KYB, or know your business, similar to know your customer which are used for verifying customers identities, is a tool commonly used by companies to verify the businesses they work with. Know your business, also known as corporate KYC, is the process of verifying the legitimacy of another business. KYB is an offered solution, which is primarily used by businesses and financial institutions to assess the risk of working with customers, suppliers, and borrowers, therefore empowering them to take informed decisions.
Know your business reports enables obligated entities, assess the anti-money laundering and counter financing of terrorism risk that new and existing business relationships pose. It provides business scrutiny solutions to firms, which enables them to determine whether the entities they are doing business with are authentic or not.
Primarily, a KYB should focus on ultimate beneficial ownership (UBO), in order to reveal who is benefitting from their financial activities. This allows firms to establish that whether a business, or its employees, has been engaged in any kind of unlawful or criminal activity, and are authentic individuals or not.
In order to establish the beneficial ownership, KYB regulations may require identifying information such as
In addition to these, firms may refer to a range of various other resources for conducting the KYB checks. This is done through scrutinizing the publically available government registries and records and global corporate registries. Furthermore, it may be necessary to collect official materials such as passports, driving licenses, and bank statements, along with proofs of addresses and date of birth.
Along with the transparency a KYB offers to firms, it comes with various other benefits:
To conclude, it can be said that KYB checks are essential to on-boarding, and monitoring corporate customers, by giving a clear inside-out view of a business.
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