The KYB process involves due diligence measures that a firm performs in order to gain a deep understanding of its corporate clients.

Its main objective is to make sure your business doesn’t unwittingly enter into a business partnership or relationship with a company that has close connections with illicit or fraudulent activities.

By collecting vital information about customers’ ownership structures and screening associated parties against politically exposed person lists, diverse media, and watchlists, your company can identify possible jeopardies and make data-driven decisions about entering into business partnerships or relationships.

So, what are the best practices for implementing an effective KYB process with Enigma? Let’s find out more.

Five Best Practices for Executing an Effective KYB Process

From legacy financial institutions looking to improve their corporate screening measures to start-ups implementing their first KYB processes, these best practices can be used by companies to establish an effective KYB risk management framework.

Establish KYB Procedures and Policies

Business procedures and policies should be recorded to guide efficient financial management, mitigation of risk, and the internal operations’ alignment.

Also, these documents should be reviewed periodically to make sure that they remain consistent with the risk appetite of a company as well as the external environment.

To make sure analysts understand how specific company screening chores should be approached, businesses may decide to document these KYB procedures and policies.

  • The senior manager’s name who is responsible for the creation and implementation of the KYB policy and relevant procedures
  • What happens if a company or associated entity is deemed high-risk
  • How often the KYB procedures and policies will be reviewed
  • Any monitoring controls in place
  • How to report suspicious activities to designated authorities

Offer Training to Workers

Workers are a company’s first defense line. As a result, they need to get appropriate training from the right experts concerning how to effectively handle KYB checks per the procedures and policies of the company.

Training workers is a vital component of any successful business. It ensures the staff has the much-needed knowledge and understanding needed to identify any red flag indicators as well as emerging trends.

Perform Continuous Monitoring

After a corporate client has gone through the entire KYB screening process, they need to be subject to continuous monitoring measures.

Ongoing monitoring involves regularly checking and evaluating all the risks associated with your business and its entities to make sure they meet the compliance requirements and the risk appetite of an organization.

Automated software that help screen entities against adverse media, watchlists, and sanction lists should be prioritized to create an accurate image of a client at any given time. Also, continuous monitoring can provide your company with valuable insights that can help boost its KYB process continually.

When your company analyzes information gathered in the continuous monitoring phase, you can easily identify and refine compliance controls as well as update procedures and policies to adapt to any changing risks.

A KYB process with Enigma can help you streamline your approach to corporate screening as well as onboarding while boosting efficiency and conversion rates.

You’ll enjoy beneficial KYB features such as watchlist (OFAC) screening, high-risk activity classification, and verification of company and owner identity from state secretary filings.