Article 5 min

Know Your Business strategies and ideas

Know Your Business strategies and ideas

The world is moving toward instant cross-border business transactions. But this growth demands organizations take action to avoid a massive fraud crisis, poor onboarding techniques and lost business customers.

Digital payments offer faster settlement times and lower costs than traditional payments. But they run the risk of light Know Your Business routines, bad customer experiences and compliance risks. Fortunately, technologies can help automate the process to speed up onboarding, better control fraud and enable regulated entities to provide onboarding user experiences their business customers expect.

Watch the Examining KYB: What’s to Come and How to Prepare webinar

Learn about the payments landscape issues and solutions around business payments and Know Your Customer (KYC) and Know Your Business (KYB).

  • An overview of payments trends in Europe and the U.S.
  • The state of KYB and why it lags behind KYC
  • Predictions for future-proofing KYB strategies


Erik Howell Partner, Flagship Advisory Partners
Garient Evans SVP, Identity Solutions, Trulioo
Mélisande Mual Publisher and Managing Director at The Paypers

Here’s a shortened and edited transcript to provide an overview:

New rails and payments

Various alternative payment methods are becoming more popular, many of which solve gaps in the user experience for e-commerce and remote purchases. Even mainstream banks have gotten into the game with instant credit transfers, more advanced direct debit and instant payments.

Currently, crypto transactions are less than 5% of global eCommerce volume and of that relatively tiny sliver, 95% is still on off-ramp with fiat currencies. But the growth rates are huge and will be a much more relevant form of payment in the future. The underlying technical infrastructure behind it is really come into its own, and now even traditional players are starting to examine it.

As a Service models

Business models are converging; many of the Banking as a Service players will provide you with everything you need to issue payments, and fintech is becoming more of the best-of-breed category killers. Payments are becoming embedded everywhere, from eCommerce platforms to merchant-facing accounting software packages.

Credit innovation
There are fascinating applications in B2B buy now, pay later; for small businesses it’s traditionally challenging to get credit, but now you start to get digital factoring or digital sales finance, forms of payment coupled with financing. Using payments to get that type of credit they need to drive their business is high growth.

The state of KYB

Markets that have developed credit bureaus or registries tend to have robust capabilities in lending, service technologies and developed technology sectors. Part of that is the availability of consumer data allows you to interact digitally safely and transparently.

When we think about the KYC versus KYB markets, KYC is somewhere in the neighborhood of 10 to 15 years more advanced than what we have for business verification. But both require trust and safety, which comes from trusted third-party data to confirm the authenticity of a consumer or business when they’re trying to onboard or transact.

The information depends on government or regulatory obligations; business verification data is only as good as the local market, and the registries make available. Some jurisdictions around the world, like the UK, have been pushing and trying to require transparent registries for businesses, and then you have other markets lagging.

Without a transparent registry of businesses and ultimate beneficial owner data, the technology will not be able to deliver on its potential. Solutions depend on these registries, and governments and regulators must exert their willpower to ensure that the businesses are registered.

Future-proof KYB strategies

We know there’ll be significant changes in regulations and processes, so making appropriate investments in technology and the related orchestration to automate and digitize KYB is crucial.

Companies that have gotten it right and have been able to digitize and automate not only have a significantly better user experience for the customer but can also achieve scale quicker. They can onboard more customers faster and have significantly lower acquisition costs. KYB is one of the immense cost components; if you can automate it, particularly across multiple jurisdictions, you have a significant advantage.

You need good organizational infrastructure to monitor those developments across multiple jurisdictions, and you need to be able to integrate and adapt fast. There are so many good third-party solutions and capabilities out there that can allow you to focus on what they’re good at and what their mission is and use the technology

Most institutions fall on orchestration technology; there is no silver bullet in compliance or verifying consumers or businesses.  There isn’t one point solution that will do it all, so it’s going to require a set of capabilities:

There’s a host of capabilities, and the idea is to layer them together, use them intuitively to create friction for individuals or businesses that pose risk, and ease the way for folks who are easily identified and represent low to no risk.

Orchestration technology is the key to that, so a company should not fall in love with one tool and hard code it because the first thing that fraudsters do is identify that technology or that tool or strategy and then devise a way around it. A company has to be nimble and figure out how to use multiple systems and multiple approaches and adapt as the market changes.