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A Guide to Business Verification for Owners in 2024

04 December, 2023

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Business verification concerns have grown critical in the modern and fast-paced industry. Firms of all sizes must incorporate new technologies to cover all the vulnerabilities that fraudsters can attack and impact business networks negatively. While firms adapt technology, the fraud attempts in every business industry are showing no signs of slowing down. Attackers unveil new tactics to exploit enterprise systems and according to the numbers, they mostly utilise unregistered companies or shell entities to enter the market. This guide is about business verification and how to protect your business from cyberattacks in 2024. 

A Quick Recap 2023: Business Fraud and Theft

According to the numbers, over $48 Billion was lost by the e-commerce industry due to payment fraud only, in 2023. This is a  rise of over $7 billion compared to 2022 and indicates that with the progression of technology, attackers are also revamping their strategies. In the business market, new startups and small-scale initiatives are emerging which is a great aspect for a wealth of opportunities. But it also raises an alarm for legal bodies and regulatory authorities to scrutinise these firms as many of them are bogus and are made to facilitate the criminals. 

For instance, all those companies with incomplete registration data and complex internal structures are red flags for other businesses. Over 7000 companies were registered in Kyrgyzstan without complete data registration in 2022. Here are some highlights of fraud in 2023:

  • 40% of global e-commerce fraud attacks originate in the United States
  • 10% of the total annual revenue was spent on managing fraud by e-commerce merchants
  • 75% of e-commerce shoppers have committed fraud in some form
  • Around $90 – $400 billion believed to have been stolen from the $900 billion Covid Unemployment Relief Program, the biggest money laundering case in history

How to Approach Business Verification in 2024

Business verification has become integral more than ever in the modern world. It is a must-have solution to survive in the highly plagued market. While employing the latest tools and market strategies can improve your business, there are several approaches to detect and prevent fraud. Following are the top guidelines you should follow to avoid mistakes that cause firms to lose millions in 2023.

Stay Updated to Latest Technology

It’s the modern era of innovation and automation, and fraudsters can easily bypass old-school security systems. Cracking passwords and security questions has become a thing of the past. Biometric authentication is the way to go in 2024 and beyond. Fraudsters always look to find loopholes within the enterprise and attack using an authorised business identity. To mitigate this risk, firms must stay up-to-date with the latest security and technology protocols from legal authorities. This includes adherence to compliance and fair use guidelines and transparency policies to regulate their operations. 

Use Proper Business Verification Protocols

Know Your Business (KYB) solution has been in the industry, especially since the pandemic, when businesses were shifting their operations to the cloud in great numbers. Now, using old-school KYB processes for business verification is not enough as fraudsters now use new tricks to lure regulatory authorities. With a global shift towards digitization, authorities have set up complete business verification operations that evaluate firms online, from ownership proofs to verification of registry documents. Following these practices can reduce the chances of errors, ultimately eliminating the risk of fraud.

Verify UBOs Before Entering New Partnerships

Many times, a business can involve multiple stakeholders and investors, some of whom may misuse the platform for illicit activities to double the profits. Ultimate Business Owner (UBO) verification is key whenever entering new partnerships. Evaluating intricate internal structures and the involvement of every stakeholder has become integral to fully verifying a business. Their market presence, history of previous ventures, and verification from global PEPs and AML screening lists define how safe a business is. Without understanding the managing team, there is always a risk involved in every new business partnership and corporate onboarding

Scrutinise Business Verification Process Carefully

The business verification operation is a collection of different processes such as verification of registry information, business owners, and global compliance status. Each step is crucial in determining the legitimacy of a business and should be performed with proper scrutiny. Fraudsters always trick systems in one of Know Your Business verification checks to enter the market. The business onboarding process is crucial to prevent fraud in the first place. In business verification strategy, always make sure to use modern methods of corporate verification and KYB onboarding to streamline operations, increase transparency, and provide access to real-time data.

Continuously Monitor Operations

After entering a partnership with any company, or onboarding new clients through a comprehensive business verification process, there is still a risk of fraud in the long run. With continuous monitoring of each business entity, firms can ensure security within their networks. This significantly reduces the chances of fraudsters exploiting the space even after doing legitimate business in the first couple of years. 

Where The KYB Steps In

The business verification process is transforming each year with new KYB checks and updates to existing operations through technological innovation. In 2023, many businesses saw an increase in fraud and money laundering activities through their networks, resulting in hefty losses and penalties from global authorities. To keep your business secure in 2024, a complete business verification strategy is necessary with ongoing monitoring even after onboarding new clients. 

Moreover, this is where the KYB can help you achieve operational efficiency and foolproof security across your networks. With our extensive database, covering corporate data from over 250 countries and territories, your business can swiftly verify clients on the go. Verification of UBOs is also not a hassle anymore, as our advanced business screening solution reveals organizational structure through a visual representation, highlighting the impact and involvement of each business entity within the company.  

Talk to our experts today to learn how we use modern technology to ensure security for your business operations with our KYB Solutions.

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