9 Reasons Why Your Business Needs to Automate its KYB (Know Your Business) Process to Grow

KYB (Know Your Business) is a fundamental process for any company wishing to establish solid business relationships and comply with global regulations, such as those related to anti-money laundering (AML) and counter-terrorism financing (CTF).

This process involves verifying the identity and legitimacy of other businesses you wish to conduct business with. In an increasingly complex and regulated business world, KYB has become essential to ensuring security, transparency, and trust in business relationships.

KYB involves a series of steps, from verifying the company’s authenticity to identifying Ultimate Beneficial Ownership (UBO) and continuously monitoring business activities. However, the manual KYB process can be slow, error-prone, and costly regarding human and financial resources.

This article explains the 9 key reasons why your business should seriously consider automating the KYB process. From complying with international regulations to improving user experience, KYB automation can be a catalyst for your company’s growth and success. So, here we go!

1) Time-saving for sales, operations, fraud, and legal teams

Manual KYB processes can be time-consuming and labor-intensive, requiring extensive documentation, manual data entry, and repetitive tasks from all teams, including sales, operations, fraud, and legal.

By automating these processes, companies can save valuable time and allocate resources to more strategic activities. Automated KYB solutions can quickly extract data from various sources, verify information, and generate comprehensive reports with minimal human intervention.

KYB process automation plays a vital role in achieving standards that help reduce operational costs. For this reason, by implementing these solutions, you can benefit from significant time savings.

2) Onboarding only legitimate companies and reducing fraud

Companies that invest in KYB processes before onboarding other companies can be confident that they are doing business only with legitimate and reliable entities.

It is essential for your business to ensure that the companies you wish to collaborate with are trustworthy and genuine. And yes, this is also achieved through KYB verification processes.

Since KYB verification is an ongoing process, companies can be assured that they are engaging in commercial transactions with legitimate companies at all times.

KYB processes enable companies to avoid so-called “ghost companies” or “shell companies,” which only exist on paper for the purpose of defrauding other businesses.

Politically Exposed Persons (PEP), blacklisted individuals, and criminals often hide behind these fictitious companies. Without KYB processes, it would be difficult to identify these suspicious characters and protect against potential risks and commercial fraud. Onboarding legitimate companies through KYB ensures integrity and security in business relationships, which is essential for sustainable business growth.

3) Secure Business Relationships between Companies

KYB processes make doing business with other companies safe and reliable. KYB builds trust in business owners by ensuring they are not engaging with illegal enterprises. And mind you, it’s different from what we mentioned before.

KYB checks all Ultimate Beneficial Owners (UBOs) and shareholders of a company to unveil the quality of individuals behind the business.

These additional steps taken by companies allow them to build secure business-to-business (B2B) relationships. Companies that know their UBOs have an edge over those that do not.

Since all a company’s ultimate beneficiaries are verified, KYB ensures that companies are not involved in money laundering or other financial crimes.

Always remember: business partnerships rely on mutual understanding and shared interests. There is a constant need to verify trust between both entities to build secure and stable relationships. And KYB is the only tool you have to check.

4) Compliance with International Regulations such as AML and CTF

Compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations is essential for companies wishing to establish credible and transparent business relationships. 

These regulations, applicable to all companies engaging in monetary transactions or payment services, require companies to adhere to strict due diligence standards.

Companies with an automated KYB process open up to business opportunities with other companies they can trust.

According to Globalscape, companies can lose up to $4 million due to a lack of investment in KYB compliance practices.

Additionally, the KYB compliance report reveals that companies globally spend over $5.5 million as a result of fines imposed by regulatory authorities due to non-compliance with AML regulations.

And don’t forget about the huge AML Fines we have already talked about…

The KYB process also helps companies identify and avoid collaboration with fictitious or “shell companies,” significantly reducing the risk of engaging in suspicious transactions.

The regulatory compliance landscape is a constantly evolving terrain worldwide. For this reason, it is important to have an automated KYB process with companies like Silt.

5) Improves the End Customer Experience

Offering a seamless and, above all, efficient onboarding experience is crucial in today’s competitive business landscape. Automation of the KYB process plays a fundamental role in this improvement by speeding up customer onboarding and significantly reducing the time from initial contact to revenue generation.

This simplification of the onboarding process not only benefits the company but also has a direct impact on customer satisfaction. As previously mentioned, customers value a frictionless experience where they can complete registration processes quickly and securely. Our service, for example, contributes to building trust, as end customers perceive that they are dealing with a company that prioritizes efficiency and security.

Furthermore, seamless integration with other platforms and business systems ensures a smooth and consistent experience. End customers do not experience obstacles or interruptions in their interaction with the company, improving their perception and increasing the likelihood of maintaining long-term business relationships, as explained in our article.

6) Improves Data Quality and Reduces Human Errors

One of the most prominent advantages of this automation is its ability to improve the quality of business data. Human errors in data entry are a common concern in manual processes, which can lead to inaccurate or outdated information.

KYB automation uses advanced algorithms and data validation techniques to ensure the accuracy and integrity of information. Automated systems can extract data from various sources, verify information in real time, and generate comprehensive reports without human intervention, minimizing the likelihood of errors.

Additionally, the ability to automate the continuous updating of data ensures that business information is always up-to-date and compliant with changing regulations and legal requirements. This is especially crucial in a constantly evolving business environment, where data accuracy is essential for informed decision-making and regulatory compliance.

7) Greater Data Security and Privacy

KYB process automation also significantly contributes to strengthening the security and privacy of business data. Proper management of confidential information is essential in an increasingly cybersecurity and data protection-focused business world.

Automated KYB systems implement robust security measures to protect sensitive information. This includes data encryption, user authentication through biometrics, and role-based access, reducing the risk of data leakage or theft.

Furthermore, automation allows for constant monitoring and detailed auditing of data-related activities, facilitating early detection of potential security breaches.

8) Increased Return on Investment (ROI)

Implementing an automated KYB process upfront may entail additional costs for companies just starting and seeking growth. It’s true: investing in automation technology for KYB processes may require an initial fee.

However, the long-term benefits outweigh the investment. As mentioned earlier, automated KYB systems reduce the need for manual labor, eliminate costs associated with human errors, and optimize resource allocation. 

Time and cost savings achieved through automation contribute to a significant return on investment. Additionally, companies can redirect their human resources toward higher-value tasks, boosting productivity and innovation.

And then there’s an important point, perhaps even MORE important: KYB is effective in achieving a secure conversion rate in business-to-business relationships. Companies that comply with KYB generate more credibility and trust, leading to a higher B2B conversion rate.

9) Business Reputation Improvement with a New Strategy

Implementing a KYB process is not just another service for your clients; it’s also a smart strategy for a business that can create positive impressions on potential business partners.

Compliance with all regulations certifies a company as authentic to do business. This demonstrates a commitment to ethical business practices and provides the company with a competitive edge in an increasingly demanding market.

Having a solid KYB verification can make all the difference. Potential business partners value transparency and due diligence in background checks.

Join the KYB Revolution with Silt

Silt leads the way when it comes to secure and frictionless KYB solutions. Our KYB process has been designed to provide seamless business and self-employed verifications and maximum data security and privacy.
Don’t compromise on your business’s quality or security. Choose Silt, try our free demo, and join the revolution transforming how businesses do business.