KYC and KYB verification are regulatory requirements that protect your company and ensure you're not doing business with criminals. Compliance is a big deal. There are many regulations in place that help prevent financial crimes like money laundering and terrorist funding. Companies must comply. Otherwise, they face steep penalties and many risks.

Both KYC and KYB revolve around verification and due diligence. However, they apply to different entities and involve distinct steps to remain compliant.

What is KYC?

KYC stands for Know Your Customer. It's a regulatory requirement that applies to banks, financial institutions, fintech companies, and any other organization that handles monetary transactions. KYC aims to identify the customer you're doing business with.

KYC verification should occur before someone opens an account. That way, there's a connection to a real-life person. Verification platforms can run data through known watchlists, helping companies avoid dealing with known money launderers or financial crime offenders. It also makes persecuting future crimes much more straightforward.

Typically, complying with KYC regulations involves collecting identifying information and appropriate documentation. Companies can then verify that data with KYC platforms to stay protected and compliant.

What is KYB?

KYB is an acronym for Know Your Business and applies to companies that work with other organizations. This regulatory requirement is necessary whether the relationship is through partnerships or as a B2B client. The ultimate goal of KYB verification is the same as KYC verification. However, the steps to get there are more involved and complex.

Businesses can have corporate entities that span international borders and regulatory environments. It's a tall order involving detailed legal filings, scouring financial statements, and more. Fortunately, verification platforms can make KYB more approachable for businesses of any size.

Staying Compliant

Financial crimes happen more often than people realize. With increasing globalization and easy access to financial services through the Internet, criminals have all the tools they need to wreak havoc. These regulatory requirements can help put a stop to criminal activity. They require more time and resources, but the right verification platform can streamline necessary processes to keep businesses safe.

Author Resource:-

Emily Clarke writes about identity verification and business verification service. You can find her thoughts at identity verification system blog.