‍

KYB: Deep Business Knowledge

‍

The KYB refers to the process of collecting, verifying and evaluating information about the companies with which a financial institution does business. This process is essential to better understand corporate customers and mitigate risks associated with business transactions, such as money laundering, fraud, and terrorist financing.

‍

Application of KYB in the Business World

‍

To better understand how KYB works, let's consider the following fictional but illustrative example:

‍

Imagine that a financial institution, Banco XYZ, is considering offering banking services to a new company, ABC Empresas SA. Before establishing a business relationship with ABC Empresas SA, Banco XYZ undertakes a KYB process to get to know its new customer better.

‍

• Information Collection: Banco XYZ asks ABC Empresas SA for a variety of documents and information, such as corporate records, statutes, financial statements, lists of shareholders and directors, among others.

‍

• Verification of Documents: Once the documentation has been received, Banco XYZ uses KYB verification tools and software to verify the authenticity of the documents provided by ABC Empresas SA. This includes comparing information with external databases and confirming the legal existence of the company.

‍

• Risk Assessment: Banco XYZ analyzes the information collected and evaluated to determine the potential risks associated with ABC Empresas SA. This may include reviewing the corporate structure, identifying potential conflicts of interest, and evaluating the reputation of the company and its shareholders.

‍

• Regulatory Compliance: XYZ Bank ensures that the KYB process is in line with internal compliance regulations and policies. This ensures that the institution complies with legal and ethical requirements when establishing business relationships with companies.

‍

Benefits of KYB in the Financial Sector

‍

The effective implementation of KYB in financial operations offers a number of benefits for both financial institutions and their corporate clients:

‍

• Risk Mitigation: The KYB helps financial institutions identify and mitigate risks associated with business transactions, thus protecting the integrity of the financial system.

‍

• Fraud and Money Laundering Prevention: By getting to know their corporate customers better, financial institutions can detect and prevent fraudulent and money laundering activities before they occur.

‍

• Improving Reputation: By demonstrating a commitment to due diligence and regulatory compliance, financial institutions can improve their reputations and strengthen the trust of customers and regulators.

‍

Conclusion

‍

In short, KYB is a fundamental component of the due diligence process in the financial sector, which involves detailed knowledge of the companies with which they do business. By conducting an effective KYB process, financial institutions can mitigate risks, prevent fraud and money laundering, and strengthen their reputation in the market.

With Complif, financial institutions can easily collect and verify business information using the File Manager, which centralizes data and guarantees the authenticity of documents. In addition, the module of Transactional Monitoring makes it possible to assess the risks associated with commercial transactions, while the Alert Manager helps prevent fraud and money laundering by early detection of suspicious activity.

‍