To ensure the success of a business and the elimination of fraud, effective KYB measures need to be established throughout the organization. The Know Your Business (KYB) process begins with the onboarding of corporate clients and since the pandemic, the integration of digital solutions has become a vital step for KYB compliance.
Regardless of the usefulness of digital services in keeping up with regulations, businesses operating in the financial industry are reluctant to rely on technologies. Countless studies point toward the fact that focusing on a solely paper-based process for onboarding clients hurts businesses in the long run. Regulatory bodies all over the globe are encouraging businesses to take the first step toward digital transformation.
While digital transformation isn’t easy to achieve, with the integration of DIRO’s online document verification software, the process can become faster, efficient, and seamless. With DIRO, it can be easy to comply with regulations, perform due diligence checks and reduce friction from the customer onboarding.
KYB is the pass or fails point of a new relationship with a corporate client. KYB compliance came into existence because of some loopholes in the older KYC (Know Your Customer) compliance. With KYB, businesses can verify the clientele and figure out the risk factors in the initial stages of a relationship. The KYB regulation covers all the legal and regulatory processes when onboarding a new client.
Usually, there are 4 main steps of KYB verification:
Companies need to do their due diligence to figure out any criminal activity like money laundering and terrorist funding. It is vital to understand that KYB is not a one-time audit but an ongoing process that requires continuous monitoring to verify that everything is squeaky clean.
Technology is ever-evolving and with the help of the right technologies, you can help future-proof your business. The need for KYB regulation is growing, not just because of the regulatory requirement, but because the ability to onboard clients is essential.
The traditional KYB processes can be improved through numerous automated verifications, AI, and data assessment. All of it can be done faster than a person ever could. Automations allow companies to react quickly and work in accordance to enforce compliance procedures without having to spend more on their teams.
This, in turn, helps in delivering an experience to the onboarding that is more secure, convenient, and sustainable. According to a recent report, companies that achieved successful KYB compliance save an average of $1.45 million per year in compliance costs.
Building an in-house KYB digital onboarding system from nothing is super expensive, time-consuming and there’s a lot of room for error. With the integration of DIRO online document verification software, businesses can effectively comply with KYB regulations and mitigate the risk of financial fraud.