Glossary
KYB (Know Your Business)
KYB is the process of verifying a business customer: its legal existence, its ownership, its directors and the legitimacy of what it does. It is the corporate counterpart to KYC.
KYB, Know Your Business, is the due diligence a regulated firm performs on a business customer before onboarding it and periodically thereafter. Where KYC establishes who a person is, KYB establishes what a company is, who ultimately owns and controls it, and whether its stated activity is plausible and permitted.
What it involves
- Existence and standing — confirming the entity is registered, active and not dissolved, usually against a company register.
- Ultimate beneficial owners — identifying the natural persons who own or control the company, typically above a 25% threshold, and running KYC on each of them.
- Directors and controllers — identifying and screening the people who run it.
- Screening — sanctions, politically exposed persons and adverse media, on the entity and on each individual.
- Nature of business — understanding the actual activity, the expected flow of funds and whether the sector falls inside the firm's risk appetite.
Why it is harder than KYC
Individual identity verification is largely solved: a document, a selfie, a database check. KYB is not, for three reasons. Registry data quality varies enormously between jurisdictions and is often stale. Ownership chains run through several entities and several countries, and resolving them to natural persons can require documents that no registry holds. And the "nature of business" assessment is a judgement, not a check — which is why it is the step that most often lands in manual review.
The practical consequence for platforms onboarding businesses is that straight-through processing rates are far lower than for consumer onboarding, and the gap is filled by an operations team.
What to ask a KYB provider
Coverage by jurisdiction and registry, straight-through rate for your specific customer profile, how ownership chains are resolved when a registry is silent, what the manual review workflow looks like and who performs it, how ongoing monitoring and periodic refresh work, and how their output maps into the audit trail your own regulator or partner will ask for.
Ask providers about this directly
Put the question to several providers at once in a structured RFP, and compare their answers side by side instead of one call at a time.
Related reading
- Seven reasons BaaS providers reject applicantsRejection from a banking-as-a-service provider is usually a risk decision made early and rarely explained. Here are the seven reasons it happens — and what to change before you apply again.
- Paying marketplace sellers across bordersSeller payouts across corridors: what breaks, which provider categories are involved, and the questions that separate a payout provider that works from one that looks like it does.
- Launching a business account inside a SaaS platformWhat a vertical SaaS platform needs to offer its customers a branded business account: the licence question, the stack, the onboarding reality and the sequence to procure in.