Businesses are thriving in an era where everything is digital. Millions of legitimate customers are just a click away but many criminal entities are also present in this pool of customers. Fraud, money laundering, terrorist financing, corruption, payment frauds, merchant frauds are just a few threats that businesses face. And to address these frauds and risks regulatory authorities have developed AML/KYC regulations.
Know your Business (KYB) is also an extension of KYC/AML regulations. Know Your Customer (KYC) and Anti Money laundering (AML) regulations require the reporting entities to perform due diligence on their customers (individuals). On the other hand, KYB verification laws require businesses to perform in-depth verification of the business entities related to them. KYB regulations are imposed on all the businesses that are liable for KYC and AML compliance.
Frauds that can be eliminated through KYB
Currently, businesses are facing a huge threat in the form of fraudulent business prospects faking as legitimate businesses. Developing global B2B relationships is inevitable for growing businesses but how to identify opportunities among threats? Even if the businesses develop domestic B2B relationships still the need for proper screening of those businesses is necessary because fraud has many facets.
Fake merchant fraud
Fake merchant fraud is quite common these days. Criminals with fraud intentions pitch companies using fake business profiles and fake websites. Later the fake merchants flee with the funds without delivering goods or just deliver low-quality goods. At times they get the goods and don’t pay for the delivery. KYB screening verifies a business entity and ensures that the business is actually what it claims to be.
Most of the companies don’t bother to dig about the UBOs of the business they are collaborating with. Often the money launderers and terrorist financiers use shell companies to wash their black money. Shell companies seem as legitimate as any other company. Such companies often have offices, employees and bak accounts aswell. But they manipulate the business proceeds to incorporate the black money within.
In case a business is found to be facilitating a criminal entity intentionally or unintentionally it is liable for penalties and fines.
KYB screening of businesses includes in-depth identity verification of UBOs as well. It helps businesses gain valuable insights about the company they plan to develop a relationship with.
KYB screening solutions a feasible method for risk prevention
KYB screening solution is a SAAS product designed to verify businesses. A KYB screening solution has the ability to verify millions of businesses and that too within a minute. It makes businesses gain valuable insights about the background and credibility of a business.
KYB screening solution fetches information about a business entity and helps companies make better partnership decisions about companies.
KYB screening solution can be integrated with a business platform with single API integration and goes well with Android, web portals, and iOS. Most of the businesses (especially SMEs) don’t have an extensive budget to develop business verification systems in their company. Manual verification is not possible also due to cost issues so a KYB screening solution serves the purpose well.
On the other hand, KYB screening solution is cost-effective as it doesn’t require any hefty resources, single API integration is required to start verification of businesses. At times the business prospects get demotivated due to excessive information demand so they opt out of the partnership opportunity. A KYB screening solution also helps in this perspective and only the jurisdiction code and company registration number is required to perform the verification. So, it helps you carry out thorough security measures in a frictionless manner.
Some KYB screening solutions also deliver KYC verification services along with KYB screening. So it helps businesses practice thorough risk prevention in their company.
To wrap up, KYB screening is the need of the hour and KYB screening solution helps businesses fulfill this need in a smart manner.