Know your business is the first step of establishing long-lasting B2B relationships.
AI for B2B – The financial institutes have been on the top of the target list of cybercriminals for the past decades. With the rapid digitization due to the technological boom, businesses are also opting for online channels for better sustainability. But this shift has opened the gateways for the fraudster to manipulate the systems as there are many loopholes in between the data security. Therefore the financial institutes are in need of automated solutions to identify and deter the emerging risks of fraud. Thus, know your business checks are mandatory for corporations enabling them to onboard authentic and trustworthy clients. KYB is derived from the KYC process but it’s quite different in terms of relevancy. Know your business verifies the company whereas knowing your customer tends to be client verification.
What is the Meaning of KYB Compliance?
Before starting a business relationship with any other company, in order to make the financial system and asset secure the businesses get to know if the company possesses any entities with potential risk for example exposed to money laundering or financing terror groups. Therefore the knowing your business compliance ensures the mitigation of any illicit or fake corporations performing a transaction with shell companies or in red-flagged countries. Moreover, this also enables the businesses to verify every single entity of the businesses including the stakeholders, owners, UBOs, and higher management.
Verification of Company Process
Know your business procedure enables the companies to authenticate corporations by employing KYB checks. Know your business is the first step of establishing long-lasting B2B relationships. Using KYB APIs the companies can integrate into their systems to boost up their security measures.
Business Identification
The companies tend to identify the businesses by authenticating their information which includes
- Company registered Trademark
- Name of business
- Ultimate Beneficial Owners (UBOs)
- Address of the business on which it registered
- Type of business
- Jurisdiction codes and registration number
Business Filings
In this stage, the company filings are obtained which includes the internal information about the business to get them to verify.
Business Networks
In this, the business relationship between the child and parent companies is validated and information is obtained for proper verification.
Business Statements
Such statements consist of the records of internal operations as well as the management structures. Moreover, getting to know about the business shareholders helps in effective verification of the company.
How does automated KYB Protects B2B Relations?
The automated know your business solution is the fruitful innovation of artificial intelligence algorithms. This solution is capable of identifying not only the real identities of the businesses entities but also determines the financial threats linked with the individual entities by incorporating AML checks. By employing anti-money laundering compliances the business can identify the involvement of company entities in financial crimes such as money laundering against the global watchlist, sanctions list, and financial risk databases.
Know your customer’s solution is the utmost object of any kind of identity authentication service. Therefore automated KYB services based on the key steps of the KYC are a helping hand for the financial corporation which tends to deal with the huge customers’ transactions of business entities. This also provides a crystal clear image of the other company before establishing a relationship.
Pros of KYB Checks
For any kind of business, it’s viable to establish and implement effective security strategies in order to protect the company’s operation. Unfortunately, some businesses don’t take it seriously and just to gain more profit neglects to top up security measures which fortunately leads them towards financial losses.
However, business verification solutions provide the gateways to companies to determine and deter the risk of multiple financial frauds for example money laundering and counter-terrorist funding.
The regulators are putting pressure on businesses to implement AML compliance to prevent such suspicious activities and to verify the legitimacy of the vendors, third-party providers, and business partners.
KYB is also capable of identifying the shell companies which take the loan and then use them as financing fraudsters. Such businesses have to facial recognition hefty fines and can also end up in jail.
Round the globe, there are piles of illegal and blacklisted businesses. The company if it develops relations with such a business can put them in a lot of problems. Therefore, verifying the business and getting to know about the business will eventually save the corporations from financial losses.
Final Thoughts
Wrapping it up, businesses are exposed to numerous types of fraud which is damaging their repute and trust. However, the collaborations with illicit business entities can put the companies in great danger. The minor financial losses don’t pour big losses upon the businesses but if the company gets into suspicious activities such as money laundering by establishing relationships with the fake companies can affect the businesses at large. Therefore verifying businesses using KYB check is mandatory for the business in order to develop healthy B2B relationships.
