Know your business protection against shell companies

Know Your Business – What Does it Mean & How can it Protect Your Company?

Businesses that offer their services to other businesses, instead of individual consumers, have to be more vigilant in their customer onboarding processes. According to a survey, B2B merchants say 19% of all online purchase inquiries are attempts at online fraud. So, it has become important, in the current regulatory landscape, to secure your own interest before engaging with another business. According to the Australia Competition and Consumer Commission’s Targeting Scams reports that $91.4 million was lost to B2B invoice fraud in Australia last year. 

For this, Know Your Business practices come in handy as they help a company to verify the corporate information of their potential clients and personal information of the higher management handling the operations of that client company. Business verification for KYC or Customer Due diligence is essential to identify the ultimate beneficial ownership (UBO) structure.

What does Know Your Business Mean?

A typical Know Your Business practice enables corporate organizations to determine whether they are dealing with authentic business entities or shell companies that are just present on the paper. AML Checks for business and proper document verification is demanded by regulators, especially in developed countries when dealing with foreign entities. Guidelines such as Electronic Identity Verification (eIDV) and 4th AML directive from the European Union are some of the examples that dictate Know Your Business (KYB) laws to corporate entities.

On the other side of the pond, in the US, Customer Due Diligence measures are being dictated to be the norm to determine the true ownership of a business entity. Several KYC service providers offer different business verification services in order to collect business verification data. Some Identity verification services such as Shufti Pro can perform business verification in seconds with the help of its document verification services, identity verification of the top management through official identity documents and Anti Money Laundering Checks.

Similar to Know Your Customer (KYC), KYB service providers verify businesses by obtaining official commercial register data using APIs. By employing the registration number and jurisdiction code of a business, an efficient digital KYB service can collect confirmable information for the business.

From KYC to KYB

The Bank Secrecy Act (BSA), introduced in 1970, is the United States’ most important anti-money laundering regulation. Banks and other financial institutions must meet the compliance obligations it involves.  BSA gave birth to KYC and AML solutions to make sure that businesses verify the identities of their customers and have valid money laundering checks. From verifying customers, the need to verify businesses emerged. The fifth AMLD  has centralized the data of beneficiary owner data. This centralization brought ease to the table for KYC and KYB.  Businesses must know the other business they are dealing with. According to Repair Driver News, $6.7 million worth of business loans were allegedly obtained fraudulently by a California auto body shop owner. In another survey, Payment fraud represents 60% of B2B fraud losses in the last five years. The reason why it is very crucial in this era to know the company you are concluding business with is because if it is blacklisted, it can cause trouble for your business as well. So the company verification process is vital to know the business one is dealing with.  

How KYB protect Your Business Interests?

Based on Artificial Intelligence, Shufti Pro can determine not only the true identity of a verifying individual but can also check for the financial risk attached to that person with AML Compliance solutions. With Anti Money Laundering services from Shufti Pro, you can check the involvement or presence of any top official of your partnering company in any watchlist or financial risk database. Shufti Pro banks on its huge databank to perform Customer Due Diligence on behalf of its customers. Shufti Pro can perform AML Background checks in real-time from 1000+ Watchlists and 3000+ databases.

Know Your Customer services might be the main objective of any identity verification service such as Shufti Pro, but the same set of services can be used to check the authenticity of any corporate entity. These KYB services are greatly helpful for financial institutions handling funds of large customer base and corporate entities. Banks, brokerage firms and dealers of several investment institutions have to be especially vigilant against every business entity that wants to partner with them.

Automated ID verification for identifying B2B frauds 

Performing Know Your Business procedures can be hectic and might require specialized manual resources, but automated business verification solutions can come in handy. Automating verification processes is a powerful step towards fighting B2B frauds. On one hand, conducting business online brings in a greater volume of online scams but on the other hand, automating business verification practices provides robust solutions that can prevent possible fraud attempts worth millions of dollars. They are not only the perfect form of Regtech but they enable businesses to be secure from multi-million dollar fines that a regulator will easily slap on such institutions if found in breach of their regulations.

