Why KYB and KYC Verification Matters to Your Business_ _ IDmerit

1. KYB and KYC Veri?cation: Why it Matters to Your Business 04 Jan  By Tony Raval |  In KYB, KYC | Identity veri?cation has long been a part of customer onboarding. The digitization of our society has no need for ID card veri?cation but altered how we perform identity veri?cation and why we need it. In the past, veri?cation of business entities was managed in-house with lengthy physical background s there was a pre-existing relationship. This opened the door to fraud and bias in the customer onboard

2. move to digital did not do much to alter the current status quo. Customer onboarding remained in high Business to Business (B2B) still lagged. The introduction of regulations and strict guidelines for due diligence made it easier for banks, ?nancia businesses to onboard customers while increasing protection for all parties. Still, fraud increased, and customers’ and business’ data were still at risk. As the responsibility fell to or comply and implement these guidelines, many still overlooked creating e?ective ID validation system gaps in the onboarding and compliance process.   Why KYC Veri?cation Did not Work for B2B?   Know Your Customer (KYC) in the very name and policies focused on individual customers. This left b other ?nancial institutions to interpret how to treat their business clients. Too many times that meant la and almost non-existent B2B customer onboarding. Customers and businesses alike paid for that lack of security protocols with increased money launder identity theft, malware, and virus attacks, hacked accounts, stolen data, and eventually money. Unless was deemed high risk, global ID veri?cation and document veri?cation services were seen as unneces due diligence was the norm. For complete customer due diligence, there were four crucial elements for KYC veri?cation. ID validation and document veri?cation

3. Bene?cial ownership identi?cation and veri?cation Understanding the nature and purpose of customer relationships to develop a risk pro?le Ongoing behavior monitoring and transaction screening for reporting suspicious transactions and d management These didn’t take into consideration organizational structure, who were the key decision-makers, and i from the ever-changing signatories. Nor did it consider who had record access, cross-border payment customers and employees or suppliers. Adapting the KYC acronym to Know Your Client was meant to be a more inclusive term to cover corpo Sadly, many did not get the memo and B2B customer veri?cation continued to be left up to organizatio regulators once again stepped in.   What KYB does that KYC Veri?cation Cannot Do?   With 2% to 5% of the global GDP being laundered every year and an estimated 90% of money launder remaining undetected, according to the United Nations (UN), it’s clear KYC veri?cation alone can’t get Financial institutions are the ?rst to pay the price of the losing battle against money laundering and oth crimes. In 2016, Financial Crimes Enforcement Network (FinCen) addressed the oversight of KYC and implemented Know Your Business (KYB) to provide the same Anti-Money Laundering (AML) policies address Combatting the Financing of Terrorism (CFT) laws for businesses.

4. As KYB or the US Customer Due Diligence Requirements for Financial Institutions (CDD) or the EU’s Laundering Directive (5AMLD), was put in motion, it set about increasing ?nes for non-compliance. Therefore, ensured some e?ort was made by all parties to design and execute a KYB veri?cation proce KYB is to minimize the risk of money laundering and other fraudulent activities, identify Ultimate Bene Owners (UBO), and monitor and screen businesses against blacklists and grey lists. Aside from the basic customer due diligence that is part of the requirements for KYB, businesses are r provide: Company name Company address Business registration number Operational status Incorporation date Key management personnel Requirements and policies may vary from institution to business. Some may require additional informa KYB and KYC veri?cation processes. Additional Personally Identi?able Information (PII) may include n addresses of board members and key decision-makers. Some businesses can demand that your business be AML/CTF compliant before you do business wit Depending on the nature of your business, Know Your Customer’s Customer (KYCC) requirements ma After Germany’s Wirecard scandal in 2020, banks and other ?nancial institutions saw the reasoning be the execution was another matter. Due to some business entities like payment providers having multip

5. who in turn did business and had multiple customers, it was a nightmare to attempt KYCC without com compliance of all entities. Listing all Fintech or consulting companies as high risk at the onset seems u just what happens when banks can’t identify who your business serves. By backing KYCC with AML policies and automation, regulators and implementers were able to get a KYCC and prevent the creation of more dummy corporations and reduce the likelihood of mislabeling ‘high risk’. Ongoing monitoring is a requirement of KYC Veri?cation, but for KYB ongoing monitoring appears to b high-risk entities. Then there is the ongoing issue of tracking down UBO’s which can drag out the corp process for 2 to 3 months! These factors create frustration and despondency for ?nancial institutions a corporate clients.   The Importance of KYB For Financial Institutions   Banks and other ?nancial institutions have always been the centralized hub through which all commer They have a massive responsibility in implementing due diligence at every stage of the customer jour era, a breach in that ?nancial system can have global ?nancial and security rami?cations. Money laundering and fraud are the least of the potential issues. Banks can become unwitting parties human tra?cking, illegal drugs, and global terror. Using enhanced due diligence methods in the KYB a veri?cation process can assist banks in KYCC and lessen the chance of onboarding non-compliant ent

