Know Your Business (KYB) checks exist to answer a simple question before you send anyone money: is this supplier actually who they say they are? In practice, that question breaks down into a handful of concrete checks — and most onboarding processes skip at least one of them.
Entity verification
Confirm the supplier’s legal entity exists and is currently active in the jurisdiction where it’s registered. This means checking against the actual corporate registry the entity is registered with — not just accepting a company name and address on a form.
Registration and status checks
Beyond existence, check the entity’s registration status. A dissolved, suspended, or deregistered entity is a hard stop, and this status can change after onboarding — which is why re-verification matters as much as the initial check.
Beneficial ownership signals
Where available, beneficial ownership data helps identify entities with structures designed to obscure who actually controls them — a common pattern in shell-company fraud and sanctions evasion.
Bank account ownership
The bank account a supplier asks to be paid into should be validated as belonging to the entity you’re onboarding — not just a plausible-looking account number. This is where microdeposits and account-ownership validation earn their keep.
Documentation matched to risk tier
Not every supplier needs the same level of scrutiny. Define documentation requirements — contracts, insurance certificates, compliance filings, certifications — based on supplier risk tier (spend level, jurisdiction, industry) rather than requesting everything from everyone or nothing from anyone.
Re-verification triggers
KYB isn’t a one-time gate. Build in triggers that force re-verification: a bank account change, a significant increase in payment volume, a jurisdiction with elevated risk, or simply the passage of time (e.g., an annual review for high-risk suppliers).
Putting it together
Individually, each of these checks is straightforward. The challenge is doing all of them, consistently, for every supplier, without turning onboarding into a weeks-long manual process. That’s the gap automated KYB validation is built to close.