Businesses as a common perception do not only offer their assistance to customers, they deal with companies also. Due to this, companies have to be more keen-eyed during customers onboarding. From registering to providing services, businesses are mandated by regulatory compliance to authenticate customers. However, it becomes more crucial in the case of B2B assistance.
For this, Know Your Business (KYB) services come in handy. They back the businesses’ identification process. Further, businesses can verify corporate information of associated companies, personal data of higher management, and operations of the client companies. KYB checks are essential for the ultimate beneficial ownership (UBO) structure as it ensures KYC and customers’ due diligence.
Developing an Understanding of Know Your Business Meaning
Know your business checks are due diligence of companies against money laundering, identity theft, and other risks. This way parent businesses can document policies and identify any fraudulent activity from another company’s end. Also, they can authenticate the companies’ identities whether they are legit or just some criminal company trying to take advantage. So much so, businesses can identify if the company is legitimately operating or the functioning is restricted to papers only. Read on to understand how the KYB process works.
Know Your Business (KYB) Process
KYB works similarly to how the KYC process does. Digital verification reduces the manpower, cost, and errors that a business may have to face in manual verification. A company verification robust system makes it tough for fake business identities to escape verification. Commercial registers are backed by encrypted technology which makes the process automated. Hence, ensuring due diligence all the way.
KYB services cross-check the information provided by the company by extracting data through APIs. Information collected so far includes registration number that is in commercial record and jurisdiction codes.
- Business Background
In this step, services cross searches the background of the business. These include registration number, previous name (if any), type of company, trademark registration number, UBOs, registered address, and current status. This information can easily be cross-checked from commercial registers or online registries. To provide more strength, Know Your Business services provide financial statements of the company’s accounts.
- Business Filings
Business filings are instant verifiable information. These include access to financial invoices, sources, downloadable links to shareholder lists, reports, and accounts summaries.
- Business Summaries
These help companies to stay aware of changes in either management, functioning, or organization of interlinked businesses. Minor changes like change in policies to major shifts like change if the director or owner needs instant follow-up. Otherwise, it will cause disturbances in business environments.
- Business Structure
Information regarding the business structure is crucial for Know Your Business checks. It provides insights into parent companies alongside subsidiaries. Other features are based on country of origin or registration, functioning of business, transactions it supports.
Benefits of Business Verification Services in Uplifting the Companies
Businesses, industries, and every other sector are shifting to digital means to attract massive customers. Therefore, to put verification in action, they are using robust and seamless encrypted solutions. This way businesses can verify their associates, subsidiaries, and working partners. Below are some of the answers to why businesses need verification.
- To Ensure Compliance with KYC/AML Regulations
Central authorities are consistently increasing regulation for businesses to carry out verification. As criminal and fraudulent activities are increasing, the need for encrypted robust solutions is also skyrocketing. Therefore, every company is mandated to adhere to 40 regulations by FATF. Alongside these, FinCEN has documented statutes for companies as well. Therefore, verifying businesses ensures compliance with all the set standards.
- Fraud Prevention
Sectors of all sorts like finance, healthcare, e-commerce, or gaming are all exposed to data breaches, malware, identity theft, terrorism financing, and other criminal activities. These are just a few of what happens in corporate injuries. Onboarding customers is not as tough and risky as registering vendors, partners, subsidiaries, and suppliers is. Businesses won’t ever figure out that the attraction driving company trying to become their sister subsidiary is legit. They may know when time slips from their hands and all they are left with is a huge financial loss. This can be because the company exists only in papers or has a damaged reputation. However, by employing know your business solutions, companies can prevent such risks at the time of registration.
- Keeping Records Updated
Backlogs and old records can become a menace for companies. This will refrain them from efficient assistance and functioning. However, through KYB checks, businesses can update their records as well as their sister or child subsidiaries. This way, companies can keep a track of what changes are happening in other associated ones. Online solutions provide global access to commercial registers and jurisdictions, also to updated information regarding the businesses.
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