KYB
Know Your Business (KYB) is the process by which a regulated firm verifies the identity, ownership and legitimacy of a business customer before providing it with financial services.
What it involves. KYB is the corporate counterpart to Know Your Customer (KYC), which applies to individuals. Onboarding a business means confirming that the company genuinely exists and is what it claims to be: checking incorporation records, registered address and trading status, identifying the people who ultimately own or control it (the "ultimate beneficial owners"), and understanding the nature of its business and expected activity. Firms also screen the business and its owners against sanctions and adverse-media lists, and assess the risk the customer represents.
Why beneficial ownership matters. The hardest part of KYB is usually ownership. Companies can be layered through holding structures, trusts and nominee arrangements that obscure who is really in control — precisely the structures used to hide illicit funds. Regulations therefore require firms to trace ownership to the natural persons behind a business, typically anyone holding more than a set percentage of shares or voting rights. Establishing this reliably, across jurisdictions with different corporate registries and disclosure standards, is one of the central challenges of business onboarding.
Where it fits. KYB is a core part of anti-money-laundering compliance and a precondition for opening business accounts, extending credit or providing payment services. It is not a one-off check: firms are expected to keep business records current and re-verify when ownership or circumstances change, a practice known as ongoing due diligence. Done well, KYB protects the firm from onboarding criminal or sanctioned entities, satisfies its regulatory obligations, and gives it an accurate picture of the customers it serves — which in turn supports everything from transaction monitoring to risk assessment.