Know Your Business (KYB) is a compliance and verification process used by banks, payment service providers (PSPs), fintechs, and other financial institutions to confirm that a business is legitimate before providing financial services. KYB helps organisations verify a company's identity, legal status, ownership structure, and beneficial owners. It is a key part of anti-money laundering (AML), counter-terrorist financing (CTF), and broader regulatory compliance programmes.
Before a business can open an account, access payment services, or establish a financial relationship, providers typically perform KYB checks to understand who they are dealing with and assess potential risks.
The exact process varies between providers and jurisdictions, but KYB typically involves collecting and verifying information about a business.
Common checks include:
Providers may also perform sanctions screening, adverse media checks, and risk assessments as part of the review process.
Know Your Business and Know Your Customer are closely related compliance processes, but they focus on different types of customers.
Many regulated organisations conduct both KYC and KYB as part of their anti-money laundering (AML) and compliance programmes. Together, these processes help financial institutions understand who they are doing business with and identify potential financial crime risks.
KYB helps financial institutions reduce fraud, money laundering, sanctions risks, and other forms of financial crime. Without proper business verification, providers may unknowingly onboard shell companies, fraudulent businesses, sanctioned entities, or organisations attempting to conceal their ownership structure.
For legitimate businesses, effective KYB processes help build trust and enable access to banking, payment processing, merchant accounts, and other financial services.
KYB is often a key part of merchant onboarding and merchant underwriting. Before approving a merchant for payment processing, a provider typically needs to verify that the business exists, identify its owners, understand its activities, and assess its risk profile. The results of KYB checks can influence onboarding decisions, transaction limits, settlement terms, monitoring requirements, and overall risk classification.
