Business Address Verification: Securing Companies Onboarding Process09 February, 2024 7 minutes read It is not a piece of new news to verify customers’ addresses during the onboarding. This protects companies from fraudsters and assists them in compliance. But complications begin when we have to onboard a business as a partner, the question arises of how to verify a business address. This article will guide you on how to comply with business address verification. What is Business Address Verification?Simply put, business address verification collects and authenticates information about the company’s location. This cross-checking address ensures the company is working in the real world, not only on paper. There are three types of verified business addresses:Address Check The address check is a quick review of the location by confirming it is completed by cross-checking the database. The companies that only have to fill out the form from the company before onboarding mainly used address checks. It ensures address availability and confirms the company is the only business registered on a particular address. Additionally, this allows you to verify loopholes in the address consistency. Address Validation Address validation is a process of confirming the location by validating that they are operational and working from the same submitted address. This involves checking the street, house number, office contact, and zip code are valid. Address validation is a key element for businesses that fall under international watchdog regulations. For address validation, you can authenticate the document submitted by the company. Address Verification Address verification is an in-depth location attestation process, a coalition of other types. It typically verifies the address by cross-checking government databases and third-party. In fact, address verification ensures location accuracy and consistency. Moreover, it screens addresses against sanctions locations, which prevents a company from doing bogus business. Furthermore, this approach is compulsory for all businesses that comply with anti-money laundering and counter-terrorist financing regulations. It bolsters their security and assists them in streamlining the business onboarding experience. Why is Address Verification Significant? Business address verification brings various advantages for companies. It is indicated as a basic step, but this one check can protect entities from money laundering, terrorist financing, and financial crimes. Below are some key points for verifying business address: Enhance Security The address verification bolsters the company’s security by authenticating they were onboarding the legal company. Confirmation of the address ensures the business you are starting a partnership is real and not involved in illicit activities. That minimizes the risk of financial fraud such as money laundering, terrorist financing, drug trafficking, and mass weaponization. Streamline Onboarding Onboarding new businesses is a challenging task for companies and customers. The address verification ensures the company’s legitimacy and cross-checks its owner’s locations to streamline the onboarding process. Furthermore, verifying the business address guarantees real-time verification, which provides instant results to entities. Efficient Compliance During the business verification before onboarding, companies must comply with various national and international regulations. Compliance with these obligations can not be done without address verification. Verifying business addresses ensures the company complies with the country’s laws. Companies must uphold industry standards and obligations adequately; validating the company addresses guarantees these simultaneously.Industries Must Verify Business AddressesBusiness address verification is necessary for various industries to comply with regulations, improve customer experience, and mitigate fraud. Especially sectors that fall under the AML/CFT obligations that must verify the business address before onboarding, including: FinTech E-Commerce Marketplace Lenders healthcare Government and Public Services Online Retailers Banks Financial Industries Overall, business address verification is essential for all businesses that have to comply with regulations such as 5AMLD, Know Your Business (KYB), and Anti-Money Laundering (AML). All sectors under these obligations need global address verification and know whom they are doing business with. Best Practice for Business Address Verification Companies can automate the business attestation process by using online address verification. You can empower the organization’s B2B compliance techniques before starting a relationship with cutting-edge advanced technology. Following are the derivatives you should uphold before business address verification: Document Gathering Companies must collect the required information for the address verification of the business. The essential papers can be government IDs such as registration licenses, utility bills, residence permits, mortgage statements, or other official papers. Companies should also ensure that the documents are authentic and valid. They should also check for any discrepancies in the records. Finally, they should ensure the documents are collected and stored securely.Note- Acceptable documents depend on the government policies and jurisdiction of the industry. Document VerificationOnly creating a profile with the documents is not enough for onboarding companies have to validate the customer biodata. For that, they can verify the documents by checking the security features of the papers, such as fonts, signatures, borders, etc. This ensures the papers submitted by the business are not counterfeit and original. Note- Security features depend on the nature of the documents; the papers can change these. Document Validation Once the documents are verified, validation is necessary to confirm that the data written on the papers is original. For that, companies can use Optical Character Recognition (OCR) technology, which assists them in converting document data into computer-readable text. After that, companies use converted data to cross-check against the government databases to ensure the same information about the company is available in their