Fraudsters are creative. From shell companies to hidden ownership structures, they look for every possible loophole to move money without detection. Regulators know this, which is why one requirement has become non-negotiable for financial institutions, payment providers, and even marketplaces: you must know the businesses you deal with.
This is where Know Your Business (KYB) comes in. Similar to Know Your Customer (KYC) for individuals, KYB focuses on verifying companies, their ownership structures, and the people behind them. Done right, it protects against money laundering, terrorism financing, and fraud—while also building trust with customers and partners.
What Is Know Your Business (KYB)?
At its core, KYB is the process of making sure a company really exists, operates legally, and isn’t a front for illicit activity. That means checking incorporation records, validating licenses, confirming who the ultimate beneficial owners (UBOs) are, and making sure the business isn’t linked to sanctions lists or adverse media.
In simple terms, KYB answers a few basic but critical questions:
For banks, FinTechs, and enterprises, knowing a company’s business standards will ultimately determine whether that partnership is trustworthy—or dangerous.
KYB in Banking and Finance
So, what does KYB mean in banking? It’s a cornerstone of AML (Anti-Money Laundering) and CTF (Counter-Terrorist Financing) obligations. Banks and financial institutions must verify corporate clients before opening accounts, issuing loans, or processing payments.
This isn’t just about checking a box. Without strong KYB, banks could unknowingly onboard shell companies or sanctioned entities. FinTechs and payment providers face the same risks—and in highly regulated markets like Europe and the U.S., failing to meet KYB requirements can mean heavy fines and reputational damage.
Importantly, KYB isn’t a one-time event. A company that looked legitimate at onboarding can change ownership, get added to sanctions lists, or become involved in fraud later. That’s why continuous monitoring is as important as the initial verification.
Who Needs KYB?
While banks were the first to adopt KYB, the requirement now extends across many industries. FinTechs use it when onboarding merchants and gig-economy platforms. Insurance providers rely on KYB to validate corporate policyholders. Law firms, auditors, and consultants use it to protect themselves from representing risky entities. Even B2B marketplaces and procurement platforms need KYB to prevent fraud in their supply chains.
In short, if your organization deals with businesses at scale—whether as clients, partners, or vendors—you need KYB.
The KYB Process
The KYB process follows a risk-based due diligence model. It usually begins with verifying company registration details against official databases, collecting incorporation certificates, and confirming that the business is active.
From there, compliance teams dig deeper into ownership. Identifying UBOs is critical, especially when complex structures or offshore entities are involved. Once owners are mapped, both the company and its executives are screened against sanctions and politically exposed persons (PEP) lists. Negative news—such as links to fraud, corruption, or tax evasion—is also reviewed.
A risk profile is then assigned, and depending on the results, the company may go through enhanced due diligence. Crucially, monitoring doesn’t stop after onboarding. Ongoing reviews track changes in ownership, new sanctions, or risk events so that businesses aren’t blindsided later.
KYB Requirements Around the World
While the details vary, most regulators agree on the essentials of KYB. The Financial Action Task Force (FATF) sets international standards, emphasizing UBO identification and risk-based monitoring. The EU requires beneficial ownership registers under AMLD5/6. In the U.S., the Corporate Transparency Act compels companies to disclose UBOs to FinCEN. The UK and APAC regulators like MAS (Singapore) and AUSTRAC (Australia) have their own rules, but the principles are consistent: verify registration, confirm ownership, and keep monitoring.
KYB vs Corporate KYC
It’s easy to confuse corporate KYC with KYB. Both matter, but they focus on different things. Corporate KYC is about verifying the individuals tied to a company—directors, signatories, executives—using IDs and background checks. KYB, on the other hand, looks at the business itself: its registration, ownership, structure, and risk exposure.
In practice, compliance teams use both together to get the full picture.
Why KYB Matters
KYB isn’t just about avoiding fines. It’s about protecting your business from reputational damage, fraud, and future legal disputes. Verifying businesses reduces the risk of onboarding fake suppliers, prevents money launderers from hiding behind shell companies, and reassures investors and partners that your institution runs a clean operation.
For global institutions, robust KYB also streamlines operations by preventing costly remediation later. Trust and transparency become competitive advantages when you can prove you know your partners.
The Challenges of KYB
Of course, KYB isn’t simple. Multi-layered corporate structures make UBO discovery difficult, especially when offshore entities are involved. Regulations differ across regions, making compliance harder for multinational companies. Corporate records aren’t always up to date, creating gaps in accuracy. And for teams still using manual checks, the process is slow and resource-intensive.
Cases like Danske Bank’s €200B scandal or the FTX collapse show just how much damage weak KYB can cause—both financially and reputationally.
Automating KYB
That’s why automation has become the future of KYB. Instead of paper-driven checks, modern platforms use APIs, AI, and global data sources to run real-time verifications. Automated KYB can check company registries across 150+ countries, map UBOs instantly, and continuously screen for sanctions or regulatory changes.
The benefits are clear: onboarding that once took days can now happen in minutes, accuracy improves with fewer false positives, and compliance scales to thousands of checks without slowing down operations.
How BusinessScreen.com Helps
At BusinessScreen.com, we make KYB both compliant and efficient. Our platform combines global registry access, UBO verification, sanctions and PEP screening, and ongoing monitoring in a single solution.
We help banks, FinTechs, and enterprises:
The result: faster onboarding, stronger fraud prevention, and full regulatory alignment.
FAQs About KYB
What is KYB in banking?
It’s the process of verifying corporate clients before providing services, required under AML and CTF laws.
What are KYB requirements?
They include company registration checks, UBO identification, sanctions screening, and ongoing monitoring.
What’s the difference between corporate KYC and KYB?
KYC verifies individuals, while KYB verifies the company itself.
What is a KYB check?
It’s a structured verification to ensure a business is legitimate and not linked to financial crime.
Conclusion
Know Your Business (KYB) is more than a regulatory checkbox. It’s the foundation of safe financial systems and transparent commercial partnerships. By knowing exactly who you’re dealing with, you protect your business from fraud, comply with global regulations, and build trust with customers and investors.
At BusinessScreen.com, we help organizations automate KYB, making compliance not just manageable but a competitive advantage. In today’s interconnected world, trust begins with knowing your business.
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