The businesses around the globe are joining forces to make the world truly a global village. The Internet has made things quite easier for the merchants, they have access to fellow merchants in every corner of the world. This independence of the businesses to conduct global business is controlled through AML (Anti Money Laundering) regimes. Such regimes are drafted to control financial criminals lurking among legitimate businesses. AML laws that require the businesses to verify their merchants are generally expressed in a broader term Know Your Business (KYB).
KYB requires businesses to verify the business entities related to their business in any sort of business relationship. All the businesses in B2B or B2C relationship with your business must be verified before initiating any business relationship with them also visit HSSLIVE Plus Two Time Table. It includes the verification of merchants, customers, partners, affiliates, goodwill partners, etc.
Significance of KYB screening
KYB regulations are drafted to control money laundering and terrorist financing around the globe. These regulations require businesses to verify that the other business is not involved in some sort of financial crime, is blacklisted. Also, the Ultimate Beneficial Owners (UBOs) should be verified to make sure that they are not involved in some sort of crime.
This screening can be conducted in real-time through some KYB solution or manually. But most of the businesses these days are using outsourced KYB solutions as they provide a global risk cover.
Compliance with these regulations ensures the security of global businesses and plays part in the growth of global businesses.
Benefits of KYB screening
KYB mitigate the risk of non-compliance
KYB screening of businesses related to your company will help you to reduce the chances of facing non-compliance penalties. The businesses are required to run identity screening on their business affiliates and it is a mandatory action.
Enhances the risk cover
The risk comes from several stakeholders of your business and it helps you to mitigate the risk coming from global entities. KYB screening will identify the risk-bearing entities at the very beginning and helps the businesses to onboard only secure entities.
For example, if a merchant or a company is identified to be in a blacklist in some country than the risk will be mitigated at the very first stage.
Most of the times online KYB screening solutions have the ability to identify if a business is blacklisted in some corner of the world because manual verification doesn’t give global coverage.
Helps in building longterm business relations
KYB screening of the prospects helps businesses to build longterm, trustworthy business relationships by maintaining transparency at every stage of the relationship. Building strong and longterm relations helps businesses to uncover huge growth opportunities. A criminal would not maintain a business relationship for long but flee after conducting the fraud.
KYB compliance and credibility of your business
Compliance always helps businesses in achieving credibility and goodwill. KYB compliance will increase the credibility of a company and will help to achieve good ranking and credit ratings from the rating agencies and regulatory authorities.
Also, compliant businesses have more growth opportunities and credibility in the industry. It also helps as a tool to gain a competitive edge over the competitors.
To wrap up, the digital world has opened many growth ventures for global businesses. Nowadays connecting with businesses and merchants is not a big deal, but it has also increased the risk of fraud. Money launderers, terrorist financiers, and other criminals are present among legitimate businesses and always look for businesses with weak security protocols. Hence the reason, AML regulations require the businesses to perform verification on the businesses and merchants before initiating any relationship with them. KYB screening requires the businesses to practice global compliance so, KYB screening solution is feasible and used widely by global businesses.