backend. Note- Use a secured database to store company information to avoid data breaches.Document Screening Companies that have to verify the address of their partner business must comply with various rigid obligations. To comply with these, it is essential for them to screen submitted documents against the sanctions list. The watchdog databases can be government or third parties such as AML/CFT, Politically Exposed Persons (PEPs), or Special Interest Entities (SIEs). Cross-referencing with these databases ensures the company is not involved in illicit activities. Note- Don’t forget to screen against the adverse media sources.Challenges of Business Address VerificationDespite various advantages, companies face significant challenges during compliance with address verification. You must be aware of these obstacles during the address verification of the company and its ultimate beneficial owners‘ location. Below, we research some issues:Data Privacy The companies must submit essential documents for address verification. Most of them are confidential data about companies, outflow of this will cause various scams. The onboarding company must store the business data in a secure cloud to protect it from fraudsters. They can use this information to open an account with counterfeit data. Error Prone Address verification is challenging, and differentiating false positives from these is complicated. Over-validation is a time-consuming procedure and creates a hindering experience for clients. Manually address verification also does not provide accurate results or eliminate false positives.ExpensiveAddress verification is time-consuming and costly for companies. To get adequate results, your business has to collect the information, verify its biodata, and check financial statements, including various other derivatives that cost a significant amount to the company. Then cross-checks against third-party databases also charge, which creates the address verification burden on the company. Role of The KYB in Business Address Verification The KYB is the ultimate data provider for business onboarding. We provide 250+ databases with over 301M companies registered information. The KYB offers global address verification for businesses to expand worldwide. With the help of The KYB, you can collect business information through customizable techniques. This supports you in compliance with various industries according to their requirements. Furthermore, you can keep the company’s records in centralized reports. The KYB provides a secure place for the seamless onboarding operation. With the advanced perpetual KYB, we provide instant alerts for enhanced business due diligence and safeguard the bottom line of financial fraud.Contact us to learn how our Business verification services can help you verify your business.
Why must Banks Implement Know Your Business (KYB) in Business Onboarding?09 October, 2023 6 minutes read No wonder onboarding new clients and businesses is not about opening accounts and having signatures in today’s financial world. As the challenges grow with the rapidly expanding economic landscape, it is essential to know what kind of business your bank is dealing with before final onboarding. As per recent stats shared by the International Monetary Fund (IMF), the present rate of money laundering is 2-5% of global GDP, which is a massive amount. Therefore, implementing Know Your Business (KYB) has become more critical than ever to ensure security and compliance and prevent crimes like money laundering. Performing precise KYB checks is challenging; however, banks can collaborate with professional service providers to meet the KYB regulations. Know Your Business (KYB) service providers adopt advanced solutions to help banks ensure compliance with Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) regulations. Furthermore, KYB verification systems are precise and straightforward, allowing banks to maintain their industry reputations. This article discusses the importance of the KYB in banking, a brief of the verification, and its particular benefits.The Need for KYB RegulationsWhile KYC has been in the industry for decades to prevent financial crimes, criminals now exploit the corporate sector to perform illicit financial activities. Hence, these rising challenges in the financial horizon necessitated new regulations to ensure transparent transactions in the business sector, and that’s where Know Your Business (KYB) comes in. The Financial Action Task Force (FATF) issued new guidelines to ensure AML and CFT compliance, including the KYB compliance section. It clarified that financial companies must identify and authenticate the identity of their business clients, including the details of their beneficial owners. The FATF further emphasized the need for constant monitoring of the transaction activities of respective businesses.Furthermore, the EU’s 4th AML Directive also sets out the requirements for Know Your Business (KYB) regulations. These conditions require banks and financial companies to keep their business clients’ registration and license documents. It further instructs the financial firms to verify the identity of business owners and their managers during onboarding procedures.What is KYB in Banking?Know Your Business, or KYB is a crucial element of the broader term AML or CFT regulations. As the Know Your Customer KYC regulations allow businesses and financial institutions to verify their client’s identity, KYB helps institutions verify corporate firms, owners, beneficiaries, and managers. An in-depth KYB allows banks to rest confident that their money and relationships are safe if they take this precaution and confirm the legitimacy of the company they are doing business with.A Precise Overview of the KYB ProcessCorporate Due Diligence CDD has no standard set of regulations to follow during KYB compliance. However, the specialized officials at The KYB include the following primary steps to ensure smooth and precise business verification systems. Here’s a brief overview of our KYB process:Collection of DocumentsThe initial Know Your Business KYB verification stage is document collection. All the necessary documents from the company are obtained in this step, including the incorporation date, current operational