Learn how businesses can navigate evolving regulations while upholding ethics and efficiency.
In the highly regulated realm of finance, businesses face a continuous challenge: staying compliant with ever-evolving regulations while maintaining operational efficiency and ethical behaviour. While Know Your Customer (KYC) has been the cornerstone of financial institutions' due diligence for years, a critical sub-discipline has emerged on the scene - Know Your Business (KYB). KYB, designed to validate the legitimacy of companies and prevent financial crimes like money laundering, or the financing of crime or terrorism, is now widely recognised as a compliance discipline in its own right across various sectors, especially for those companies who have to record why they made these decisions.
The KYB revolution
KYB, often understood as an extension of KYC, gained prominence due to glaring vulnerabilities in business verification. While KYC practices have been entrenched and understood for decades, KYB addressed a critical gap that allowed bad actors to exploit corporate entities to disguise illicit activities. Europe formalised their KYB regulations in the 4th Anti-Money Laundering (AML) Directive of 2017, followed by the United States incorporating KYB rules into its Customer Due Diligence Requirements for Financial Institutions. This transformative development has unveiled in a new era of due diligence, positioning KYB at the forefront of regulatory compliance.
KYB's reach beyond boundaries
The significance and impact of KYB extends beyond specific industries, encompassing entities such as credit institutions, auditors, cryptocurrency platforms, and even estate agents and conveyancers. This broad applicability underscores KYB's universal relevance, making it crucial for businesses.
Demystifying KYB Processes: A Regulatory Dance
As established, KYB processes are vital for regulated businesses seeking to maintain compliance with their regulatory requirements. So what does it entail? Typically, we see that KYB involves:
These KYB sub-processes not only safeguard against engaging with illicit entities but also underscore a commitment to ethical business practices. Robust KYB is an invaluable asset for all businesses anticipating audits.
Embracing KYB compliance excellence
In today's evolving regulatory landscape, KYB has emerged as a critical aspect of business verification and risk management. It is essential for safeguarding against financial crimes, enhancing due diligence, and upholding regulatory compliance. KYB compliance signifies a proactive commitment to transparency and adherence to regulations; and ensures that financial institutions – and other regulated businesses – are prepared for any AML audit.
How Sikoia can elevate your KYB process
At Sikoia, we understand the complexities and demands of modern KYB compliance. Our Unified Data Platform is your gateway to a simplified and efficient Know Your Business (KYB) process. With it, you can seamlessly navigate the intricacies of customer onboarding and due diligence, all within one comprehensive platform.
Take the first step towards KYB excellence - book a demo or try our dashboard for free.
If you find onboarding, monitoring and risk assessment processes to be inefficient we can help.
Sikoia Ltd is authorized and regulated by the Financial Conduct Authority (FCA) as an Account Information Service Provider (AISP) under the Payment Services Regulations 2017 (FRN: 942979) and as a credit reference provider (FRN: 942616). Sikoia Ltd is a credit broker and not a lender. Credit is subject to status.
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