shift also has important implications for customer acquisition economics. By reducing friction in identity verification and onboarding, CKYC 2.0 has the potential to lower the operational costs associated with acquiring new customers.
Deb shares, “If fewer customers drop off during verification and onboarding, the same media investment can produce more completed customers. In well-designed journeys, this could potentially reduce the effective cost of acquisition by at least 10 per cent.” Retention and further engagement, she says, depend on product experience, service quality and how meaningfully the brand engages customers after acquisition.
But a lower cost of acquisition is only one part of the equation. The more significant shift may be in how BFSI companies’ acquisition spends are distributed across the customer journey. “KYC is only one line item inside a bank’s CAC—physical verification costs `200-500 per customer, versus `2-15 via Aadhaar eKYC, DigiLocker or a CKYC pull. Even if CKYC 2.0 doesn’t shrink `1,000-1,500 a BFSI company spends acquiring a customer; it shrinks the paperwork-and-verification slice of that number towards zero,” Ghadiali explains. What is left is the marketing, distribution and trust spend. “So, the composition of the budget flips even if the total doesn’t.”
CKYC 2.0, therefore, is less a marketing advantage in itself and more a catalyst for a broader reset in how brands approach customer acquisition and retention. As onboarding becomes faster, cheaper and increasingly standardised, the differentiator will move beyond access and efficiency to the ability to create trust-led, relevant and personalised customer experiences. For marketers, the opportunity lies not just in acquiring verified customers at lower friction, but in using those moments of intent to build stronger relationships.