Read: The Urgency for Know Your Customer’s Customer (KYCC) in Businesses

Business Verification Service – Is it Worth Your Time?

Most of the banks have already tasted the slow agonizing pain of KYC verification for their customer onboarding, transaction authentication, and remote banking services. This is the reason why most of the large financial institutions that are in dire need of Know Your Business services or who want to determine the ultimate beneficial ownership (UBO) structure of the corporations they are dealing with, find it hard to trust a KYC service provider. But with Shufti Pro and its Artificial Intelligence (AI) based identity verification services, it becomes easier to perform business verifications in seconds. With Optical Character Recognition (OCR) and Global Business Verification, Shufti Pro becomes an ultimate resource for businesses for real-time identification and verification. Shufti Pro is available in 230 countries of the world with support available for 150 official languages. It has the ability to determine the true identity of a person with the help of authentic identity documents that include ID Cards, passports, and driving licenses.

With machine learning algorithms any attempt of forging identity documents or even ownership structure can easily be detected by Shufti Pro. Fake credentials or personal information provided about the top management, a common practice in the case of Shell companies with complex management structures, can also be easily traced by Shufti Pro. Nationality verification and Geolocation services of Shufti Pro enables companies to determine the true country of origin for international clients and whether a certain company has been incorporated at a certain tax haven or not.

So in order to collect reliable business verification data and perform impeccable business verification, try KYC and AML Compliance solutions from ShuftiPro. You can even sign up for 15 days of free trial at first in order to check the service standards by this global identity verification service

Find more relevant resources:

Know your Business

Business verification

Business Verification: A new line of Defense against Fraudsters

Business Verification: A new line of Defense against Fraudsters

With the ever-increasing complexities of anti-money laundering (AML) and counter-terrorism financing (CFT) regulations and the increasingly global nature of the financial sector, banks and other financial sectors are spending a notable budget, time and effort to comply with AML and CFT regulations.

By the time the financial institutions and regulators catch up with the latest criminal tactics using advance technologies and airtight regulations – the criminals are already implementing more advanced methods to carry out financial crimes. Because of the obligation to constantly upgrading against fraudsters, it is always an ongoing challenge for the financial institutes to stay a step ahead of criminals and regulatory authorities. But how do they manage to do that? Attaining a commendable knowledge of Know Your Business (KYB), Know Your Customers (KYC) and AML regulations is a good point to start. 

While KYC is not new, businesses know all about KYC and are constantly adopting new technologies to make the KYC process smooth and accurate, KYB, on the other hand, is a comparatively new phenomenon and demands financial institutes to put some extra effort. 

A report published by OWI labs intimates that KYB verification, a $5.6 billion market in 2017 is expected to grow to $11.8 billion in 2022. Meanwhile, after the Panama leaks scandals, the regulatory demand for global business verification heats up in the US, Europe, Japan, Australia, Singapore, and many jurisdictions. 

These stringent regulations have made customer onboarding a complicated process. While these requirements can look complex and demanding to the financial sector but implementing them is certainly useful for financial sectors to defend against fraudsters. The tactics and techniques of financial criminals are evolving. It is not sufficient to keep pace with regulatory requirements only, the financial sector needs to stay on top of the game.

What is KYB and Why is it considered a shield against Financial Criminals?

Although, it is impossible to eradicate fraud once and for all. Same as a weed that grows wild and couldn’t be erupted for good, financial criminals continuously keep finding the vulnerability in the system. Equipped with AI and Machine learning, FinTech is assisting the financial sector in this fight against financial criminals. Owing to changes in the regulatory requirements for verification of business, business verification services featuring Artifical Intelligence are proposed by the FinTech industry.  

Main Drivers of Business Verification Services

Artificial Intelligence

The main drivers of global business verification services are the increase in focus on thorough due diligence of the businesses and beneficial owners from regulators in Europe and the United States. Moreover, compliance cost for the due diligence is very high and verifying businesses manually is not a time taking process. 

