It's as easy as KYB&C

FrankieOne

Understanding the synergies between KYB and KYC in customer onboarding.

Over the last decade we have seen a significant evolution in Know Your Business (KYB). With advancements in technology, rapidly evolving regulatory changes and the increasing complexity of global business environments our industry has needed to adapt.

Primarily driven by AI, automation, and blockchain technologies governing bodies around the world have looked to adopt global standards and cross-border compliance, providing more transparency and better protection for consumers, including stringent data protection laws like the General Data Protection Regulation (GDPR) and the California Consumer Protection Act (CCPA).

A crucial aspect of business onboarding is understanding the Ultimate Beneficial Owner (UBO), the person or people/persons that ultimately owns or controls the company, even if they are not listed as the company’s official owner. To complete the process, Know Your Customer (KYC) plays a critical role during business onboarding.

These two complementary processes help organisations to enhance due diligence, manage risk, and ensure compliance with regulatory requirements.

Know your Business (KYB)

  • Ensures transparency, helping you understand and verify the business entity itself, its legitimacy, structure, ownership, financial health, and operations, so you can be confident this is a company you want to do business with.
  • Helps you identify who exactly owns the business entity, who is benefitting from it, and the people you will ultimately be providing a service to.
  • Ensures the entity is compliant with relevant local regulations, including corporate registration and reporting requirements.
  • Keeps your business practices up to date making sure you address all regulatory requirements you may have across various jurisdictions.

Know your Customer (KYC)

  • Ensures transparency by verifying the individuals within the entity who have significant control or influence over the business, including beneficial owners, executives, and key stakeholders.
  • Ensures those individuals are vetted against Anti-Money Laundering (AML) and counter-terrorism financing (CTF) regulations.
  • Protects your business from fraud by detecting impersonation or fraudulent activities.
  • Assesses reputational and operational risks associated with individuals.
  • Rounds out your compliance requirements by addressing individual identification and verification within your different regulatory environments.

Without verifying the individuals behind an entity, it’s impossible to assess the true risk of a potential customer. Integrating KYC into the KYB process helps businesses meet both entity-level and individual-level regulatory requirements, providing a complete compliance framework that addresses various aspects of financial crime prevention.

Together, KYB and KYC help in creating a robust, end-to-end, risk management and fraud prevention framework. While KYB focuses on the legitimacy of the business, KYC ensures that the people behind it are genuine and trustworthy.

This integration streamlines verification, slashes redundancy, and ensures every aspect of due diligence is covered in one unified process—saving you time, resources, and ensuring comprehensive compliance, giving you the freedom to focus on what really matters for your business!

Ready to streamline your onboarding process and ensure comprehensive compliance? Embrace the synergy of KYB and KYC today, and let us help you focus on what really matters for your business.