Verification Of The Company Is Necessary Before You Join Hands With Them

Increasing online frauds, data breaches and severe crimes like money laundering have made businesses rethink their security policies. From offline to online platforms, and now from identifying customers to verify every entity businesses would collaborate with, organizations are now opting for proficient ways to make their workflow fraud-free. Verification of the company has become an essential element in compliance regulations.

A Bit On KYB

Business verification services consist of all the processes that would verify any business entity. By verifying the company and the associated information like their line of work, businesses can verify everything using know your business services. The identity of any corporate company can be verified using its official documents. Verifying Ultimate beneficial owners (UBOs) is also essential using the Know Your Customer (KYC) solutions. As we check if customers are associated with any kind of illegal activities or not in (KYC), we verify the networks businesses ever interacted with through (KYB). 

Types of KYB checks

It is not enough to leave the verification just to the customers. Every possible identity businesses would ever interact with must be authenticated to elude the possible effects of fraud. Following are the two ways through which companies can be verified through know your business process:

1.     Manual KYB Checks

The era before the internet was used to be simpler in almost every way. Businesses used to proceed in physical workstations that meant direct interaction with the customers and other merchants. Verification of companies also used to happen manually which means vendors have to meet in person to get their business verification done. Manual verification processes were done with the help of the official teams and it took almost days to complete the procedure. Implications of the human hand behind the procedure make room for incorrect consequences that may occur.

Manual processes wherever they are done, require more resources as compared to digital ones. Human resources where they incorporate possibilities of errors, they ask for ways that are uneconomical.

2.     Semi-Automated KYB Checks

Technology is advancing day by day. Developers now look for ways to perform every single task digitally. From online banking to doing groceries, the internet is becoming the most important part of todays’ people. Kyb checks customer service can also be performed through online mediums. The documents of the corporate entities are analyzed online and the verification results display whether the company is genuine or any shell entity.

Semi-automated company verification highlights the authenticity of the entities within minutes and also holds fewer chances of errors. The digitized verification also is cost-effective saving funds for organizations.

Perils Of Lacking KYB Checks

The authorities that underestimate the importance of business verification services are the small businesses. They have the capacity to collaborate with the third party but are not mentally rich enough to invest in the necessary verification software. There are many side effects if enterprises do not go through a thorough identity check while verifying companies. Temporary benefits can lead firms to face major legal proceedings for participating in any illegal activity.

Know Your Business processes are a desperate need for the companies working in the financial fields. Banks and related financial institutes can face identity thefts and money laundering. Fraudsters have now become more sophisticated in their work operations. They do not hide behind other peoples’ identities nor do they try to attack from behind. They have understood the fact that the more you try to hide your true identity, the more easily you will be caught by the law. Rather they now prefer to work openly. To fool an authentic business, criminals make a synthetic company and pretend themselves as the real ones.

They make all the documents necessary to support their existence while in reality they only have the paper-based identity. These shell companies make the fool out of companies that think of spending money on verification systems as the wastage of funds. Once spoofing the systems, shell companies destroy the images of genuine entities and affect their revenue as well.

Summing it up

With Know Your Customer (KYC) becoming insufficient, businesses are becoming vigilant in verifying the companies through business verification services. Fraudsters nowadays try to pretend themselves as the true identity by making shell companies. Organizations with weak or non-existent compliance regulations easily become victims of criminals and experience unfortunate events.

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