iDenfy, a Lithuania-based RegTech company, announced new automated features in its Know Your Business (KYB) platform, which will contribute to the company’s goal to help transform the Fintech industry by revolutionising the business verification process.
As financial crimes and regulatory pressures rise, iDenfy’s team focuses on changes in the traditional or manual KYB process, enabling companies to quickly and accurately verify business entities and minimise risks without sacrificing operational efficiency.
KYB verification process
The KYB verification process has become a vital security measure for companies across various industries
The Know Your Business (KYB) verification process has become a vital security measure for companies across various industries in the ever-evolving regulatory landscape.
High-risk industries, such as Fintech businesses, virtual asset service providers (VASPs), iGaming establishments, or forex platforms, require more stringent checks, often involving the verification of individual clients and other corporate entities, like potential partners or third-party service providers.
Advancements in AI
According to iDenfy, this is important because with advancements in AI, financial crimes such as money laundering, terrorist financing, and fraud are getting more sophisticated.
“Generative AI fraud, including the use of fake or forged documents, allows fraud to spread and become more mainstream. For those who handle large volumes of customers, ongoing monitoring is vital, but so is a robust onboarding process to actually find out your partner’s true ownership structure before entering into a business relationship with them,” commented Domantas Ciulde, the CEO of iDenfy.
AML regulations
Even non-regulated firms adopt stringent KYB processes to ensure they are working with entities
As a result, even non-regulated companies adopt stringent KYB processes to ensure they are working with legitimate entities. In general, the KYB process involves verifying the legal status of a business, identifying its ultimate beneficial owners (UBOs) who often use complex ownership structures to hide their identities.
With geopolitical tensions around the world and rapid changes in sanctions lists, this verification helps to ensure that the company complies with Anti-Money Laundering (AML) regulations able to avoid the risks associated with dealing with shell companies that tend to be high risk due to potential money laundering opportunities, as well as tax fraud, or other criminal gangs that are their own experts of financial crime.
Scope of the KYB process
iDenfy’s team further explains that KYB is not just a regulatory requirement; it’s a fundamental step in securing business against financial crimes and reputational damage: “With the complexity of today’s business landscape, having an automated solution like iDenfy’s can help companies comply efficiently and confidently. Some organised crime groups create companies that exist on paper, and in reality, when you start assessing standard information, like their address, registration number, related persons, etc., you can notice certain red flags,” explained Ciulde.
“However, there are multiple pinpoints that compliance teams need to go through, and, unfortunately, without any kind of software, this is an impossible task due to the scope of the KYB process.”
iDenfy’s KYB platform
iDenfy updated its KYB key and added advanced sanctions and PEP screening to ensure businesses
With this in mind, iDenfy also updated its KYB solution and added advanced sanctions and Politically Exposed Persons (PEP) screening to ensure businesses are not working with fraudulent individuals. This is vital to maintain a proper risk management strategy, as risk profiles change along with changes in sanctions lists or PEPs status.
Additionally, iDenfy’s KYB platform has integrated adverse media checks, which scan global news sources to identify any negative information linked to a business or its owners. According to iDenfy, these automated features streamline the entire KYB process, making it a seamless part of the business onboarding flow.
Automated KYB solutions
It’s worth mentioning that KYB requires businesses to verify several key data points, ensuring the company is legally authorised to conduct business activities, verifying any legal documentation required for operations, or identifying shareholders who hold 25% or more ownership of the company. Historically, businesses conducted KYB checks manually, leading to inefficiencies, data inconsistencies, and errors.
Manually collecting and verifying information created delays in the onboarding process, leaving companies vulnerable resulting in non-compliance or even fraud. The introduction of automated KYB solutions has significantly improved this process. Compliance officers can now avoid time-consuming manual procedures and rely on automation to ensure accuracy and efficiency.
Risk-based approach to AML
iDenfy believes that a proper KYB-proof system should handle the need for speed and accuracy
iDenfy believes that a proper KYB verification system should address the need for speed, accuracy, and compliance, allowing organisations to conduct KYB checks in real-time. By automating this process, iDenfy’s solution allows companies to verify business information and check UBOs quickly and efficiently, ensuring compliance with FinCEN’s Customer Due Diligence (CDD) Final Rule and similar regulations worldwide.
As claimed by iDenfy, KYB compliance should also help businesses meet the requirements regulated not only in one country but globally to be able to follow a risk-based approach to AML and conduct due diligence to mitigate any risk.
Newly updated KYB platform
“Our automated KYB solution empowers businesses to conduct thorough due diligence without compromising efficiency. We’re proud to offer a user-friendly, reliable tool that keeps companies compliant and helps them operate securely in a rapidly changing regulatory environment,” added Domantas Ciulde, the CEO of iDenfy.
iDenfy’s automated KYB platform can be an ideal solution for companies looking for speed, accuracy, and ease of use. iDenfy invites other organisations to try its newly updated KYB platform for free, so that businesses can see firsthand how the platform simplifies compliance-related tasks and enables companies to meet regulatory requirements without slowing down the overall onboarding process, as well as reducing operational costs.
