(KYB) Know Your Business process is not so different from the most widely known and standardized Know Your Customer (KYC) process. The difference from KYC lies in the purpose and intentionality of the process, which is focused on identifying companies and suppliers.
In this article, we will try to explain the KYB definition and its relation to KYC and eKYC concepts.
KYB vs KYC verification: what is KYC?
Know Your Customer, KYC, corresponds to the process carried out by certain companies toidentify and verify the identity of their customers in a compliant way with regulations in force.
It is a process that tries to fight money laundering, terrorist financing, tax crimes and phishing by registering a user as a customer of a company.
When the KYC process is digitalised, we talk about eKYC (electronic Know Your Customer). Processes digitalization in all industries has achieved to boost productivity, diminish costs, eliminate bureaucracy and reduce waiting times from weeks to minutes.
Both KYC & KYB follows AML standards. AML5 or (5AMLD), together with eIDAS, set the digitalization of KYB/KYC processes and grants legal guarantees and total security to carry out client and businesses digital onboarding processes in a secure way and with a high level of trust.
Download this free guide on AML and eIDAS to take advantage of the digitalization of the KYC process.
KNOW YOUR BUSINESS meaning & KYB requirements
What is Know Your Business? The KYB business verification process shares all the features we have seen in defining KYC process. The difference lies in the user to identify: While in the standard process potential clients or users are identified to be registered in a company, Know Your Business process is the one in which the person responsible or legal representative of a business is identified.
Most B2B (Business-to-Business) companies need to carry out due diligence to identify the businesses they work with and fight money laundering and other tax crimes, in addition to ensuring that they work with organizations with security and guarantees. Even so, on the great majority of occasions, as in the financial sector, it is a mandatory requirement of legal KYB AML compliance.
Companies that offer professional services to other companies or those that constantly work with SMEs and freelancers must establish KYB procedures to identify the legal representatives of these businesses and verify their connection with the client company.
As with the KYC process, digital KYB solutions help reduce costs, eliminate bureaucracy and develop control methods that are safer and more reliable than traditional identification methods.
Know Your Business (KYB) checks AND THE BUSINESS-TO-BUSINESS ENVIRONMENT
The use of the KYB (Know Your Business) term, or BKYC (Business Know Your Customer), is relatively recent. The demand for these types of solutions has skyrocketed due to the announcement of various regulations in many states around the world that forced its implementation.
As a result, the digitalization of processes and delocalization of them has caused companies that offer products and services to or after companies (B2B) need to establish Know Your Business procedures. They need to reduce costs and times of administrative procedures and simplify previously tedious and complex processes, while ensuring that relations with their B2B clients are protected and have adequate legal support, also developing internal compliance policies broader regarding relationships with customers and suppliers.
EID, KNOW YOUR BUSINESS REFERENCE PARTNER & KYB solutions
Electronic IDentification develops innovative digital identification solutions supported by artificial intelligence and machine learning. As a RegTech provider of technological solutions, eID accompanies dozens of companies from all sectors in their KYB and KYC online processes to achieve Know Your Business compliance.
VideoID, a unique technology in the market, which meets the security requirements demanded by AML5 and eIDAS, is presented as the market-leading digital IDentification and Video-onboarding standard. An agile, simple and totally digital solution that is equivalent to face-to-face identification.
If you are interested in knowing how to make your KYB onboarding and KYC process go from 3 weeks to 3 minutes, download this guide.