KYB onboarding as first step in successful partnership
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When it comes to meaningful and lasting customer relationships, first impressions have long since ceased to be the path to success. More and more companies are taking advantage of KYB onboarding new associates. Anti-money laundering regulations describe many ways in which companies in the financial industry should monitor and protect against potential money laundering activities. Conducting identity checks for new and existing customers is an essential part of this. In fact, in the financial industry, this is a requirement. For other industries, the KYB process certainly comes in handy as well. KYB (Know Your Business) is a compliance term used to describe the process of verifying the legitimacy of a customer’s identity. KYB onboarding is increasingly the first step in a successful partnership. A customer survey, so to speak, is conducted with new relationships, and there is ongoing monitoring of existing relationships where business records are kept.
KYB data improves onboarding process
The overall goal of the KYB onboarding process is to reduce risk on your end. In fact, by collecting the right customer data, you avoid doing business with fraudulent or high-risk companies and ensure that you can onboard new relationships more quickly and efficiently. The time required to review and initiate a customer’s requests can be significantly reduced compared to when you miss important information. Your customers will always appreciate a faster and more efficient onboarding process, so customer satisfaction will be built early and they are more likely to become loyal to your company.
Verify identity and authenticity of your business associate
KYB requirements for the financial industry are described in national AML regulations. AML is the abbreviation for Anti Money Laundering. In Europe, the AML is the Anti-Money Laundering Directive; a set of legal requirements issued by the European Union containing rules to combat money laundering and terrorist financing by EU member states. For companies, not in the financial sector, the KYB process can still make a lot of sense as more and more companies do business online, from signing documents to purchasing products and services. More and more companies are also doing business internationally. In either case, the KYB process is an effective way to verify the identity and authenticity of your business associate.
Basic information for a sound KYB process
KYB’s main focus is establishing the identity and ownership of the company being traded with. Is it a legitimate business or just a shell company? This clarifies who benefits from the company’s financial activities. The KYB process should identify the ultimate owner of the business. Other important data needed to best investigate the identity and authenticity of your relationship are company name, business address, phone number, number of employees, business activity, legal form, real estate information, trade names and concern relationships. The initial process when starting a new relationship is important, but so is ongoing monitoring as the relationship develops.
Implementing KYB in your database with API integration
Data security and regulatory compliance are crucial today and essential for companies to apply KYB processes to ensure the integrity of their databases. An effective way to implement KYB in your database is to use Application Programming Interfaces (APIs). The first step to implementing KYB is to define the KYB criteria for your business. This is followed by choosing an appropriate KYB API. It is crucial to choose an API that meets your company’s specific needs and regulations. NextBI ‘s API can be customized accordingly and can also be integrated into your database environment. This includes generating API keys, setting up authorization methods and configuring endpoints. After the KYB API is successfully integrated, you can begin requesting and receiving KYB data for business entities you do business with. The KYB process can be fully automated, and periodic checks can be set up to update and verify the data in your database so that it always matches the latest business entity information.
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