Know Your Business (KYB)

Overview

How it works and why it matters

KYB establishes that a business customer is a real legal entity and identifies relevant owners, controllers and authorized representatives under applicable requirements. The necessary checks depend on role, jurisdiction, product and risk. Verification is ongoing, not a one-time document collection exercise.

Important technical and operational details

Verification should establish that the entity exists and that the people acting for it have authority. Screening and risk assessment may cover sanctions, adverse information, industry, geography, ownership complexity, source of funds, and consistency between stated and observed activity. A document check alone is not complete due diligence.

The business profile should be refreshed after ownership, control, location, product, or risk changes. Providers need evidence, decision records, escalation, and privacy controls. KYB reduces identity and financial-crime risk, but it does not guarantee that every future transaction or commercial claim is legitimate.

This design lets reviewers assess older Know Your Business (KYB) outcomes without replacing the original facts.

For reconciliation , Know Your Business (KYB) should remain linked to Business-to-Business (B2B), Business-to-Consumer (B2C), and any Subscription Business.

Practical decision points

A useful KYB file answers four questions: Does the legal entity exist? Who owns or controls it? Who has authority to act for it? Does its activity fit the provider's legal and risk rules? Documentary evidence can include corporate registers, ownership declarations, resolutions and screened names, but the accepted evidence varies by location. A business using a nominee or layered holding structure can require further checks. Review should be proportionate to risk, with secure handling and retention of personal data. KYB conclusions must be updated after material ownership changes rather than permanently inherited from the original onboarding date.

Related concepts

Risk Assessment; Reconciliation

Further reading

• fatf-gafi.org documentation
• fatf-gafi.org documentation