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Issuing
KYB
Know Your Business (KYB) is an extension of Know Your Customer (KYC) regulations. Its purpose is to reduce money laundering.
Any merchant acquirer, financial institution, or payment company that deals with money transfers must perform a KYB check of the organisations with which it does business.
It includes verifying the business licence, company registration, and identity of directors and other owners. Authentication parameters may range from passports and driving licences to bank statements, addresses, and birth dates.
Checks can be performed against disqualified directors, Politically Exposed Persons (PEPs), sanctions, and adverse media. This depends on the nature of the business, the value of the transaction, local laws, and any other suspicious activities and reports.
Owner and stakeholder identities are verified using public registers and automated Anti-Money Laundering (AML) systems.
AML regulations formulate how businesses (financial and non-financial) should monitor and prevent money laundering activities. Conducting detailed checks and due diligence for new and existing clients is an essential part of the process. Customers can be individuals as well as businesses, and this is where KYC plays a key role.
KYB vs KYC
KYB and KYC procedures aim to enforce AML regulations and make financial transactions safer while preventing money laundering activities. The main difference between both processes is the type of customers they verify. KYC is generally used to check individuals, while KYB was developed to verify any business or corporate entity. Any company offering B2B services is subject to KYB protocols.What Are KYC Procedures
The primary purpose of KYB is to determine the identity and ownership of companies. It’s designed to establish whether an organisation is legitimate or a shell company. It will show who is benefitting from the financial activities of the business. KYB verifies the ultimate owner of the company and any major shareholders. Checked details, include business licenses, personal identification documents, addresses, and business registrations. Both individuals and businesses should be verified against sanction and PEP lists. Checks could include a company’s sources, publicly available datasets, government registries, and customer information. Many KYC procedures are digitised nowadays, but some processes are still being done manually. Initial KYC verification is essential when starting a new business partnership, and so is ongoing monitoring as the partnership evolves. Transactions should be checked under KYC procedures and flagged for unusual or high-volume money transfers.Why KYB Is Important
KYB allows verified business data and global company information to be instantly accessed in real time. KYB software provides access to over 150 million companies across Asia, Europe, North America, Oceania, and other regions worldwide as a central gateway. Business documentation differs from jurisdiction to jurisdiction. That is why a KYB procedure must offer access to the following:- Official commercial registers;
- Shareholder information;
- Company filings;
- Annual and financial accounts;
- Politically Exposed Person, Sanction, and Adverse Media Lists;
- Tax and IBAN verification;
- Business KYB assist services;
- Perpetual monitoring and alerting of company data changes and fillings;
- Perpetual monitoring and alerting of PEP, Sanction, and Adverse Media Lists;