AI-based global business verification technology can reduce compliance costs for the financial institutions while maintaining quality standards and enhancing the customer experience. Another feature that makes automated business verification services distinct and reliable is the global verification facility. While manual verification takes the time it is also limited to the jurisdictions. For instance, the 6th AML directive by the EU requires countries to maintain a central registry for the listed business entities.

Future of Know Your Business Verification

As discussed previously, criminals always come up with new tools and techniques. Although AI-based Identity verification services are assisting in the elimination of financial crimes but will it remain strong enough in the future? This is the question yet to be answered but it is too early to make assumptions.

BlockChain Technology

On the other hand, technology is constantly making the process and there are more efficacious innovations in the backup. One such technology is Blockchain. With blockchain technology, financial institutions would be able to secure and exchange client information without maintaining a central register. This will help improve the KYC and KYB process and will further reduce compliance costs. 

The current technology is a bit exposed to data breaches and achieving compliance with GDPR is complex. Only a handful of KYB solutions providers are compliant with GDPR and other major data protection regulations. With the advancement in technology, the new methods are expected to enhance the financial security and risk management.  

The technological revolutions are making positive improvements and are adopted to fulfill the requirements of financial institutions and in this era of digital competition and complex compliance requirements, businesses need to adopt a robust business verification service. By automating the business verification process, the financial institutes can easily verify the business entities when onboarding. In addition to this, compliance with complex regulations will become easier.         

Business Verification

Business Verification – Foolproof Ways to Secure Happy Customers

Creating a winning customer experience can make for a significant competitive advantage for businesses. On the other hand, providing an inferior one can tarnish chances for your company for good. According to a study by Gartner, 81% of businesses expect to create a competitive advantage based on customer experience. Increasingly advancing technology requires companies to come up with solutions that can make CX more wholesome and satisfying. From providing fast customer service to automating business verification procedures, there are numerous ways a company can provide an exceptional customer experience. Although improving CX may seem an obvious point of scoring, a lot of businesses still fumble around getting it right. Nonetheless, figuring out ways to enhance experience can be challenging and implementing them even more so.

CX matters for a number of reasons, the foremost of which is the fact that it can be solely responsible for driving up revenues for a company. 60% of consumers are willing to pay more for better customer experience. This alone should be enough for companies to take steps to provide a better overall experience to customers. Some of the best ways for businesses to improve customer experience are;

1. Take Time to Understand Your Audience

Understanding your audience is the first step towards providing the best product or service in the market. Take time to understand your customer – their perceptions, motivations, preferences and concerns. It can give you an in-depth idea about what your customer wants and help you to create a product centred around their needs. This can be done by interviewing sales and customer service teams and inquire about what concerns customers the most about their services. Market surveys and focus group studies can be a lot of help as well.

2. Develop Customer Experience by Working Backwards

The founder of Apple, Steve Jobs upheld the fact that companies should focus on working backwards from customer experience to the development of technology. The first step in initiating this is to list down every stage of the CX and where the customer is most likely to be impressed. Each of these should be worked on individually to create a better CX, as well as pushing the company’s USPs in the process. The next focus should be for businesses to resolve genuine issues faced by customers in using their products or service. Companies must continue to tweak their service offerings in order to increase satisfaction.

3. Increase Personalisation for Customers

In the day and age of online businesses, the importance of personalisation has increased tenfolds. Customers now expect their services to be customised. Companies that make an effort to provide customised products and services are more likely to develop a better overall CX. Increased personalisation gives a sense of ownership to customers about their services and gives them a feeling of being valued by the company.

4. Implementing Automated Business Verification

Companies, particularly online businesses, frequently become victims of internet frauds including identity theft and credit card fraud. This causes businesses to face chargebacks and fines, resulting in losing revenues. Not to mention, the reputational damage caused by not implementing with proper customer verification procedures. However, with a business verification service like Shufti Pro, businesses can automate their KYC (Know Your Customer) verification procedures. Implementing digital ID verification can not only ensure a smoother onboarding or transaction process for customers but can also improve the accuracy of the process. Businesses can choose to either verify their customers through identity verification or phone verification, depending on their requirements. Through an automated system for fraud protection, companies are able to provide a seamless CX for customers. Instant identity verification also reduces hassles for customers to avoid long authentication processes.

