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How to Verify the Legitimacy of a Business Using KYB Compliance Solutions

07 November, 2023

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Technology is driving the modern business industry across the globe with new ways of interaction. While it is the main foundation of the modern business landscape there are other concerns of fraudulent activities. This fact is well backed up by a survey which reveals over 47% of organisations under a high fraud rate in the past two years. The high rate of fraud indicates the importance of identifying verification or primarily Know Your Business (KYB) compliance solutions for businesses to strive in this fast-paced market. Using tech-enabled solutions, firms can stay away from illegitimate or shell companies in the business landscape, giving your business a clear view of future objectives and goals.

This blog will discuss the need for technology to enable thorough business verification, eliminating potential risks of digital fraud. 

Introduction to KYB Compliance Solutions

Before diving deeper into the world of regulation let’s first understand what compliance is and how it is transforming security. 

Compliance is a set of standards to regulate the organisational adherence to laws and duties. This ensures a seamless workflow of firms with the aim of reducing scams and fraud. Most times a compliance solution is in place to stay in line with global and regional compliances.

A KYB compliance solution refers to tools, processes, and systems that are equipped with local and international industry standards to maintain regulation. The businesses that employ find it easy and reliable to comply with industry standards and internal policies. With the advent of technology, these KYB compliance solutions are becoming intelligent, ensuring a lawful and secure market. 

Are KYB Compliance Solutions Necessary?

Moving on, the next most asked query in the industry is why using a KYB compliance solution is necessary for my business. The answer to this question is simply, Yes! To back this answer, let’s look at some facts:

  • According to the Association of Certified Fraud Examiners (ACFE), 5% of annual organisational revenue is lost to fraud.
  • The Anti-Phishing Working Group (APWG) also reports an enormous 81% increase in phishing attacks without a proper KYB compliance solution. 

These figures justify the importance of having a KYB corporate compliance solution in place in order to prevent attacks and stay away from illegitimate businesses. 

How Modern KYB Compliance Solutions Work?

The next main question is how to implement KYB compliance solutions to verify a business. Firstly, it is crucial to choose the right compliance solution for your needs as there are many tools available in the market that utilise various technologies. Choosing the right solution which is cost and resource-effective is the best way to go in the first place. Here is how modern KYB compliance solutions work:

Data Collection From Global Databases

The first step in the phase of every modern business verification service is the collection of relevant organisational data. It is the core step in which technology, especially AI, is leading the way with fast data processing. KYB compliance solutions with AI-powered tools work relatively faster compared to traditional ways of business verification. They process data in real-time, ensuring due diligence through trained Money Laundering Reporting Officers (MLROs) to optimise the KYB process.

Business Verification Using Digital Methods

The second step in the cycle is business verification using reliable data sources globally. Now this is where AI can speed up the process significantly. A manual KYB solution can lead to delays and major inefficiencies causing a bad customer experience. With a proper automated KYB solution, your business can fast-track the tedious verification processes such as the identity verification of officials, filing documents, analysing registry information, and screening an organisation against complete Anti-Money Laundering compliance requirements.

Ongoing Monitoring using Risk Assessment Tools

Once a business verification is complete, it is ready to start its operations with other businesses across the market. But still, there are many factors that need to be monitored throughout the business cycle. With an AI-powered KYB compliance solution, your business can easily monitor new clients and business partners throughout every interaction. It is the third main operation of a KYB compliance solution. With automation, any suspicious and illegal activity will trigger an alarm within the system. This easily notifies a business of any fraud risk and breaches. This whole process is referred to as Perpetual KYB and helps businesses continuously monitor their alliance with partners in real-time. 

Automated Reports with AI Data

Reports are necessary for every business to analyse its performance over time. Generating performance reports with a crucial assessment is necessary and doing it manually is not a very good option in today’s digital world. An intelligent KYB compliance solution can do this task automatically with built-in reporting options, giving your business a competitive edge in the market. Using these detailed reports, firms can assess their performance in terms of objectives, partnership goals, future operations, and resource allocation. Any previous damage from fraud is also a part of automated reports showing the loophole and possible solutions to fix it using modern-day technology. 

Final Verdict

A Compliance solution is necessary for businesses to survive in the modern business market where fraud and cyberattacks are prominent headlines. But gone are the days of manual verification for each business partner. Technology is driving cybersecurity and KYB compliance solutions are no different. Using modern-day solutions, firms can help detect and prevent fraud from fraud or shell companies in any form. Companies can ensure compliance by employing modern data analysis techniques that easily identify red flags and even notify for any suspicious activity in the long run. Investors, partners and even consumers can take advantage of business verification services, allowing them to achieve stability in both financial and reputational terms. 

Contact us now to verify business legitimacy using market-leading tools and AI solutions.

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