When it comes to forming secure business relationships, Know Your Business customer service is the go-to option. Abbreviated to KYB for short, Know Your Business customer service allows a company to verify how trustworthy and legitimate the client is. This step is quite necessary, particularly for ensuring that the client is not involved in any fraudulent activities. Know Your Business checks fall under global Anti-money Laundering (AML) standards that are mandatory for industries such as financial institutions.
Is The Verification of a Company Necessary?
Whenever a company hires vendors or comes into a business contract with another organization, verification of that company becomes necessary. This practice is carried out to become fully aware of the intentions of the client by carrying out an in-depth analysis of their bank statements and other necessary documents. Typically, information such as the list of UBOs (Ultimate Beneficial Owners), the jurisdiction of the company, registration date, etc. is verified to weed out criminal organizations. In case a company forms a relationship with criminal establishments, it can be liable to pay hefty fines and penalties. Thus, verification of a partner organization is crucial.
Four Ways KYB Customer Services Adds Value
Now that you have understood why business verification services are important, here are four ways how they add value for businesses:
1. Secure Business Relationships
Business relationships are highly dependent on trust, mutual understanding, and common goals. While your partner organization might have similar goals, they might not be completely transparent. For instance, an organization might be implementing corrupt practices discreetly or providing services to criminal parties. This can have dire consequences on all involved companies, leading to hefty fines. To build trust from both sides, Know Your Business checks can be implemented.
KYB customer services provide companies with an opportunity to conduct thorough research when establishing B2B connections. By using identity verification measures and authentication of the ultimate beneficiary chain, companies can easily enhance internal security measures and build secure relationships with other businesses.
2. Compliance with AML Regulations
Financial scams are a recurring dilemma faced by companies worldwide. These include wide-scale data breaches, identity thefts, account takeovers, and even money laundering. When it comes to forming business relationships, companies need to ensure that the client is not adding to these threats faced by society. This is where AML compliance steps in.
Anti-money Laundering regulations were introduced to fulfill one primary aim: detection and prevention of money laundering, and the financing of terrorist organizations. AML compliance refers to any attempts made by an organization to counter such threats. Generally, companies hire third-party service providers to perform KYB verification, as AML compliance is a mandatory procedure. Know Your Business customer service ensures that the client is not associated with high levels of risks. In the KYB process, the clients are screened against the following databases to rule out fraudsters:
- Criminal watch-lists
- Global sanctions
- Politically Exposed Person (PEP) lists
- Adverse media news
3. Enhanced B2B Conversions
Conversion rates are percentages that represent how many B2B relationships ended up being successful. For successful B2B relationships, it is necessary for all involved parties to maintain compliance with international regulations and perform transparent processes. To achieve both of these goals in a single go, Know Your Business customer services are employed. Through corporate verification and AML screening procedures, a sense of trust is built which ultimately leads to enhanced B2B relationships.
4. Minimal Operational Costs
For the purpose of verification, companies typically build a separate team. This is followed by another team of compliance officers that ensure that the company is on the right track to compliance. While this process is still under implementation, most businesses have realized the vulnerabilities found in this method. Firstly, the process of manual verification is considerably time-consuming. Secondly, numerous mistakes and discrepancies can occur due to human errors. Thirdly, human resource costs wipe out company budgets. And lastly, fraudsters can easily manipulate manual security checks and provide fake documents that might be left undetected y the human eye.
Know Your Business customer service allows companies to make use of state-of-the-art technology powered by AI models. The solutions provided not only verify each client within seconds but also filter out legitimate customers from a sea of fraudsters. Through an automated data collection and verification process, AML compliance targets are effortlessly met.
Key Takeaways
- KYB verification has become crucial for the long-term financial stability of a business
- AML compliance regulations have become more stringent, making the use of KYB verification solutions more essential than ever
- Business verification checks also rule out money launders and other fraudulent players, leading to enhanced B2B relationships.
