Growing ratio of money laundering makes it necessary for organizations to adhere to various regulations which are designed and implemented to overcome financial crimes. Therefore, it is very important for businesses to comply with Anti Money Laundering (AML) regulations. For AML compliance, business verification is the primary service which helps organisations to identify the basic risk level of entities they have to work with. 

As per the Bank Secrecy Act (BSA), it is mandatory for financial institutions to have AML compliance measures which can help in financial crime prevention. Business verification comes under AML screening as it enables companies to collect, identify, and verify various business documents and perform other kinds of checks, which help to ensure transparency of organisations. 

What is Know Your Business? – An Introduction

Know Your Business(KYB) is a verification service that helps organizations in their security from high-risk entities and establishing secure partnerships. KYB is a complete process which involves various steps to identify organizational details, its business structure and financial performance.

The KYB process verifies a company’s legal status and is appropriate to onboard it for any dealing or business relation. Fraudsters often reach out to businesses just to make them victims of a data breach and financial terrorism. Therefore, the KYB checks verify all the company details and they enable the organisations to have utmost security from fraudsters and financial criminals. Moreover, KYB checks prevent shell companies’ attacks and help businesses to overcome growing financial threats. 

Know Your Business (KYB) as Legal Requirement 

Regulatory bodies keep on finding loopholes which give ways to process illegal funds to make them appear legal, and they are devising strategies for money laundering prevention. As per the Bank Secrecy Act (BSA), it is necessary for every organization, specifically the financial sectors, to perform AML screening. Therefore, KYB verification is mandatory to perform as it is part of AML compliance. 

The Know Your Business services involve transparency of company ownership structures, and it helps organizations to screen UBOs of an organization. Therefore, KYB service allows us to evaluate if a company’s UBO is part of any illicit activity. Other than regulatory compliance, business verification is a necessary service to employ to maintain a company reputation and to get closer to growth and success. 

Features of the KYB Verification

Know Your Business (KYB) verification process consists of the following checks, which ensure transparency of other organisations and help businesses to secure their collaborations:

Real Time Registry Check

KYB solution involves pre-trained artificial intelligence models in the form of automated checks which allow the company to thoroughly screen the company registration details. This process includes cross-screening of registration data across various databases and records. There are various records and databases containing worldwide companies’ information and data. Manual processes can take a long time in screening, but automated checks of the KYB solution allow firms to screen the company details across a wide database rapidly through automated checks. Many fraudsters have fake business details, which are necessary to cross-check over various public registries, and KYB is a necessary service to utilize in this regard.

Compliance Automation

Know Your Business screening process is now automated with the help of artificial intelligence integrations within the operations. It helps businesses to perform comprehensive checking of organisations across the AML list and the adverse media, which offers an automated compliance service. Companies do not need to adhere to money laundering regulations by performing manual checks, but they can simply utilize automated checks and ensure compliance automation. It results in quick operations within the business and contributes to overall company performance and success. A new entity would never prefer to undergo a lengthy verification process, this is why automation helps in making the organization open to grab great business opportunities. 

Document Collection and Verification

Know Your Business(KYB) service comes from the document collection and verification process. Many fraudsters generate fake business details which they utilize to bypass securities. With the help of the document verification step within the KYB process, organizations can thoroughly screen all the proofs and evaluate their authenticity. Automated KYB process involves optical character recognition technology within the operation, which converts data of documents into text format and makes it accessible to cross-check across various databases and records. 

Final Words 

KYB compliance is necessary for organizations to thoroughly screen entities and evaluate their risk potential. It involves various steps and pre-trained artificial intelligence algorithms within the system to perform all the checks automatically. Companies are no longer required to use manual business verification services, but they can utilize the innovative one, which ensures quick screening of entities. Additionally, the KYB compliance process makes organizations able to offer streamlined verification processes to their clients and partners, which opens doors for great business opportunities. It also helps in fraud prevention, anti-money laundering, and a streamlined onboarding process.