You already know all about KYC. But do you KYB as well?
In “Know Your Business: $12 Billion Reasons You Should Care,” OWI Labs details the overlooked KYB market, a subset of Know Your Customer, estimated at $5.6 billion in 2017, growing to $11.8 billion in 2022. This timely report comes as regulatory demand for KYB heats up in the U.S., EU, Australia, Hong Kong, Japan, Singapore and more.
KYC is a well recognized process of due diligence surrounding the identity verification and risk assessment of a businesses’ clients. But while some of these clients may be
natural persons, others may be business entities.
Know Your Business, or KYB, is a subset of KYC that focuses on the identity verification and risk assessment of a businesses’ business entity clients and their beneficial owners (BO). The need to establish trust through the KYB process is common in the financial services sector, which is governed by strict regulatory structures to help combat money laundering and criminal finance.
Other findings from the new report include:
- The main driver of KYB services comes from increased focus on thorough due diligence of legal business entities and beneficial owners from regulators in the European Union and United States.
- Due diligence costs for institutions under regulatory oversight are high, due in part to the complexity and manual nature of many aspects of the KYB due diligence lifecycle.
- The ability to reduce end costs for institutions while maintaining sufficient quality standards during the KYB lifecycle will drive KYB solution adoption.
- Technology applications reduce the cost of compliance but are still limited by high risk entities and regions with limited identity transparency.