What Exactly Is KYB (Know Your Business)?
KYB (know your business) is a process that is quite similar to KYC (know your customer), which is far better known among people. The real difference between the two is the fact that KYB is focused on identifying suppliers and companies. KYC is all about customers and consumers.
Understanding Know Your Business
You can easily learn more about KYB on the internet, on websites like https://sumsub.com/kyb-solution/. However, the basics are the same as KYC. The big difference stands in the user that is identified. With KYC, we look at users or clients that register with a company. With know your business, you need to identify the person that is a legal business representative.
Most B2B companies have to carry out true due diligence in order to identify what business they work with. This is done with the purpose of fighting tax crimes and money laundering. Also, B2B firms need to make sure that they securely work with other companies.
We should also highlight the fact that in some industries, like the financial industry, using KYB procedures is mandatory and there are laws for it. As an example, the companies that offer professional services or that deal with freelancers or SMEs have to establish strict KYB procedures in order to identify all legal compliance requirements.
Similarly with the KYC process, KYB digital solutions will help eliminate business bureaucracy, develop control methods, and reduce business costs. On the whole, these are mandatory implementations that even small businesses have to make to stay safe in the B2B world.
Business Know Your Customer
Business know your customer (BKYC) is quite recent in the financial world. There is a huge demand for such solutions because all around the world there are countless regulations that led to a forced implementation.
Digitalization highly affected the world, together with delocalization. Companies that offer B2B services have to establish proper KYB procedures. They have to reduce processing times, costs, administrative procedures, and make complex processes much simpler. As a result, relations with B2B clients are automatically improved. Internal compliance policies are developed.
Do You Need KYB?
Fortunately for some small businesses, know your business is not required by law. However, whenever you deal with other businesses, it is very important that you know exactly who you talk to. This will make it safer to operate.
If you operate in the financial sector or in other industries that require the implementation of KYB, you do not really have a choice. However, even if your small business is active in other industries, it might still benefit from such procedures.
On the whole, know your business is something that you absolutely need to at least consider. You can choose out of different service providers on the market. Just make sure you work with someone that is as experienced as possible. You do not want to end up with problems because of making an incorrect choice. Read reviews and talk with other businesses that have been implementing KYB in the past. This will give you all the information you need to make smart choices.