How to Create a Business Verification Process

Elena Popovici

May 30, 2022

How to Create a Business Verification Process

Business verification, commonly known as Know Your Business (KYB), is an essential anti-money laundering (AML) process for businesses. KYB techniques allow business owners and compliance officers to devise robust policies to onboard business customers, partners, investors, suppliers.

These policies help in preventing suspicious transactions and account activities. Not only do corporations need it, but it is becoming more of a problem for SMBs and different fast-scaling startups that don't always have a dedicated compliance department as the corporations have. So, all kinds of companies and organizations need to figure out whether they are working with a legitimate company or if it's just a facade.

Through essential KYB checks, it is easier for businesses to verify the identity, legitimacy, history, and background of companies and ensure regulatory compliance. So, it helps them create a more trusted environment free from money laundering.

Why is Business Verification Important?

Business Verification is a critical component of due diligence in the B2B world. As a business dealing with another business, you need to confirm the authenticity of the company and its representatives.

The repercussions of engaging with a bogus or illegitimate business can be dire and may even get you in legal trouble. Not to mention the wasted time, money and most of all, the damaged reputation, that come with going in blind into a sketchy business deal.

A diligent business verification or KYB process digs deep into the business and its leaders. For example, is the business involved in a lawsuit? Is it on any financial or regulatory watchlist? Is the company complying with regulations?

According to Experian, B2B fraud sets back American businesses more than $50 million every year. From invoice fraud to data compromise, working with a bad actor can harm your business.

Even if you come out of the problem financially sound, your reputation might not. And in the business world, relations are heavily reliant on reputation.

If you think a quick Google search or a Facebook page can confirm if a business is clear, you'd be surprised to know how easy it has become for businesses to appear legit. Besides, KYB goes beyond verifying basic details of a business and verifies particulars that may not even be public.

Google search
Google search. Source: Google 2022.

Moreover, business verification isn't just for banks or financial institutes anymore. With financial and data protection regulations becoming increasingly stringent, the obligation to verify clients and partners extends into many other industries.

Setting Up a Business Verification Process

Businesses should be checked according to the Anti-Money Laundering (AML) regulations in the jurisdiction the business operates in. Different countries have special nuances, however the general rule of thumb is that better to check more than less.

During the process of KYB you should understand whether the business you are dealing with actually exists, it operates in legitimate way, all the people and involved entities are clear in terms of Sanctions and watchlists, and you have done everything in your power to understand the company through and through.

In other words, the process checks whether the company or its shareholders have any skeletons in their closet.

Furthermore, you may also want to verify the people you're directly working with, for example, a customer liaison at the business. This is also applicable to small businesses or private contractors.

For this crucial process, you'll need the experts.

Vespia makes the process of business verification remarkably easy. It lets you verify businesses within seconds.

Typically, Vespia's business verification solution helps identify:

·   The legitimacy and validity of the business

·   IDs of founders, representatives, owners

·   Business ownership structure

·   PEP & Sanctions

·   Beneficial Owners (UBOs)

·   Adverse Media

Key Considerations While Setting Up a Business Verification Process

When setting up a business verification process, you need to ensure that it doesn't become tedious for you and for the company you are verifying. Otherwise, the company representatives me be tempted to leave the process and opt out of the deal due to the long onboarding time.

So, here are some considerations that will help you.

Type of Verification Process

A typical business verification process can be completed in two ways:

Manual Verification

Firstly, the manual process involves skimming through all the documents manually. You will need to request documents from commercial registers, check countless sanction lists, look up PEPs and adverse media. Additionally, you will need to verify the IDs of the company representatives and UBOs.

This is a time-consuming process and one that is prone to error. According to some stats, manual verification can take up to four months.

Searching manually without a tool might be a hassle, as the data accessibility is limited. Many countries don't even have public commercial registers. There is also no single database for PEPs and when it comes to sanctions - be prepared to skim through thousands of sources. So, it's tough to search all jurisdictions.

The biggest con of a manual verification is the time and effort that you put into the process. This is why many prefer to outsource this to a team of lawyers or an auditing firm, spending thousands of dollars to verify a single business.

Semi-Automatic Verification

Next, a partially automatic verification process involves a third-party customer verification service. With partially automatic verification, you can achieve the verification result in a much quicker time.

However, the negative side is that usually the modern solutions in the world of AML prefer to concentrate on one specific part of the KYB process, such as identity verification, sanctions, UBOs, etc. Therefore, in order for you to achieve the full KYB process, you will need to integrate and combine tens of different solutions.

Interestingly, very few products provide comprehensive features for complete business verification. However, Vespia software quickly closes that gap, providing businesses with essential information without wasting time.

Steps to Set Up Business Verification Process with Vespia

Vespia is a powerful tool harnessing AI technology. Combine that with cloud connectivity, and you have a highly powerful platform that can provide immediate access to critical business information. As a result, it reduces the complexity of your business verification process.

With Vespia, it's just a three-step process to complete your business verification process. Here is how:

Step 1 - Sign Up and Search

Once you become a Vespia user, you can search for your desired company on the platform. While filling in the company details, you only need to provide three pieces of information, i.e.:

·   Company Name

·   Registration Code

·   Country Name

Vespia's platform
Vespia's platform 2022.

Step 2 – Check the Results

Thanks to access to a large repository of business data, you can get your hands on the results within 30 seconds. In addition, Vespia offers AI-powered analysis, providing you with a comprehensive company overview in a few minutes.

Step 3 – Decision Time

It may have been only a couple of minutes since you entered the company name, but you can already make the decision. Based on the analysis from Vespia, you can quickly decide whether you can trust the company.

Why Choose Vespia for Business Verification Process?

With Vespia, comprehensive business information is always at your fingertips. Here are a few reasons to choose Vespia for business verification:

·   The business data comes in under 30 seconds from a company search.

·   Vespia is 37x cheaper than the traditional business verification tools platforms because of its' pay-as-you-go model. More importantly, there are no hidden fees.

·   Real-time access to information from more than 4000 AML databases and 300 commercial registers. So, you always have the most up-to-date information. Hence, it helps in making the right call for your business.

·   Thanks to AI-powered analytics, Vespia offers the most important information about your potential business customers as you make critical decisions. Moreover, you have a virtual assistant that provides valuable support if you need additional documents for your business's safety and compliance.

Get in touch with Vespia

Considering that Vespia is an easy, fast, and flexible tool to verify businesses, it is an automatic choice for business verification. If you would like to get a personalized demo and discover how Vespia can improve your customer onboarding process, please book a consultation with us.

Or just test it and see for yourself, and let us know what you think!