5. Appreciate Your Customers

While a lot of companies have ways to identify repeat customers, not all of them make use of such information to enhance their CX. Simple appreciation e-mails or personal messages often suffice in such cases. Simple thank you e-mails for returning again to the store can go a long way to make customers feel special. For a business looking to go the extra mile, sending discount offers, coupons and vouchers can be a great marketing tool for enhancing the client experience. More loyal customers should be made part of special programs that allow them to access amenities and discounts that other customers don’t get.

6. Provide Seamless Customer Support Services

Customer services is an integral part of exceptional customer experience. Developing customer service teams is no longer enough. Using tools that can help enhance support services is equally important. Customer support services are now available that can help sales and support teams manage leads and respond to them effectively. Automated chat tools allow companies to provide round the clock customer service and enable them to save costs for hiring elaborate Business Verification. AI-enabled chatbots also collect data from customer interactions to analyse it to provide better insight into what problems are commonly faced by them and what improvements can be made in services or product design.

7. Respond to Customer Needs and Feedback

Customers can be very expressive about their needs, however, it takes an attentive business to listen and fulfil those needs. According to studies, nearly 80% of companies think they are being attentive to customer needs, while only 8% of their customers agreed with them. It is, therefore, important to receive feedback from customers through different channels including social media, feedback surveys and chat support. People are particularly active on social media these days. It is important for businesses to check what their customers think of them and their service, and look for holes where it can be improved.

8. Build a Meaningful Brand Personality

Every marketing manager is aware of the importance of building a brand. Positioning a brand and building a personality around it the way you want can be one of the most challenging tasks in marketing. While there may be a lot of other equally decent smartphones, there is a reason why brands like Apple and Samsung have a good enough consumer perception to generate massive revenues. Both Coca Cola and Pepsi have a loyal customer base, despite offering potentially the same product. It is because they provide a memorable experience and have made the effort to build a lasting impression of their brand. Whether they know it or not, people want to be linked to a brand they can relate to or remember.

 

9. Leverage Technology to Improve Customer Experience

Modern technology tools have been instrumental in helping companies build exceptional CX. AI and machine learning tools have enabled businesses to interact with customers 24/7, implement more robust fraud protection, increase engagement with customers across different channels. With the market flush with millennial users and people becoming increasingly used to mobile devices and tech-based tools, improving CX by leveraging AI and other modern tech tools, seems only sensible. Customers now expect their services to be fast and their experience to be effortless. Building advanced tech interfaces can only help businesses in providing that experience to customers with Business Verification.

How does Shufti Pro Help You Enhance Customer Experience

Ever gone through long and arduous onboarding procedures in banks? Or has your business faced chargebacks and fines as well as reputational loss due to insufficient fraud prevention measures? Or worse, faced legal ramifications for not properly verifying the age of your customer online. All this can be extremely detrimental for a company’s customer experience. Shufti Pro is an all in one tool that can help you verify your business as well as provide a fast onboarding process for your clients. It can also provide age checks and address verification services for online businesses.

hufti Pro provides business verification services through an AI-powered tool that has been monumental for many businesses in improving their CX. You can now secure your business by providing instant identity verification services to verify users. Businesses can now provide seamless onboarding procedures by performing automated KYC verifications and AML screenings.

Shufti Pro will also help you keep out fraudsters by verifying customers in real time through ID verification and facial recognition checks. Online businesses can also verify billing and shipping addresses through its address verification feature. With its universal language support, Shufti Pro is able to provide global business verification services. It is the perfect tool for businesses to reduce hassle for customers and provide valuable customer experience.

Recommended For You:

The Urgency for Know Your Customer’s Customer (KYCC) in Businesses