status, and evidence of address. However, banks can ask for further data, for instance, the information of shareholders, beneficiaries, and details of tax returns. Business VerificationAfter gathering documents, banks or financial firms get access to all the information business clients provide to carry out verification and risk assessment of given data. The real-time authentication of businesses is performed to ensure KYB compliance.Risk AssessmentIn this phase, an in-depth analysis of the businesses, such as geopolitical risks, foreign investments, and operational risk assessment, is performed. Furthermore, the KYB officials also conduct regulatory compliance assessments to ensure compliance with AML and PEP sanction lists.UBO IdentificationThe KYB’s UBO identification allows banks to get the percentage of partnerships shared by business partners. Furthermore, it allows financial institutions to authenticate the source of earnings and funds of their business clients. With accurate identification of Ultimate Business Ownership (UBO), banks can effortlessly understand the complex business structures of their clients and make informed decisions.Requirements for KYB ComplianceDespite implementing KYC verification for years on the identification of clients, similar checks were not applicable for businesses. However, money laundering started strengthening its roots in global economies. The United Nations says $800 Billion is laundered annually worldwide. Therefore, the Financial Crimes Enforcement Network (FinCEN) introduced strict Customer Due Diligence compliance regulations.Compliance with Know Your Business regulations allows banks to execute businesses with the entities involved in the following illicit activities:Money launderingSanction listsTerrorist fundingTaxation fraudAnd other illicit crimesBenefits of KYB Verification in BanksThe banks and financial firms deal with a massive amount of money daily. In this regard, an efficient KYB verification system allows banks to implement a high-tech security system. Around 90% of money laundering cases go undetected every year. It indicates that most banks and financial companies don’t possess transparent systems for Know Your Business (KYB) verification. Nevertheless, digital KYB solutions offer the following benefits to the banking sector:Minimizes the Time RequirementWith The KYB’s business verification systems, bank and financial companies can save much time previously spent on manual business authentication procedures. Furthermore, an instant identification verification system lowers the risk of identification fraud.Reduces FraudEfficient digital onboarding with KYB verification systems allows banks to access more data sources. It helps them safeguard themselves from financial fraud and keep an active track of the financial transaction activities of businesses.Ensures SecurityKnow Your Business (KYB) verification procedures involve the collection of sensitive documents. Nevertheless, the KYB’s automated procedure ensures the protection of all confidential information.Also read: What is the Bank Secretary Act (BSA)?To Sum UpCompliance with Know Your Business (KYB) regulations is essential to prevent illicit financial crimes in the corporate world. As per Forbes, the financial firms were fined $2.7 Billion for non-compliance with AML and KYC regulations. The KYB’s seven-step checklist allows banks to effortlessly onboard new businesses while meeting challenges of financial crimes, including money laundering and terrorism financing. Build strong corporate ties with your clients using our specialized and streamlined KYB checks.
Adequate KYB Verification Service for Seamless Business Onboarding11 September, 2023 7 minutes read In this rapidly evolving world, there are various issues for businesses, and conducting business with legal customers is becoming challenging day by day. In this struggling face, the firms must comply with the rigid business verification regulations. These obligations protect businesses from financial scams. However, verifying businesses with traditional techniques is inadequate. It opens various doors for scammers to exploit businesses. In the US, 99% of businesses are small companies, and corporate onboarding is frustrating for small businesses. They need robust Know-Your-Business (KYB) verification services to ensure the prevention of financial scams. Digital sanctions compliance tools are crucial for fintechs and firms that deal in business-to-business (B2B). What Makes KYB Verification Essential?There are various factors behind the increasing demand for KYB verification services. Since the US patriot act bill passed in 2001, the Know Your Customer (KYC) is compulsory for companies to comply with the AML. The regulatory authorities did not urge financial institutions to verify their business and its ultimate owners. In 2016, the Financial Crimes Enforcement Network (FinCEN) observed various loopholes in the business onboarding, damaging the integrity of the global finance ecosystem. The FinCEN and international monetary regulatory authorities designed Know Your Business verification measures to overcome these shortcomings. To comply with these rules is essential for businesses before conducting B2B activities. Being a vital part of the business onboarding process, KYB checks protect financial institutes and secure the integrity of the global financial system. Which Industries Need KYB Verification Services?KYB verification is a legal requirement for most companies, especially financial institutes, gaming, e-commerce, and fintech. These industries are foremost of all others because they are constantly at risk of fraud. The regulation authorities aim to ensure these companies comply with the rigid regulations through KYB checks. These checks are designed to protect the integrity of these companies from various financial criminals. Companies, organizations, and industries who have must comply with KYB regulations are: Narcotics Financial InstitutionsBanks Medical Insurance Online Retailers Asset Managers Online Gambling/Gaming Transporters, etc. How to Conduct KYB Verification?Business verification is not as standard as KYC, but it is important for all those businesses who want to protect themselves from financial scams. We know the KYB