Know Your Business (KYB) – confirm the legitimacy of a company
Know your business (KYB) is a verification process that legal organisations need to follow in order to know who they are doing business with. This hinders dishonest and fraudulent businesses from slipping through the cracks, preventing illegal transactional activities entering financial systems.
What is the difference between KYB and KYC?
KYB is similar to KYC (Know Your Customer) in that they both share the common goal of allowing your business to follow AML (Anti Money Laundering) regulations, creating a safer environment for transactional operations. The main difference is that KYB focuses on businesses, while KYC is for individuals.
KYB processes
KYB processes typically involve the collection of information such as the business's name, address, and identification documents, as well as its financial and transactional history. This information is used to verify the business's identity and to assess its risk profile.
Although KYB focuses on companies, it is important to remember that behind every transaction is an individual or entity. This is known as the UBO, or Ultimate Beneficial Owner.
In summary
In today's globalised business environment, it is increasingly important for organisations to properly vet their partners and clients in order to protect themselves from potential risks. By implementing a robust KYB process, businesses can ensure that they are dealing with reputable and trustworthy companies, and avoid potential fines and reputational damage.
In addition to protecting against financial crime, KYB can also help businesses to build trust and confidence with their partners and clients, and create long-term relationships that are built on mutual respect and understanding. By taking the time to properly verify the identity of their business partners, organizations can create a foundation of trust that is essential for success in today's fast-paced and highly competitive business world.
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