November 25, 2020
Why KYB Solutions Need to Adapt to Business Needs
The process of onboarding a new entity or entering into a new business relationship traditionally involves substantial manual techniques that include intensive paperwork—from filling forms and checking boxes to performing thorough background checks. Entering a business relationship requires the same prudence exercised by many businesses for their B2C KYC risk mitigation. The regulatory environment, which includes the Payment Services Directive (PSD2), 5th Anti-Money Laundering Directive (AML5), and General Data Protection Regulation (GDPR), has further mandated business onboarding requirements. Know Your Business (KYB) is a process for identifying companies and their Ultimate Beneficial Owners (UBOs), CEOs, directors, and compliance adherence.
The need for a KYB process is evident from the increasing online presence of organizations, especially those under scrutiny, e.g., financial service providers. The need to know the risk within the initial onboarding of a business can mean the difference between staying in a business and crashing out completely. With all these complexities and the need to fulfill compliance requirements, companies have adopted technology to get ahead of the curve and automate the due diligence underwriting process.
Several effective solutions on the market, which offer a better alternative to manual compliance and risk mitigation checks, possess the following characteristics:
The KYB solution offered by 4Stop addresses the needs of modern global businesses by making KYC and KYB processes more robust, agile, and consequential through technology. 4Stop provides companies with a turnkey solution to efficiently address onboarding risk analysis and regulatory compliance adherence in a fully automated manner. The company is significantly streamlining business underwriting and saving organizations a lot of time and unnecessary paperwork. Furthermore, its solution provides access to global best practices through shared experiences and networks rather than the unitary siloed approach to information management, which most organizations have used in the past.
Through one API integration, businesses have access to one of the world’s largest KYC/KYB data orchestration hubs where they can activate any data source in real time. All relevant data is on one centralized view for easy analysis and investigation of real-time verifications and reports. The KYB solution offered by 4Stop fully supports a wide range of compliance workflows per region and market with full customization on data due diligence to underwrite and onboard businesses quickly while maintaining business relationships with ease. Companies can select relevant parameters attuned to their specific requirements—from locating an entity in an advanced business search identifier to performing a comprehensive data analysis on businesses’ identity, share structure, operational performance, compliance adherence, online presence, and credit—while obtaining supporting registry documentation. Furthermore, a deep dive KYC verification of an identified UBO or director can be activated through a click. Risk analysis, profiling, and recommendations are conducted in real time, and all underwriting files are accessible on one modern, feature-rich case management platform.
For many entities, underwriting businesses can take as much as 26 days to process. Adopting data-driven due diligence methods allows entities to improve their onboarding time and acceptance rates. Partnering with an orchestration hub comes with many advantages and eliminates the need to integrate and manage multiple third-party data providers—it reduces data costs, manual processes, and resource requirements. The industry average is $165 per business onboard. 4Stop is an orchestration hub that allows entities to reduce this cost to as low as $10 per onboard through an enabled pre-screening process. Businesses are quickly evaluated with built-in cascading verification logic prior to granular due diligence to ensure the best data output, coverage, and performance.
Historically, technological advancement in the area of compliance has lagged. However, as we continue to see evolutions in regulatory obligations worldwide, many technology providers within the RegTech sector are striving to simplify and future proof processes. Partnering with orchestration hubs is proving to be the future in leading risk mitigation because of ever-expanding extensive data hubs and endless possibilities for verifications, rule configurations, and advanced analysis intelligence.
Enterprises can enhance their risk mitigation protocols to increase authorization rates and profitability and obtain future-proofed fraud prevention and compliance adherence with little to no impact on their businesses.
To learn more about the end-to-end automated KYB solution offered by 4Stop, please visit 4stop.com.