Know Your Business (KYB)
What Is Know Your Business (KYB)?
How Does Know Your Business (KYB) Work?
- Collect business information. The organization gathers the company’s legal name, registration number, incorporation details, registered address, business activities, and other required information.
- Verify the entity. Corporate registries, formation documents, licences, tax records, and other reliable sources are used to establish that the business exists and that its information is accurate.
- Identify ownership and control. The organization examines the ownership structure and identifies beneficial owners, directors, authorized representatives, and other relevant controlling parties. Their identities are verified where required.
- Screen and assess risk. The business and relevant individuals may be screened against sanctions, PEP, watchlist, and adverse-media sources. Risk is assessed using factors such as industry, geography, ownership structure, products, and expected activity.
- Monitor and update records. Business, ownership, screening, and risk information is retained and reviewed throughout the relationship. Changes in ownership, management, activities, or risk indicators may trigger renewed KYB checks or enhanced due diligence.
Who Uses Know Your Business (KYB)?
How Can Regula Help with Know Your Business (KYB)?
FAQ
Is Know Your Business the same as Know Your Customer?
Not exactly. KYC is a broad term for identifying and assessing customers, which may include both individuals and legal entities. KYB refers specifically to the business-focused process of verifying an entity, examining its ownership and control structure, and checking the individuals authorized to represent it. When onboarding a company, organizations often combine business verification with identity checks on beneficial owners, directors, or authorized representatives.
Why do beneficial owners appear in Know Your Business?
A beneficial owner is a person who ultimately owns or controls a business, directly or through one or more legal entities. Identifying beneficial owners helps organizations understand who stands behind the company and may benefit from or influence its activities. Complex or multilayered ownership structures can obscure that control if verification stops at the registered entity. KYB therefore combines company information with identification and, where required, verification of beneficial owners and other controlling persons.
What triggers a Know Your Business refresh after onboarding?
A KYB review may be triggered by changes in ownership, control, directors, authorized representatives, business activities, or registered information. Expansion into higher-risk products or jurisdictions, new sanctions or adverse-media findings, and activity inconsistent with the expected business profile may also require updated checks. Event-driven reviews typically complement periodic reviews scheduled according to the company’s risk level. Well-maintained records make it easier to identify changes and complete reverification.
Can Know Your Business rely only on a company registration extract?
Not always. A registry extract can confirm core company information, but organizations may also need formation documents, relevant licences, ownership records, and verification of beneficial owners or authorized representatives. The required evidence depends on applicable law, internal policy, and the entity’s risk level. Higher-risk or complex businesses generally require additional evidence from reliable and independent sources.
How should organizations measure Know Your Business control quality?
Organizations can assess KYB controls using both efficiency and quality metrics, including completion time, manual-review rates, data accuracy, unresolved exceptions, and the frequency of missing or outdated ownership information. They should also examine screening of false-positive rates, reverification outcomes, audit findings, and cases in which later investigations reveal gaps in the original business file. Strong initial KYB records help investigators interpret monitoring alerts without repeating basic identification work. Metrics should be reviewed together, since faster completion does not necessarily indicate better verification.
