Business Verification Services
Research shows $1.6 trillion of money is laundered worldwide. Criminals are targeting unregistered businesses to carry out money laundering and terrorist financing. It has posed a major threat to organizations that lack appropriate customers due to diligence measures to verify legitimate businesses.
It not only harms their brand reputation but also results in penalties and sanctions. Regulatory bodies have introduced strict regulations for businesses to deter money laundering activities.
Business Verification Services is crucial for organizations to maintain a transparent and legitimate business relationship with other organizations.
What is Business Verification Service?
It is a process through which corporate organizations perform due diligence analysis of industries before establishing a business relationship with them. It helps them to initiate policies and track down illegal business activities and transactions. Furthermore, it helps businesses to verify that they have a deal with an authorized business and get rid of fraudulent organizations
What is Know Your Business or KYB?
Know the Business mechanism assists businesses to track down suspicious organizations and prevent any mishap. Financial regulatory bodies in developed countries have made it compulsory for Business Verification Services corporations to perform AML measures and appropriate ID document verification.
Regulations such as the 5th AML directive and digital identity verification are being adopted in the European Union as KYB law for businesses. In the EU, AML directives require the EU states to manage the beneficial ownership information of authorized businesses and corporations.
While in the United States, customer due diligence checks are required to decide the real business ownership. Through CDD, it will be easier for the organization to monitor corporations that are being a part of illicit activities.
How is KYB different from KYC?
Same as KYC, the KYB verification mechanism also validates the business identity against the official ownership information of legal businesses and corporations through an API. With the usage of jurisdiction and registration code of an organization, the KYB service gathers legitimate information for the organization. Access to official ownership information of authorized businesses is made easy. The KYB Business Verification Services ensures quick and seamless data verification through API while minimizing the time and effort required of the manpower.
KYB verification process is carried out through the following methods:
Business Check: It includes the details regarding the organization’s type, current status, registered address, ultimate beneficial owner, trademark registration, and previous name. The financial details of the organization’s bank account are also provided by the verification service to confirm its credibility.
Inspection of Business Statements: Business statements assist organizations to look after the management changes. Changes in ownership of the business indicate that follow-up information is required for business concerns and matters.
Scrutinizing the Business Filings: Business filings provide legitimate information about the organization’s financials: such as financial statements, shareholder lists, and annual reports.
Searching the Business Networks: It provides details regarding the parent and child entities of the business. Important factors include the country in which the business is registered, the activities of the organization, and the transactions it performs.
Benefits of Business Verification
Regulatory bodies have initiated firm rules and regulations for business organizations to prevent suspicious transactions. KYB is an important factor for better clarity and efficiency for an organization dealing with other businesses. Business verification software enables smooth and accurate verification of businesses.
Legitimate Business Relations
Businesses can use the KYB solution to get a preemptive alert in case of fraud. It provides complete access to the financials and activities of the business to determine its legitimacy. Brand reputation depends on seamless customer due diligence measures. As the identification of ownership of the businesses is crucial for resolving the verification challenges.
Regulatory Compliance
Business face verification solution helps businesses to comply with regulatory compliance. Preventing businesses from non-compliance penalties and establishing business relationships with illegal entities.
