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Why KYB Business Verification Is The Best Shield From Business Identity Fraud

AML/CFT cases are constantly trending in the news. As a result, companies worldwide are obliged to comply with changing regulations and improve their B2B relationships. Therefore, financial institutes spend considerable time, resources, and effort complying with set standards and stringent regulations. These businesses identity frauds usually happen on social media platforms when fraudsters create fake profiles and scam loyal business customers. Combating such disastrous frauds is essential to maintaining the integrity of the business. 

Nonetheless, manual KYB verification solutions can be time-consuming and costly, and businesses may not comply with all regulations, further reducing work efficiency. 

But businesses can stop worrying because digital business verification services is a prompt, robust, and cost-effective solution. 

What is “KYB business verification”? 

For beginners, Know Your Customer verification is the verification of the customer before onboarding them similarly know your business verification is the verification of the business before onboarding a business as a client. Customer verification and business verification go hand in hand and are important aspects to establishing compliant business connections. 

Mainly, the KYB business verification solution is to protect the economy of disasters fraudsters want to put the economy through. Examples of financial frauds that have been prevailing are money laundering and terrorist financing other than human and drug trafficking. These unpleasant examples encourage regulatory bodies such as AUSTRAC, FATF, FINTECH to develop strategies and implement policies to overcome threats. 

A report published in the OWI labs stated that there are chances of KYB business verification solutions marketing from USD 5.6 billion to USD 11.8 billion in 2022. 

The regulations even thou are for the benefit of society but have created problems in implementation because of the lack of digital solutions. These processes make manual business verification and customer onboarding havoc and leave businesses prone to financial fraud. 

Why KYB Business Verification Services is the best solution for Business Identity Fraud?

Financial crimes are evolving at bewildering speed with technological advancements. The best and most robust shield to protect a business is to adopt multiple methods that diminish the barriers of identity theft. Regulatory bodies are helping financial institutions and FIUs develop strategies to combat business verification loopholes through the use of AI. Additionally, KYB checks ensure that processes are performed and analyzed accurately through blockchain, ML, and AI to make sure proper collection of data. 

Know Your Business (KYB) is utilized to conduct due diligence on companies and enterprises to ensure they aren’t associated with money laundering operations. It helps in the monitoring of illegal activities or transactions and the evolution of strategies to oppose them. By KYB business verification, corporates determine whether the enterprise they are transacting is genuine or a fraudster.

Artificial Intelligence and KYB Business Verification solutions 

Business verification solutions that are solely based on AI, reduce the cost of compliance for financial institutes while they maintain the standards of KYB business verification. AI simply mimics HI through the use of machines that process like humans. They additionally have the capability to learn new and advanced techniques. 

Artificial intelligence helps businesses diminish manual verification that takes a lot of time to perform simple CDD procedures. For instance, mentioned in the 4th AML directive is stringent audit trails that require businesses to effectively fight identity fraud. Hence, in the 6th AML directive, worldwide countries are required to maintain a registry for financial businesses to access at a central level. 

Blockchain technology assists KYB checks 

Increased effective modifications have appeared in the market in comparison to AI-based technology for business verification solutions.  Blockchain is one of those. If economic sectors embrace Blockchain for KYB business verification, it assists them in verifying their users swiftly and efficiently. With the technology, financial institutions secure and trade the client’s information without maintaining a central register. 

Using an OTP (One-time password), when a business user logs blockchain acquires error-free data into the KYB business verification service. The information is then obtained by a third party  (such as a bank), but all ownership rights remain with the owner ensuring a privacy maintaining verification solution.

To conclude

Current facial recognition technology is somewhat revealed to data breaches originating it questioning to comply appropriately with complicated GDPR standards. There are scarce authentic KYB solution providers that effectively comply with all the standards and ensure that they are updated on changing regulations. With advanced technologies, better and enhanced versions are required to create financial security. kyb checks  before a breach may occur or theft may result is an adequate solution because prevention is better than provoking billions of losses.


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