Find out what Know Your Business (KYB) is and how it benefits you when doing business.
In 2018, Bayer, the German pharmaceutical giant, bought the American agrochemical Monsanto for more than $ 63 billion. Although it seemed like a good deal, Bayer is now in serious financial trouble after having to deal with the multi-million dollar lawsuits and bad reputation it inherited from Monsanto.
Risks don’t just exist when two companies come together to create a partnership or do business. Every time a company, large or small, deals with a new partner, supplier or other company, it must make sure that it is dealing with trusted entities and that this business relationship will bring it benefits and not problems.
What is KYB?
A Google search of the company with which we are going to do business is usually the first step in finding out something about its reputation. However, despite the fact that the information on the network is a lot, of course it is never enough to know if we can really have a business relationship with it. Just as banks and other financial entities have Know Your Customer (KYC) protocols to prevent money laundering or other illicit activities with their clients and users, companies from all sectors implement processes to meet other companies or suppliers with whom they want to work, these processes are called Know Your Business (KYB).
KYB involves finding out about the background and reputation of the company we are dealing with, but it also focuses on the people who lead the companies such as their legal representatives or shareholders. One of the purposes of KYB’s policies is to collaborate closely with governments to prevent companies from being used for money laundering and from financing organized crime activities (AML/TF); but they also work as a strategy to avoid doing business with shell companies.
KYB in Mexico
Although Mexican regulation is not yet as specialized as in Europe and the United States, the truth is that it also includes measures to validate the identity of the companies with which you want to do business and thus prevent illicit acts such as fraud.
Before, Mexican companies were reluctant to implement Know Your Business (KYB) processes due to the human and material resources that this implied. It took weeks to do a manual review of the documents, in addition to which it was difficult to know if falsification or alteration had been committed in the data presented by the other companies. Fortunately, today, there are solutions to make this process fast, safe and much less expensive.
KYB in the age of digital transformation
The introduction of digital technologies in identity validation processes and the use of artificial intelligence has revolutionized the way KYB policies can be carried out. Due to the increase in businesses that are done remotely and globalization, today more than ever it is necessary to make technology an ally when doing business.
No longer do you have to wait weeks to find out if a potential partner is trustworthy, automated processes ensure that time consuming and expensive work gets done in seconds. Today’s technology allows you to save resources and have the certainty that your potential partners are reliable and that they will help you grow your business.
Tu Identidad as a solution
We understand the challenges you face when doing business with new partners. Our regulatory experts can advise you to quickly and easily implement the KYB processes that best suit your needs.
Tu Identidad has modules that will allow you to save time and money, as well as protect your company, such as the background check with which you can find out if a company or its representative has been involved in an illegal activity or you can implement the use of the digital signature that guarantees the inalterability of a document, as well as the proofs that validate the identity of any person.
Carrying out KYB processes not only prevents you from doing business with shell companies or with unreliable partners, but also helps you create a digital file that allows you to optimally manage the documents of any company and mitigate any crime related to identity theft.
If you want to know more about our services, contact us and book a demo!