In the digital world, manual business verification is not enough, but automated solutions are a requirement. Electronic know your businessEKYBis a speedy and secure way of investigating the legal status of companies. The best thing about electronic verification is that it requires less human effort and is a less time-consuming method. It verifies business identity by analyzing its data and documents against registered information. Screening business information against large databases is more accurate and faster. Digital software that has integrated artificial intelligence AI and machine learning ML is increasing the importance ofÂ
Electronic KYBverification. Â
What is EKYB?
EKYBrefers to the electronicKnow Your Businessprocess through the complete investigation of the company’s details. The data and documents are uploaded to verify the business’s legal status instead of manual checking. The set of laws and regulations are incorporated in theEKYB solutions, so it inspects companies that comply with such regulations. For example, it applies anti-money laundering AML checks over third parties to ensure secure financing. This helps to detect money laundering, fraudsters, and companies that are involved in financial crimes. Â
E-KYB ProcessÂ
Business verification is the process of assessing whether companies are legal to onboard. The primary goal of kyb is third-party due diligence to ensure healthy financial relations. This investigation process is based on the following steps:Â
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Data Collection
The first and foremost step inKYB Verificationis collecting the company’s information, which includes the following data:Â
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- Name
- Registration number
- Business country residence
- Website
- Register location
- Postal address
- Shareholders
- Ultimate beneficial owners
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Understanding Ownership Structure
The ownership structure of the company involves the beneficiaries, directors, and shareholders. The ultimate beneficial owner UBO of the company is an entity that holds at least 10 to 25% of the company’s shares. When the company hides UBO details, suspicion arises that the company may be involved in illegal funding. Shell companies hide UBO information to evade taxes, but corrupt businessmen exploit it. Criminals, politically exposed persons, PEPs, and sanctions people are hiding their identities behind shell companies. The verification process asks for the UBO details, including his name, physical address, contact number, photocopies of his driving license, and passport ID. All the gathered details of UBO are screened against the official databases to verify its identity and legal status.Â
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Documents Collection
The required documents for the business verification include articles of incorporation and association, a certificate of incorporation, a copy of the director registry, a copy of the shareholder registry, a copy of the state business registry, and a memorandum. All the gathered documents are uploaded online for verification purposes. Furthermore, advanced technological solutions are used in electronic business verification to obtain quick results. For example, optical character recognition (OCR) is used to extract text.
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Biometric or Multi-Factor Authentication
EKYBprocesses may include a biometric or multi-factor authentication process to verify the business identity for security purposes.
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Real-time Monitoring
Business verification is not a one-time task that occurs while onboarding companies. TheEKYBinvolves real-time monitoring to detect daily transactions. If any illegal activity occurs, the partner companies take timely reports about them.Â
Importance of the E-KYB process
For businesses, ekyb is the process that provides the guarantee of long-term stable financing and cooperation with counterparties. The e-KYB process particularly underscores the need to reduce the influence of human error since the KYP process is more or less automated. Corporations guarantee consistent and correct work when using automated algorithms performing functions on data through increased and ultimate reliability. The screening process is done by comparing calculated data with the original data source instead of using entered data, which could contain a significant number of mistakes and oversights.
Some of the ways that make work easier, less bulky, and time-consuming include not having to scan papers and documents for submission, downloading printed paper forms and documents, and physically moving to a different department/ section.
Conduct e-KYB Process
Business entities enjoy easy-to-implement quick service and easy account opening as it is easier and quicker to authenticate electronic information. Critical considerations for the existing manual systems that companies interested in the application of e-KYB are suitable for their operations.EKYBassists in selecting the proper solution that is most relevant to digital KYB requirements. This is where the businesses adoptedEKYB, and the idea, which was popular before several people checked data, disappeared. This means that, in general, businesses enjoy a higher degree of privacy as they purchase for their needs.
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