Verification Of Company- The Need Of The World To Fight Against Business Frauds
Verification of company is getting widespread popularity in the digital world due to immense threats of money laundering and not being able to comply with updated strict regulatory laws. The launder of funds has summed up to 2% of the world’s GDP according to UNODC. Furthermore, identity thefts and financial crimes are becoming prevalent as the world shifts to the digital market.
According to a PwC report, 47% of small and large-scale businesses have been victims of fraud in the past 24 months. These stats prove the need for verification of the company.
Verification Of Company – The Corporate KYC
Verification of company in other words is known Your Business (KYB) verification. The meaning of know your business is the investigation and evaluation of any business under Anti Money Laundering (AML) and Counter Finance Terrorism (CFT) rules
Businesses have been facing immense challenges to combat fake business identities and catch fraudulent actors involved in their channels. Consequently, verification of companies against their registered business documents approved and stamped by the government mitigates the chances of business identity fraud.
Knowing the business is similar to knowing your customer verification. The only difference between the two is that Digital kyb solutions are identity verification of a business whereas KYC is identity verification of a customer. Therefore when “verification of company” is performing then effective due diligence is achieved. Due diligence is performing audits and investigating the financial documents before onboarding a business client.
Furthermore, due diligence is a well-maintained procedure for inspecting and reducing hazards associated with a company. It is also performed when an investor is wanting to invest in any share through available public data.
Why Verification Of the Company Is Essential?
With KYC verification, fraudulent customers can be catch and potential risks can minimize within a business. However, it still does not detect and analyze frauds and money launders from partnering businesses.
Some businesses have upheaved tactics to run a black fund business. For example, shell companies and front businesses mix illegal and white funds and present them legally. They achieve this heinous act by manipulating financial records such as over-invoicing and under-invoicing. Additionally, they show that they have achieved higher revenue than they actually have which makes it extremely difficult for regulatory authorities to find the exact amount of laundered money.
Moreover, criminals can also bribe and indulge banks when a high level of money laundering needs to perform. This is why verification of the company ensures financial sectors have a safe and secure business against fraudulent activities.
Alarming information that can cause frauds
- The office address and the delivery address is not the same
- A user is indulging in transactions with a high-risk user
- Financial records such as audit reports, investment records, or bookkeeping are not balancing or have missing information
- Prompt changes in shareholders or high management authority such as ultimate beneficial owners
How A Company Is Verified Through Know Your Business Verification?
Online kyb verification solutions checks are performes by extracting information about a business through publicly available data.
- Background checks will be running on ultimate beneficial owners
- The address should be verified along with verifying that all addresses are the same
- Trademarks will be thoroughly checkes
- Registered documents will be checkes for any photoshop or tamperes data
- Bank accounts information must then collects and examines to check the legitimacy of the business.
A detailed check must be performed on all official documents that are publicly available such as
- Financial statements
- Shareholders list
- Audit reports
- Investment records
Information of all higher authorities of a business will be collectes and then verify for instance,
- Directing authorities
- Individuals holding 25% of the share or more
- Political affiliations
This is performes so that any individual involving in criminal activities such as counter financing or money laundering will expose in the eyes of regulatory authorities.
Business partners and the association with other business entities are revieves to see if they deal with any business that has a history of breaking the law.
Summing It Up
Verification of a company can help in keeping a corporate sector free of any prevalent frauds. These verifications aid in improved compliance with anti-money laundering and CFT. Furthermore, they help companies safeguard their finances from hefty fines and sanctions.
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020