Know your business (KYB)
Know Your Business (KYB), sometimes called corporate KYC, is the process of verifying that another business is legitimate and safe to do business with. This usually involves verifying key details about the business and identifying the Ultimate Beneficial Owners (UBOs), or the key people behind the business, to understand who benefits from the business’s financial transactions — along with continuous AML monitoring throughout the business relationship.
Frequently asked questions
What is a KYB check?
A KYB check is the process of verifying a business before working with them. This often involves verifying information such as the business’s physical address, phone number, source of funds, and business registration or license, and may also include an analysis of business risk based on location. For example, the Financial Action Task Force (FATF) regularly releases guidance on international territories under increased monitoring for potential money laundering and terrorist efforts.
KYB also involves identifying and verifying that the business’s Ultimate Beneficial Owners (UBOs) are real and aren’t involved in criminal activity.
What is KYB compliance?
KYB compliance means a company is following Know Your Business rules. This involves performing suitable due diligence on businesses and their Ultimate Beneficial Owners before working with them — and continuously performing AML checks throughout the business relationship. While businesses can’t detect all potentially fraudulent transactions, compliance with FINRA and other regulations requires implementing reliable and repeatable processes to ensure companies understand who they’re dealing with before allowing or rejecting transaction requests.
What is the difference between KYB and KYC?
While Know Your Customer (KYC) refers to verifying customer identities before carrying out transactions, Know Your Business (KYB) frameworks require companies to verify the businesses they work with — and the people behind those businesses — to assess the AML/CFT risk.