verification is essential and prevents the company from scams, but the question is, which one is an adequate business attestation process? There are two most commonly used for business verification: Traditional and Digital. Both business verification techniques have their own perks and challenges. Traditional Business Verification In the traditional technique, companies rely on the human resource to comply with rigid KYB measures. They use conventional methods to verify the identity of the business owners and the legitimacy of a business. The KYB verification steps vary by country and industry, but some standard checks are given below: Verifying Business Registration This process involves requesting the business representatives to submit the required documents and attesting one by one manually. To conduct this KYB check, companies can demand various official records, such as the business’s legal name, ownership structure, and other registration papers.Checking Business legality This step is to verify the legal papers of the business, such as the license to operate and their permit to work in the particular industry. The permits can be different depending on the sector they are working like casino, gambling or alcohol, etc. Companies also ensure the businesses’ tax identification number this guarantees that businesses comply with the government’s tax regulations. Validating Business Owners For the entire KYB verification process, companies have to verify the shareholders of a business. It ensures the business’s ultimate beneficiary owners (UBOs) are legal and not involved in illicit activities. Companies send manual data to specific departments to attest information about particular clients. Then, they cross-check records and ensure accuracy. It assists the companies in determining the legal shareholder structure of the business. Challenges During Traditional KYB Verification Incomplete and Inaccurate Results Most of the time, businesses provide incomplete information and counterfeit papers, which makes it difficult for the onboarding company to ensure their legitimacy. This can be fake government IDs, business registration licenses, financial statements, or shareholders’ records. Manual verification can not detect false information and reap incorrect results. It is not easy for human resources to check the security features. Constantly Evolving Regulations Updating obligations and aligning evolving laws with traditional verification is challenging. These latest laws are complex and keep changing with time. Especially, it is a complex and tough task for companies working across borders. Because the requirements of business verification change with the industry and states. The lack of standardization leads to confusion and difficulty in KYB measures. Time Consuming and Costly Traditional verification depends on human resources and manual checks, which are time-consuming and costly. The collection of papers in manual KYB checks, such as company permits, accounting records, and legal agreements, is a common component. Particularly for businesses with large datasets to analyse, this manual process can be laborious. In traditional verification, companies have to recruit employees with experience in KYB services, legal compliance, and regulatory standards is necessary.Digital Business Verification Companies can remotely verify a business’s identity through a phone or laptop using digital KYB verification services. By assuring precise business verification, this innovation aids organizations in complying with KYB/AML laws. Business Verification Online KYB services provide companies with the benefit of remotely collecting all essential documents. The various paperwork, including its business registration certificate, licenses, permits, and tax identification documents, can be submitted in digital form. They can upload these materials in PDFs or images to the KYB verification services software.Business Legality KYB verification services system examines the uploaded documents for security features, watermarks, and other evidence of tampering or forgery in order to confirm their validity by utilizing robust technology. Optical character recognition (OCR) technology extracts and validates the data by machine learning. Owners Verification To reap accurate results, digital KYB services validate the identities of essential employees, such as company directors and owners, by cross-referencing their information with databases, public records, or government-issued identification. The company’s ownership structure, especially complicated corporate structures or subsidiaries is verified. Understanding the ultimate beneficial owners (UBOs) is made simpler by this. Challenges During Digital Business Verification Variety of Document There are more than 600 documents globally to verify businesses. Every record has its specific feature to protect against fraud, but some documents can be forged easily. Business verification by online attesting their ID cards is not enough. Companies should use adequate KYB verification services for entire business verification by attesting various papers. Secure Data As data breaches are increasing and becoming common, submitting personal information about the business on a particular website is risky. That’s why companies must use KYB verification services, which have secure databases to protect consumers’ prominent information. Evolving RegulationsAML obligations change with time, and these vary in industries and states. The companies can not comply with different regulations by constant business verification services. They should utilize ultimate KYB verification services, which update and can be customized according to industry needs. Final Adequate KYB Verification Service Overall, business verification is essential for all companies. However, during traditional verification, they face various challenges that can damage their reputation and lead to hefty fines. On the other hand, it does not matter if you are a small or a giant company. Facing challenges during digital verification is common. To overcome these challenges and convert complex business verification, companies should use third-party KYB verification services. These can accelerate the KYB onboarding process and reap accurate results for the companies.
