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KYB (Know Your Business) and its relation to KYC

(KYB) Know Your Business process is not so different from the most widely known and standardised Know Your Customer (KYC) process. The difference from KYC lies in the purpose and intentionality of the process, which is focused on identifying companies and suppliers.

In this article, we will try to explain the KYB definition and its relation to KYC concepts.

# KYB vs KYC verification: What is KYC?

Know Your Customer (KYC), corresponds to the process carried out by certain companies to identify and verify the identity of their customers in a compliant way with regulations in force.

It is a process that tries to fight money laundering, terrorist financing, tax crimes and phishing by registering a user as a customer of a company.

Both KYC and KYB follow AML standards. Together with eIDAS, AML5 (or 5AMLD) establishes the digitalisation of KYB/KYC processes and provides complete security, legal guarantees, and a high degree of trust for client and business digital onboarding processes.

# Know Your Business meaning and KYB requirements

What is Know Your Business? The KYB business verification process shares all the features we have seen in defining the KYC process. The difference lies in the user being identified. While in the standard process, potential clients or users are identified to be registered in a company, the Know Your Business process is the one in which the person responsible or legal representative of a business is identified.

Most B2B (Business-to-Business) companies need to carry out due diligence to identify the businesses they work with and fight money laundering and other tax crimes, in addition to ensuring that they work with organisations with security and guarantees. Even so, on the great majority of occasions, as in the financial sector, legal KYB AML compliance is mandatory.

Companies that offer professional services to other companies or those that constantly work with SMEs and freelancers must establish KYB procedures to identify legal representatives of these businesses and verify their connection with the client company.

As with the KYC process, digital KYB solutions help reduce costs, eliminate bureaucracy, and develop control methods that are safer and more reliable than traditional identification methods.

# Know Your Business (KYB) checks and the Business-to-Business environment

The use of the KYB (Know Your Business) term, or BKYC (Business Know Your Customer), is relatively recent. The demand for these types of solutions has skyrocketed due to the announcement of various regulations in many states around the world that forced its implementation. Because of digitalisation and delocalisation of processes, companies that provide products and services to other companies (B2B) must establish Know Your Business procedures.

They need to reduce costs and times of administrative procedures and simplify previously tedious and complex processes, while ensuring that relations with their B2B clients are protected and have adequate legal support, also developing internal compliance policies concerning relationships with customers and suppliers.

Signicat, Know Your Business reference partner and KYB solutions: 

Signicat develops innovative digital identification solutions supported by artificial intelligence and machine learning. As a RegTech provider of technological solutions, Signicat accompanies dozens of companies from all sectors in their KYB and KYC online processes to achieve Know Your Business compliance.

VideoID, a unique technology in the market that meets security requirements demanded by AML5 and eIDAS, is presented as the market-leading digital IDentification and Video-onboarding standard. An agile, simple and totally digital solution that is equivalent to face-to-face identification.