Know Your Business – Establishing Corporate Trust in an Era of Smart Financial Solutions


Global companies are taking initiatives to expand the services graph for enhanced customer convenience. Simultaneously, the consumer market is growing, which is a positive signal. The financial sector is serving on both ends, B2B and B2C, which demand a more targeted approach to exercise the security landscape for protected operational activities. Customers are more inclined toward cost-effective and hassle-free services in every sector. 

The journey from KYC to KYB is genuinely a crucial procedure but its significance is undeniable. Customer information and sensitive details of the financial sector are becoming more prone to sharp practices. The Guardian reveals a scam with Europol officers using forged business details and exploiting infrastructural gaps. It reinforces the need for transparent KYB checks for company verification. 

KYB to Business Verification Services

Know Your Business is the verification of the business details. Customer business documents and income sources are verified to control the money laundering menace. KYB allows financial organisations to frame legal compliance policies to verifying businesses in detail. KYB verification includes all the business documents, business PAN card, complete business transaction details and tax details etc. The world is rapidly heading toward automation and smart programs are installed in an automated system to know your customer’s business. There is a number of verifying companies operating around the globe to determine whether the corporate businesses are operating under transparent procedures or not. 

Why is Automated KYB Prioritized Over Manual Verification? 

Traditional methods are no more favourable for financial setup. The world is a global village now and technology is swiftly taking over the planet. Governments are opening more gateways of opportunity for corporate businesses. Public-Private Partnership is also no exception in this matter. Financial regulatory bodies are more concerned to overcome manual verification challenges before it’s too late. Various organizations suffered huge financial losses due to weak and traditional methods of KYB. Automation is finally breaking the deadlock and taking the world to the next level where a few clicks perform all the actions with ultimate perfection. RCMP reveals a $1 million fraud commission by Small Business Financing Program (SBFP). The loan program to support businesses ends up a huge cost to the Canadian economy. It strengthens the argument that it is fundamental to know your business checks using automated software to avoid chances of error. 

Role of KYB in AML/CFT Compliance 

Businesses especially startups least pay heed to frame anti-money laundering regulations in the initial stages. The state of negligence is worrisome not only for the financial growth of the startups but for the global economy too. The proper electronic identity verification, better known as eIDV, helps to penetrate KYB in a more efficient manner. The suspicious business owners feel comfortable with using the forged identity or fake identity documents to achieve their nefarious interests. Money laundering and terror financing are largely supported at the disposal of suspicious businesses which are operational without any updated database or with even no database of business activities. The KYB checks ensure seamless financing and business operations. Regulatory bodies need to work on more stringent and actionable AML/CFT compliance procedures to control business frauds which cost huge financial losses. 

Significance of CDD & EDD to Control Financial Frauds

Digital businesses are generating huge revenue but at the same time more exposed to financial fraud. KYC is mandatory to meet the requirements of business verification for complete and reliable services without flaws. Different business verification services use different policies to implement customer due diligence. Data fetching and utilization methods vary from company to company. Enhanced Due Diligence provides automated methods to handle high-risk customers including politically exposed personalities or sanctioned lists of people etc. Using different custom API business data is extracted to verify the funding or income sources. An efficient know your business compliance procedures can help to obtain necessary business data like business code or the registration number for enhanced verification. Enhanced KYB & KYT verifications not only increase customer experience but KYB checks provide a better user experience to customers. Furthermore, on the other side of the pond, it can help to control the double-dealing of fraudsters. 

Final thoughts

Most financial institutions have already gone through the pain of fraudulent customer onboarding experiences. It exposed the lapses on the institutional level. Digital banking is further exposing banking loopholes in the form of financial transactions. It is undeniable that there are a number of hurdles in verifying businesses as most customers refrain from sharing complete KYC information. To find gaps using traditional methods is not worthy anymore. Automated principles are mandatory to apply for practical AML/CFT solutions.


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