How KYB Automation Can Save Your Business from Losing Clients to Competitors?

Verifying businesses should never feel like a game of chance. Companies are reshaping their operations with innovative solutions. Yet, many businesses in Fintech, RegTech, real estate, supply chains, and crypto still depend on ambiguous, outdated, manual processes that leave them exposed to threats and inefficiencies. 

Note that staying updated with the constant changes in regulations is challenging, and companies are required to ensure compliance and minimize financial risks. It should be the top priority for their business, particularly in the financial services sector. 

The most critical compliance check is Know Your Business (KYB). This process is known as a comprehensive method that confirms the legitimacy of organizations, their UBOs, and their business operations. 

As essential as KYB is, the procedure is now becoming a bottleneck for business entities for companies that still rely on manual checks. 

The impact of slow KYB checks is substantial, not just in terms of lost revenue, but also in terms of client trust, which is the backbone of any financial service, whether in FinTech, supply chain, or real estate. 

If this process isn’t automated and optimized, businesses risk losing potential clients to competitors who provide faster and more efficient solutions. 

However, sectors can still save themselves from losing clients by automating their systems and ensuring that their partner entity is accurately verified. What if there is a smart system that involves no complications?  

The possibility of having a KYB automated system is no longer a future ambition but a present reality. But first, let’s explore what challenges companies encounter with the manual KYB procedure.

What are the Manual Know Your Business(KYB) Process Challenges?

Manual KYB processes are outdated and hinder business activities. It all leads to inefficiencies and increased compliance challenges. Let’s break down some of the key challenges that organizations came across in the manual KYB procedure.

Time-Consuming 

Manual KYB verification often requires cross-checking multiple databases with scattered and vague details. It also includes manually entering data and examining extensive paperwork. This eventually leads to slow, inefficient processes that result in delays and errors. 

The time required to complete these checks usually takes a few hours and sometimes several days. It all depends on the complexity of the business and its ownership hierarchy. 

Another important factor includes the number of entities in the business, along with the verification method employed.

Ambiguous and Incomplete Data

Many organizations still rely on third-party data or external sources that are usually fragmented and ambiguous. This occurs because some databases are not updated and often have obsolete business registration details, or the information may be fragmented. 

Manually checking and reconciling data from these multiple sources usually results in inconsistencies and incomplete profiles. 

This makes it complicated and challenging to conduct due diligence of legal entities, which ultimately leads to unnecessary delays and increased chances of missing red flags.

Evolving Compliance and Regulatory Concerns

The KYB manual checks put businesses at a significant risk of non-compliance with ever-changing regulations. The manual tracking of compliance requirement changes can be exhausting, and failure may lead to staying on top of updated legal regulations. 

It eventually increases the probability of legal consequences, steep monetary fines, or even the loss of operating licenses. 

Moreover, there’s often no real-time way to monitor changes in business entities, creating a substantial compliance gap due to a lack of standardization.

Inadequate Client Experience

From the end user’s perspective, slow and cumbersome client onboarding is a massive turn-off. 

Financial institutions or other service providers that take days, or even weeks, to verify businesses lose clients to competitors who offer them streamlined, automated processes. 

Roughly two-thirds, that is 67% of clients, say they’re more likely to pick a service provider that makes a quick, easy, and smooth onboarding experience.

How KYB Automation Helps KYC Providers Facilitate Multiple FinTech Companies?

Consider a KYC provider that is facilitating multiple FinTech businesses that lend money to businesses. They need to know two major things: check if the business is legitimate and who actually owns it. They are not only required to follow anti-money laundering (AML) regulations but also to minimize risks. 

Since FinTech deals with so many businesses, they need automated systems that can check everything accurately and quickly. Therefore, it’s a big challenge to do both well. Now, let’s break down this perspective into three parts.

Challenges Faced by the KYC Provider

The KYC provider was facing increasing demand for KYB solutions. Managing business verification separately from individual client checks creates inefficiencies, delays, and operational challenges. 

Additionally, business entities are required to ensure compliance with international AML rules and Financial Action Task Force(FATF) recommendations regarding UBO verification across multiple jurisdictions, which is becoming more complex and time-consuming. This affects client onboarding and satisfaction.

The Solution 

KYB automation can be easily incorporated with the current KYC system. The solution provides real-time checks against global sanctions lists, PEPs, adverse media, watchlists and regulatory enforcement. Moreover, it provides data from official business registries, ensuring compliance across multiple jurisdictions. 

