Considering the surge in financial crimes and the fraud reports submitte by businesses, especially, banks, credit unions and other financial institutions, the regulatory authorities have made it mandatory to implement Know Your Customer and Anti Money Laundering solutions. The Know Your Customer services help a firm develop a strong identity verification system, preventing potential risks and frauds. KYC allows the organization to monitor and screen the costumes associated with it. It is an ongoing process that begins at onboarding and verifies and authenticates the customer’s identity.
Now, organizations that conduct businesses with another organization tend to be more prone to risks and fraud. As compare to business to consumer organizations, the business-to-business ones, require a stronger identity verification system that could authenticate the identity of the entire organization. Hence, business to business organizations has to be extremely vigilant in their onboarding process. A study in this regard generate the results that around 19% of all the online purchase inquiries are subject to fraud. Moreover, as per Australia’s Competition and Consumer Commission’s Targeting Scams, nearly $91.4 million were lost to the B2B invoice frauds. Hence, it has become extremely important for businesses to secure their own interests before conducting business with others.
What is Know Your Business?
Know Your Business checks are involve in the authentic processes of verifying the identity of the entire organization rather than just the customer. By doing so, it curbs the flow of money for fraudulent activities. By the integration of adequate KYB measures in the business processes, the firms very successfully maintain detaile information about their clientele that could be verify at any point in time.
Banks have always worked to strengthen their security systems and KYC verification solutions have help them achieve that. By implementing the kyb checks, the banks identify their stakeholders and beneficiaries and prevent them from concealing illicit high-value transactions. Kyb business verification makes it obligatory for the firms to verify and authenticate the person under whose name the business is register along with other higher authorities like the chief executive and directors.
Businesses mandated to implement KYB checks:
More than any other businesses, banks, credit unions, payment companies, and any other business dealing in funds transfer is mandated to perform adequate know your business checks. The reason that they are emphasize the most is their exposure to financial activities. The business verification process involves verifying the company’s registration, the identity of the owner and stakeholders, the business license updates and bank statement, etc. These are not the only documents that demand authentication, they may range from additional information require to perform a comparison against santin lists, PEPs (Politically Exposed Person), disqualify directors, and adverse media checks.
Digital KYB Solutions:
The digital advancements in the present era have greatly influence the business sectors and their identity verification techniques. Know Your Business regulations have also experience huge technological advancements and eased the identity verification process for businesses. What use to take hours is now done within a matter of seconds, that too, accurately. The extensive process of maintaining detail documentation of the business and the necessary information about it use to take hours and the results came out inaccurate. However, with the help of digital kyb solutions, the entire process of business identification and authentication takes place in no time with accurate results. The efficient process makes sure that no suspicious activity goes unnotice and uses the Enhance due Diligence processes where any risk arises.
AI-Powered KYB solutions:
The AI-automated kyb processes provide real time checks on the business, its owners and directors, etc. The real time checks extract the business data from either the global corporate strategies, global sanction lists, PEPs and government registers or public records. Along with that the automate ongoing know your business verification method makes sure, the company they’re conducting business with does not develop risk later in time. Hence, the risk file is maintaine to prevent potential financial crimes. Moreover, the AI-power kyb process not only helps in the authentication but also assists majorly in data retrieval and sharing appropriate data among respective parties.
How is KYB better than KYC?
Most businesses that have kyb verification integrate into their networks face problems because of the slow process. Moreover, companies having business to business relationships tend to judge the authenticity of the business as a whole rather than just the customer. Therefore, even though KYC was performing its functions, businesses with their unique requirements generate the need to integrate a stronger system that could verify the business as a whole, hence kyb came to the rescue.
Moreover, the machine learning algorithms, very effectively, deter any fraudulent attempt to forge the documents including fake credentials and information about the top management.
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