Authorities are never at rest in preventing crimes like identity thefts, data breaches, and illegitimate registrations. There has been a significant increase in identity theft, Fortunately indicates, where on average 15 million customers experience it every year. Not just this, businesses also face identity theft while partnering with other corporate firms. Not all companies are sure to bring high revenues or uplift status. Some are just imposters or fraudsters in action to manipulate the legitimate operations for self benefits.
Therefore, businesses need authentic KYB checks to eliminate the chances of illegitimate exposures. Moreover, Know Your Business regulations mandates companies to cross-verify and validate their partnering firms. Verifying businesses also provides robust verification of owners who are camouflaging the name of any old firm. Therefore, AI and ML-powered processes are taking companies’ operations to another level because they are less prone to errors. Further details are incorporated in the blog further on.
Business Verification Services – Pacing Up the KYB Process
Know Your Business (KYB) is a part of the Know Your Customer (KYC). Authorities mandate industries to strictly comply with these standards. According to Shufti Pro News, the requirements mandate parent companies to ensure that they are registering with the firms that do not possess any threat. For active compliance, businesses should employ automated solutions for seamlessly verifying businesses as well as customers online.
As the regulatory authorities mandate, parent companies and owners should verify the identity and existence of businesses. This is now easier with AI-powered company verification services as they allow access to the official commercial register. This ultimately makes the due diligence verification instantaneous. The verification process involves the following steps:
Identification of Business Networks
Company verification services provide detailed information about partnering firms. These include the type of company, services they offer, structure, internal operations, and financial standing. Business networks further include the country of registration, authentic identity information, and transactions subsidiaries perform.
Cross and Background Checks on Business
Background checks on the partnering firm are the most important as they provide insight into what the company is and how it functions. Businesses are mandated to verify registered address, type of company, status, UBOs, trademark details, and previous identity if any.
Follow-up with Business Activities
Next in line in KYB checks are the business statements. These include communication regarding the minor and major changes within the politics, strategies, and management. Here, the advanced technological solutions help businesses achieve constant follow-up with the affiliated companies.
Access Business FIlings
Last in the classification is business filings. These include information regarding partnering firms that are instantly verifiable. They mostly include financial information about the firm. Moreover, these further include, financial records, transaction statements, operations details, and links to downloadable sources including annual reports and shareholder lists.
Know Your Business Checks – Why is it Necessary for Companies?
Ensuring regulatory compliance and fraud preventions are the obvious functions of Know Your Business checks. However, AI-powered solutions are speeding the process because manual verifiers take weeks to fetch results. And the current criminal speed becomes hard to match. Therefore, businesses require automated services that provide instant results with no accuracy. This way, businesses can expand their operations to whichever region they want and drive high revenues.
Shufti Pro Funding indicates that AI-backed verifying companies’ processes allow access to global registers and databases that makest the verification seamless. Why business verification is a necessity for companies is explained later on:
Detects and Deter Criminal Threats and Prevents Fraud
Business verification services detect and prevent criminals from registering their fake companies. This minimizes financial fraud and addresses reputational damages in time. Fraudsters are technologically equipped and easily bypass verification processes. Therefore, businesses need robust and authentic systems to restrict criminals from manipulating legitimate operations. Not just this, these automated services identify red flags ahead of time. These include inaccurate office addresses, lack of credit records, mistakes or forgeries in registration documents, and non-communicated managerial changes.
Ensure Seamless Compliance with KYB Regulations
There are various standards in Know Your Business regulations including AML checks and identity verification. These are there for multiple reasons. For instance, to access company-based risk factors, ensure they are not laundering money, and prevent financial crimes, and other illicit activities.
There are several regulatory watchdogs like FATF and European Banking Authority (EBA) which monitor the businesses’ operations. They can also ensure that businesses are verifying companies and identifying UBOs while partnering with firms.
Businesses nowadays can partner with numerous available startups or corporate firms for uplifting their status and broadening their operations. However, before doing so, they carry KYB checks to ensure they are not signing a contract with a fraud firm. This is what Know Your Business regulations mandate. Hence, automated verifying businesses process are businesses’ protection shields.