Anti-fraud and verification platform, Sumsub, is launching a KYB solution for fast and effective verification of companies.
Know-your-business (KYB) verification is performed by companies who want to make sure that the businesses they work with are legit and trustworthy. Generally, the KYB procedure consists of checking company documents in global and local registries, verifying the identities of beneficiaries, and performing special anti-money laundering (AML) checks.
KYB checks are increasingly recommended for institutions in the financial industry. This includes those dealing in mobile payments, online banking, crypto marketplaces and crypto services.
On the regulatory front, KYB is now woven into the guidelines of multiple regulators including the European Banking Authority (EBA) and FATF. This means that certain companies can now face penalties if they fail to perform KYB checks.
“Just recently we witnessed several high-profile incidents that revealed fundamental inadequacies in the procedures of onboarding of legal entities. This problem affected even the giants, such as Credit Suisse. Indeed, the vast majority of obliged entities already use modern technologies and solutions when they onboard individuals; this is the new normal. But when it comes to KYB we still see manual work and mistakes that are absolutely normal for and inherent to the human factor. Some of these mistakes may be innocent but others may open the door to huge money laundering schemes and ruin reputations of transnational financial businesses and even countries,” says Tony Petrov, Sumsub’s Chief Legal Officer.“Some time ago our existing clients identified this risk as a problem and asked us whether we could extend our current ecosystem to include automated onboarding of legal entities as well. And we did it. Now we see that the demand for KYB is growing day after day; international policymakers like EBA are mentioning KYB among the recommended innovative technologies. We are welcoming the global demand to make legal entity checks a really meaningful part of due diligence procedures.”
Most companies do not have enough resources or expertise to handle KYB checks, as they often lack access to consolidated public resources of company information (global and local registries, watchlists, etc). Therefore, KYB processes are usually outsourced to compliance officers who perform them manually—a process that may take up to three working days (or 72 hours per company) to complete due to the difficulty of collecting all of the required info and documentation. Ultimately, these long wait times turn clients towards competitors.