The solution not only minimizes the manual workload but also streamlines the onboarding process and improves operational efficiency.

Result 

With The KYB, the KYC provider is offering a faster, more seamless verification process. This leads to quicker business onboarding, improved client satisfaction, and a more efficient compliance process, allowing the provider to scale their services effectively.

The Need for an Automated KYB Verification Solution

At a time when regulatory compliance and speed are paramount, KYB automation process offers the solution that businesses need. It eliminates the pitfalls associated with traditional manual KYB verification processes, offering a seamless, automated solution. 

Let’s look at how KYB automated solution addresses the issues businesses encounter in verifying companies, Ultimate Beneficial Owners (UBOs), and legal entities:

Automated and Real-Time Data Extraction

One of the most challenging aspects of manual KYB checks is extracting accurate business and UBO information from various official registries. With an automated kyb process, businesses can instantly access authoritative data from official business registries across the globe. 

The advanced technology ensures that data is extracted with high accuracy, reducing manual errors, data ambiguity, and saving businesses precious time. Moreover, it allows businesses to verify UBOs by tracing ownership structures, regardless of the complexity of the ownership structures.

Comprehensive Risk Screening

In addition to verifying basic company details, automated kyb checks scan business entities against multiple risk indicators, including sanctions lists, PEP (Politically Exposed Person) databases, adverse media reports, and regulatory enforcement. 

This ensures that businesses can effectively assess whether a partner business or entity poses any financial or legal risk. Unlike manual checks, which may miss critical information, automating the business verification aggregates data from multiple sources to provide a holistic risk assessment of each entity.

Real-Time Monitoring

Compliance doesn’t stop once a business has passed the KYB checks. KYB automation ensures that business entities are continuously monitored for any changes in ownership or legal standings. 

If any alterations occur, such as a change in the company’s director, or any red flags are detected. It may be related to entities that could be subjected to sanctions or a change in PEP status; automated KYB checks immediately notify the business. 

The real-time monitoring enables businesses to stay compliant with minimal effort and avoid potential regulatory challenges.

API-Driven Integration

The APIs integrate seamlessly with existing systems, allowing businesses to automate their KYB checks without disrupting their existing workflows. 

This eliminates manual entry errors and allows businesses to easily scale their verification process as they grow. 

Whether a business is verifying a handful of entities or onboarding hundreds daily, automation powered by API driven integration ensures speed and accuracy at every stage.

Streamline Due Diligence and Stay Ahead with Know Your Business Automation 

The need for automated KYB solutions is growing. Businesses operate in a fast-paced, globalized world where regulations are increasingly complex, and client expectations are higher than ever. 

Additionally, the need for legal entity verification is also becoming an integral part of partnerships. Therefore, the manual KYB processes are not only inefficient; instead, they are also a competitive disadvantage.

By automating the business verification with KYB process, financial institutions, KYC providers, fintech companies, and other service providers can:

• Automate businesses to process more clients without adding significant overhead costs.
• With real-time access to verified data, businesses can onboard clients faster, leading to a better experience.
• Automated tools ensure that businesses are always up-to-date with the latest regulatory changes, providing real-time information and reducing the risk of fines and legal penalties.
• Streamline onboarding to give businesses a distinct advantage over competitors who still rely on manual, outdated, and fragmented information.

Why is ‘The KYB’ the Best Solution to Automate KYB Verification? 

In a world where regulatory compliance and operational efficiency are paramount, The KYB offers a future-proof solution. By automating the business verification process, it not only addresses the challenges of manual checks but also transforms the way businesses approach compliance. 

KYC providers, financial institutions, real estate companies, and the supply chain industry that adopt the solution will find themselves equipped to scale quickly, meet evolving regulations, and provide a superior client experience.

The KYB not only provides proper, authentic, and authoritative data from official business registries, but its AML screening screens business entities against watchlists and regulatory enforcement. It ensures that companies are dealing with legitimate businesses. 

For businesses aiming to stay ahead of the curve, embracing The KYB isn’t just an option; it’s a necessity. Contact our team today to get a consultation on services tailored to your business.

Frequently Asked Questions 

1. What is KYB Automation?

KYB automation is the use of technology to streamline and digitize the verification and due diligence processes for business entities. This involves automating data collection, ownership identification, and risk assessments to ensure regulatory compliance and mitigate financial crime.