KYB (Know Your Business)

A vigilant pursuit of understanding, Know Your Business (KYB) refers to the process by which financial institutions and other organizations verify and assess the identity, legitimacy, and risk profile of their business clients, partners, or suppliers, ensuring compliance with regulatory requirements and fostering a secure and transparent business environment.

Example

When a company applies for a business loan, the financial institution may conduct a KYB check to verify the company's registration details, ownership structure, directors, and financial history. This process might involve reviewing official documents, checking databases, and assessing the company's risk profile in terms of potential fraud, money laundering, or other illicit activities. By performing KYB checks, financial institutions can mitigate risks, maintain regulatory compliance, and contribute to a trustworthy business ecosystem.