Leveraging KYB for Enhanced Due Diligence in Business Onboarding11 August, 2023 5 minutes read A business’s growth and success depend on forming partnerships in today’s fast-paced global arena. When you choose the wrong business partner, you will face severe consequences, from financial losses to reputational damage. Companies must implement due diligence practices to mitigate these risks. KYB (Know Your Business) can enhance due diligence in business onboarding. KYB is a crucial component of business collaboration, and this blog examines its benefits and ways to safeguard businesses.Understanding KYBPrior to establishing a commercial relationship, a company must thoroughly verify the identities and backgrounds of business entities. Compared to KYC, which seeks to learn about each customer, KYB examines the legitimacy and credibility of sellers, vendors, partners, and suppliers.An end-to-end KYB process involves collecting and analyzing information about a company, such as ownership, legal structure, financial health, reputation, and regulatory compliance. The information helps companies make informed decisions about potential partners, reducing risks like fraud, money laundering, and unethical practices.KYB’s Role in Business OnboardingWith KYB solutions, financial institutions and large companies can conduct thorough KYB due diligence before engaging with business partners and conducting business deals. Using data science and proprietary machine learning, KYB analyzes over 16 million U.S. businesses’ credit histories, loan histories, and financial health to provide comprehensive analyses of companies’ partners, revenue growth, and risk. Using know your business or KYB solutions will enable organizations to make better decisions and drive more informed business onboarding, partnerships, and engagements.Unleashing KYB Verification PowerKYB verification ensures businesses’ legitimacy and identities before entering into financial relationships. In addition to building trust and reducing risks, this verification procedure also ensures compliance with regulatory regulations. KYB helps institutions minimize the likelihood of being involved in money laundering and other financial crimes by ensuring that they engage with reputable, trustworthy partners and businesses.Streamlining Business OnboardingAny business relies heavily on business onboarding. Using Know Your Business in this regard has been invaluable to them. Business details can be verified automatically, which can streamline the business onboarding process. According to a McKinsey report, automating business processes brings significant benefits. By automating business onboarding processes, companies can reduce manual efforts by as much as 70%, leading to enhanced operational efficiency. Corporations can streamline business onboarding processes by leveraging KYB while maintaining stringent due diligence standards. Institutions can quickly verify the legitimacy, validity, and risk profile of companies by automating the verification of their business details. By streamlining the business onboarding process, institutions can save time while allocating resources efficiently and deliver a seamless customer experience.Enhancing Risk Assessment and ComplianceA KYB program plays a crucial role in enhancing institutions’ risk assessment and compliance. An institution’s ability to assess the risk associated with a particular entity can be improved by conducting thorough due diligence on businesses and their partners. Consequently, resources can be allocated more efficiently, and risk mitigation strategies implemented faster. As well as helping institutions comply with regulations, KYB also assists them in meeting their obligations. It is done to prevent financial crimes by requiring regulators to use robust verification processes. In a survey conducted by Thomson Reuters, 72% of organizations expressed concern about regulatory oversight.Fraud and Money Laundering PreventionInstitutions are at risk of being compromised by money laundering and fraud. In order to prevent such financial crimes, KYB verification is crucial. Identifying red flags and suspicious activities early can be accomplished by thoroughly vetting partners’ identities and legitimacy. Identifying and disrupting money laundering activities, including KYB, can reduce financial crime risks, according to a Financial Action Task Force (FATF) report.Developing a Competitive AdvantageLong-term success requires acquiring competitive advantages in today’s highly competitive environment. Increased efficiency can lead to operational excellence, productivity gains, and improved partner experiences. In order to make informed decisions, adequate data must be available at the right time. KYB provides accurate and up-to-date KYB data to facilitate better business onboarding decisions. Through KYB, decision-makers can easily acquire and evaluate data, as well as gain valuable insights. A study conducted by Aberdeen Group shows that firms that successfully use KYB increase decision-making speed by 40%.Promote Integrity and StabilityThere is great emphasis placed on integrity and stability by many financial institutions, credit card companies, lenders, and other large enterprises, which requires KYB solutions to play a vital role in the dynamic business landscape. Using KYB data, organizations have the ability to streamline their business verification processes, enhance due diligence, and make informed business onboarding decisions. Nowadays, KYB solutions contribute to improved efficiency, reduced risk, and enhanced customer relationships through increased compliance.In a NutshellA proactive approach is essential for businesses to maximize efficiency and fortify their defenses against financial crimes as they evolve. This endeavor is made possible by KYB verification. With KYB, Client onboarding processes can be simplified, risk assessment and compliance can be enhanced, money laundering and fraud can be prevented, and cybersecurity can be improved. Financial institutions seeking to protect their reputation, integrity, and customer trust need to keep the KYB process as an essential tool in their toolkit as financial crimes evolve. Don’t let financial crime get the best of you – embrace KYB verification today!
