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Why KYB solutions need to be adaptive to business needs.Article Published on November 25th, 2019. View Article on Medici.
The process of onboarding a new entity or entering into a new business relationship traditionally involves substantial manual techniques, including intensive paperwork from filling forms, checking boxes, or performing thorough background checks. Entering a business relationship requires the same prudence many businesses implement for their B2C KYC risk mitigation. The regulatory environment such as the Payment Services Directive (PSD2), Anti-Money Laundering Directive (AML5), and General Data Protection Regulation(GDPR) has further mandated business onboarding requirements. Know Your Business (KYB) is a process of identifying companies, their Ultimate Beneficial Owners (UBOs), their CEOs and directors along with their compliance adherence.
The need for a KYB process is evident as our online rapidly enhances, especially for organizations that are under scrutiny like financial service providers. The need to know the risk within a business relationship initial onboarding can mean the difference between staying in business and crashing out completely. With all these complexities and the need to fulfil compliance requirements, companies have turned to technology to get ahead of the curve and automate the due-diligence underwriting process.
Several effective solutions in the market offer a better alternative to manual compliance and risk mitigation checks and possess the following characteristics:
1. Extensive global database: Identity is all about information. A successful KYB process will require access to data from various sources, including global corporate registers, government registers, public records, international PEP records, and sanction lists.
2. Real-time and continuous monitoring capability: KYB is an on-going process due to the dynamic nature of onboarded business relationships online. The constant addition or updates of information from varying sources requires a service that can adapt to fast-changing environments and keep companies compliant.
3. Cross-border and multi-jurisdictional capability: Giving companies the ability to onboard businesses across borders regardless of territory and local or international compliance obligations, thereby accelerating the onboarding process and creating long-lasting relationships.
4. Efficient risk management controls: KYB is not just for compliance; it is a leading data-driven dynamic fraud prevention process. Businesses and their associated customers and transactions are verified with a certain level of subtlety without additional friction to the online experience.
5. Simplicity and API integration: Since many organizations employ an array of various systems an API end-point enables ease of integration for quick retrieval of information, sharing to appropriate parties, coordinating responses, and flagging cases for additional review. A simplified dashboard makes consumption of data accessible and adds to a great user experience. Global data points and hundreds of KYB/KYC data sources are harmonized through one API access, giving a 360-view of the business or customer. Aside from reducing costs, this global view of compliance and fraud prevention improves reaction times, be it in the prevention or accessing real-time intelligence for various risk mitigation segmentations.
KYC/KYB SOLUTION PROVIDERS
4Stop’s KYB Solution addresses the needs of modern global businesses by making the processes of KYC and KYB more robust, agile and consequential through technology. They provide companies with a turnkey solution to efficiently address onboarding risk analysis as well as regulatory compliance adherence in a fully automated manner. They are dramatically streamlining business underwriting and saving organisations a lot of time and unnecessary paperwork. Furthermore, their solution provides access to global best practices through shared experiences and network rather than the unitary siloed approach to information management that most organisations have used in the past.
Through one API integration, businesses have access to one of the world’s largest KYC/KYB data orchestration hubs where they can activate any data source in real-time. All relevant data is in one centralised view for easy analysis and investigation of real-time verifications and reports. The 4Stop KYB solution fully supports a wide range of compliance workflows per region and market with full customisation on data due-diligence to underwrite and onboard businesses quickly while maintaining business relationships with ease. Companies can select relevant parameters attuned to their individual requirements. From locating an entity in an advanced business search identifier to performing comprehensive data analysis on businesses identity, share structure, operational performance, compliance adherence, online presence and credit while obtaining supporting registry documentation. Furthermore, a deep dive KYC verification on any UBO and Director identified can be activated in one-click. Risk analysis, profiling and recommendations are conducted in real-time, and all underwriting files are assessable in one modern, feature-rich case management platform.
For many entities underwriting businesses can take as much as 26 days to processes. Turning to data-driven due-diligence methods allows entities to improve their onboarding times and acceptance rates. Partnering with an orchestration hub comes with many advantages and eliminates the need to integrate and manage multiple third-party data providers; reduce data costs, manual processes and resources. The industry average is USD $165 per business onboard. An orchestration hub, like 4Stop, allows for entities to reduce this cost to as low as USD $10 per onboard through an enabled pre-screening process. Businesses are quickly evaluated prior granular due-diligence is performed with built-in cascading verification logic to ensure the best data output, coverage and performance.
The advancement in technology in the area of compliance historically has lagged. However, as we continue to see evolutions in regulatory obligations worldwide, many technology providers within the RegTech sector are striving to simplify and future-proof processes. Partnering with orchestration hubs are proving to be the future in leading risk mitigation with their extensive data hubs (that are continuously expanding) and endless possibilities on verifications, rule configurations and advanced analysis intelligence.
Businesses can enrich their risk mitigation protocols to increase authorisation rates, profitability and obtain future-proofed fraud prevention and compliance adherence with little to no touch on their business.