6. The ?nance industry knows well the war it is in. Having been the focus of constant cyberattacks, scand embezzlement, and fraud schemes, banks, and other ?nancial institutions recognized the power of KY compliance. However, many Small and Medium Businesses (SMB’s) do not. Even some large corporati AML/KYC compliance over the cost of customer onboarding. Assumptions within other industries end up putting banks at risk. One employer hired on his gut, think entry-level position with no need for invasive background checks. A few years later HR is promoting th key decision-making position assuming the background check was done before. We all know Jim so well now. All it takes is a few parties to assume the others are doing their part whil basic customer due diligence without document or ID validation. Protecting the ?nancial industry begins with everyone within and outside the industry doing their part compliance. Fines for non-compliance should not be the only reason companies seek KYC veri?cation moral and ethical responsibility for all companies, from SMBs to large corporations to invest in strenuo veri?cation services. Making sure who you onboard are trustworthy is the key to preventing fraudulent activities and streng security. That is why executing an e?ective KYB and KYC veri?cation process is so important to ?nanci The KYB veri?cation process requires business entities to enact global ID veri?cation, behavior monito risk and sustainability of B2B customers and their clients before establishing a business relationship w When businesses and banks conduct ongoing behavior monitoring, they ensure that transactions are their risk pro?le. Proper digital identity management ensures employee records, and other key informa and kept up to date.

7. Knowing the business partners and high-risk customers of a business keeps your company’s reputatio from criminal negligence due to enabling the ?ow of illicit funds.   How to Make Automated KYB and KYC Veri?cation the No Business?   Developing your KYB and KYC veri?cation process is a great start in achieving AML/KYC compliance. European Union (EU), UK, US, and other local and regional laws and regulations concerning AML/CFT great way to ensure transparency in ?nancial operations. Having ready access to the relevant global w lists and sanction lists helps with ongoing customer screening and risk assessment. As noted, before, veri?cation for business entities can be a time-consuming process and even ID card so simple without the right global ID veri?cation system. To ensure you meet AML/KYC compliance, your KYC veri?cation system must have access to the righ able to quickly validate ID and documents, check watchlists and assess risk. Most identity veri?cation s can only provide ID validation for customers, but no means for behavior monitoring nor do they provid veri?cation services. The drawback to the do-it-yourself approach when it comes to creating your own KYC veri?cation sys collection and digital identity management. Aside from using customer information to keep customers upcoming changes and events, businesses sometimes forget there are also regulations for data hand

8. Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) help consumers retain co data. And now Japan has introduced its version of the GDPR, Act on Protection of Personal Information (AP the same far-reaching implications for third-party data providers outside of Japan as the GDPR. These data regulations and digital identity management should be part of the cost of customer onboa when dealing with global ID veri?cation. Identity veri?cation service providers also need to cater to mo veri?cation. This is the one grey area that banks and ?nancial institutions have problems: combining their existing c onboarding process with mobile ID veri?cation. Automated customer onboarding systems powered by arti?cial intelligence can help Bridge the gap for banks and businesses and deliver an automated KYC veri?cation process that can d information faster than any human ever could. As part of B2B customer onboarding, KYB and KYCC sh sync and with ?awless online ID veri?cation.   IDMkyX As Part of Your KYB and KYC Veri?cation Strategy   Knowing what to do and how to do it are two very di?erent things and that’s the problem with most ide services providers. They claim they know what to do, but either does not know how to do it or do not h capabilities to do it ?awlessly.

9. At IDMERIT, we know how to create an automated customer onboarding system that checks all the bo enhanced due diligence and mobile ID veri?cation ensuring AML/KYC compliance. Our document ver will work smoothly in the background of your ID validation systems and assist in digital identity manag Our behavior monitoring system uses biometric data to mitigate suspicious behavior. Because of the internet, no matter how local your business is, we all end up interacting with someone country. That is why global ID veri?cation is part of our online ID veri?cation system. Using device ?ngerprinting and IDMsocial, we can even identify bad actors who try to hide behind the fake social media pro?les. Our IDMkyX platform, can quickly and e?ciently identify various business in bene?cial owners and handle automated KYC veri?cation to the highest standard. IDMtrust can be seamlessly integrated into your existing ID validation systems to assess a customer o No matter customer, B2B, SMB, or a large corporation, IDMERIT’s IDMkyX platform has the global reac and digital identity management systems in place to give your business an automated KYC process th the cost of customer onboarding. Let us prove that we can verify anyone, anytime and anywhere. Talk to IDMERIT today!