A question you will come across is What is KYB?
My name is Faisal Khan and I’m a banking and payment consultant and today I’m going to answer that question.
KYC is very much like KYC which is Know Your Customer except the “B” here stands for Business. Know Your Business. When you’re doing B2B payments, business to business payments or you know B2C payments business to consumer payments or B2B2C payments etc. Whenever there is a B that is involved a business.
- How do you identify the business?
- Where is it registered?
- Who are the shareholders?
- Who are the ultimate beneficial shareholders?
- Is there a memorandum of articles of association?
- Is there a company registrar where this company has been registered?
- Is there a tax number?
- Do they have a bank account?
- Is there any other sort of documentation that I can find or if someone else can find to identify the business?
- Do they have a work permit?
- Do they have a license registration for the city that they’re in?
- Are there in some registry in the local municipality or in the city that one can check?
Doing due diligence on a business is slightly difficult but much more organized than let’s say doing due diligence on let’s say a person, an individual. KYB is Know Your Business. And the goal is to identify who the real owners of the business are. Who the shareholders are. Are there any restricted list. Is the company blacklisted etc. Is the company a shell company is it an offshore company. What sort of layers of anonymity have the added or what what is it that they are masking all that needs to be unmasked and unpeeled for purposes of KYB.
So for a financial institution or a non-banking financial institution who are dealing with business customers it is absolutely imperative to know – KYB – Know Your Business.
I hope I was able to answer that question for any more. Feel free to ask in the comments section below. Until next time, have a good one.
When dealing with “businesses” as your customers, it is important that you have a compliance program that can correctly identify them. The process and the industry term is KYB – Know Your Business. Here is a quick video that explains what KYB does.
If you have a question on how to start a money transfer company, ask away in the comments. I will be happy to answer.
This page was last updated on September 1, 2022.