KYB and KYC are both methods used to verify a client’s identity before they do business. Both require critical information about the individual and the business. The information required varies depending on the method used. Both methods help companies identify a person’s identity and protect their interests. Despite differences in approach, they are both equally important for protecting a company’s interests. Here are some key differences between the two.
KYB refers to a process that identifies and verifies a company’s legal representative before providing a service. KYB is often used to reduce fraud and increase trust. In the world of fintech, KYB is an essential tool to protect a company. However, it is not only important for the fintech industry. Any business needs to ensure its clients are safe and protected. KYB can be implemented to prevent financial fraud and protect any business.
While KYC requires financial institutions to verify the identity of all parties, businesses may not have beneficial owners who are required to be listed. Because there is no obligation to verify the identities of unreported or unidentified beneficial owners, certain businesses are exempted from KYB requirements. KYB checks help financial institutions and other regulated organizations monitor their risk. But they require a higher volume of data than KYB.
Routable, for example, requires clients to complete a KYC verification process. This is a standard procedure, aimed at simplifying the process and protecting all parties. It requires clients to provide basic documents and upload information. Fintechs also need to perform KYC verification to protect themselves from exposing themselves to the risk of money laundering. KYB requirements vary from country to country. But, in general, KYB is mandatory for financial services.