Customer verification and Know Your Business are both equally important for parent companies to expand their operations. To do so, giant companies partner with small businesses and build a long-term relationship of simultaneous progress and revenue generation. However, not all the available firms in the market are likely to provide benefits, some are established and run by fraudsters to simply reap illegitimate interests. Money laundering, financial improvements, terrorist financing, and status uplift are to name a few.
Therefore, businesses need authentic and automated Know Your Business checks to minimize the eros traditional methods may cause. Identifying and verifying businesses will not only provide insights into the legitimacy of the partnering firm but will also help parent companies to detect and deter fraudulent risks. Over the years, criminals are using virtual identity theft to dodge the parent companies’ authenticity. However, now the case is not the same as digital KYB solutions are taking over and allowing businesses to restrict criminal entities and fraudulent firms.
Technological Shift in Know Your Businesses Checks – Outdating the Traditional Methods
There are several components that have fueled the transformation of company verification methods. Previously, parent businesses hire trained and experienced verifiers who take days to verify firms. Also, this traditional method is prone to various threats including incorrect data entry, data breaches, inaccuracy, and human errors. This created various loopholes for the criminal to sweep right in. Therefore, businesses require automated, less time-consuming, and robust solutions to verify companies in minimal time.
The process involves the following steps:
- The business owner is asked to fill in the details in the form presented by the system on screen.
- Later on, the registering firm is asked to upload business documents for validation. The documents here serve as the supporting evidence for previously provided information.
- OCR technology extracts the required information and cross-matches it against the global registers, trademarks, and databases.
- The system validates the documents and identifies tampering if any.
- Lastly, the system fetches results and presents them in front of the end-user while verifying the firm and store in the back office by using an API call.
Benefits of Automated Business Verification Services – Helping Parent Companies in Numerous Ways
Various companies are expanding their operations to partner with global firms but they can not leave KYB checks behind. Otherwise, they will expose to various criminal intentions including money laundering, illegitimate revenue generations, failure in compliance, and ultimately compromising the whole of the worth. This is why, as per Shufti Pro News, there is an increase in the need for authentic and automated solutions. The AI and ML-powered services provide the following:
Prevention of Terrorism Financing, Money Laundering, and Other Financial Threats
Where digital transformations have shifted the businesses’ operations to another level, they have simultaneously brought about various disruptions. The number of new business registrations has doubled over the years. This is why parent companies can not identify whether the partnering firms will bring potential benefits or simply expose them to new threats.
Criminal and fraudulent companies use legitimate businesses to carry out money laundering, finance terrorism, or reap monetary benefits. Therefore, companies need to ensure that why are partnering with the beneficial firms. This way they will not only generate high revenue but also produce simultaneous growth.
Ensure Regulatory KYB Compliance and Minimizes Hefty Fines
Along with verifying businesses, parent companies are also obliged to adhere to the set standards by authorities. As per these, companies should verify business owners, stakeholders, and affiliated firms, keep track of transactions, and monitor activities. Hence, businesses should employ automated solutions to record the activities of associated firms and detect suspiciousness in time.
Moreover, if the businesses fail to verify businesses and lack AML/KYC compliance they are more likely to experience unforeseen consequences. These so in all the regulatory, in-house, and marketplace worth context. Ultimately, this will lead to hefty fines and worst of all, a complete shutdown.
Detection and Deterration of Criminal Threats
KYB checks allow businesses to verify companies in real and minimal time by validating their existence and documents so far provided. Criminals of today recreate and rename the pre-existing company that was long abandoned. This way they can escape the verification and manipulate legitimate companies. This will not only cause money laundering but also put a question mark on the parent company’s reputation.
Therefore, businesses should identify red flags before the time has passed. Here, the automated and robust Know Your Business services are companies’ reliable go-to solutions. As Shufti Pro Funding highlights, digitally verifying businesses is gaining immense popularity among global companies.
In the End
Businesses are wide-spreading their operations and partnering with various other firms to attain a huge customer base along with generating high revenues. However, the criminal threats have compelled businesses to undergo second thoughts. Here, the companies should incorporate authentic KYB checks and Know Your Businesses solutions to readily verify partnering firms.