When it comes to compliance, the terms KYC (Know Your Customer) and KYB (Know Your Business) are often used interchangeably, but it's important to know that they each serve distinct purposes. Understanding how they differ and how to collect data for each effectively, is essential for any compliance, treasury, legal or onboarding team tasked with risk management.

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What Is KYC?

KYC focuses on verifying the identity of individuals: typically beneficial owners, directors, signatories or high-risk persons like Politically Exposed Persons (PEPs). This includes collecting personal documents such as:

• Passports or national IDs
• Proof of address
• PEP checks / declarations
• Sanctions screening results

The goal is to ensure that individuals connected to a transaction or business relationship are legitimate and do not pose a compliance risk.

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What Is KYB?

KYB, by contrast, centers around verifying legal entities. That is, your actual counterparties. KYB collection ensures the legitimacy of a business entity and includes gathering:

• Company registration documents
• Corporate structure charts
• Ultimate Beneficial Owner (UBO) details
• Business activity and risk profile
• Sanctions and watchlist results on the entity

KYB often requires data from registries and third-party sources to validate information in real time.

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Why Both Matter for Compliance

A robust compliance program can’t stop at individual checks. For example, onboarding a vendor or customer may involve both the company (KYB) and its directors or UBOs (KYC). Ignoring either part increases exposure to fraud, money laundering or hidden ownership structures.

In many jurisdictions, regulators expect organizations to perform both KYC and KYB checks - especially when operating across borders or in high-risk sectors like financial services, crypto or investment management.

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Focus: KYC Collection in Practice

KYC Collection is not just about gathering documents. It involves the creation of a repeatable, secure and efficient system for verifying identify. One that evolves with your organization’s compliance needs.

Modern KYC tools go beyond document storage. They intelligently automate the collection, review and reuse of data - streamlining processes across teams, jurisdictions and counterparties.

Unlike traditional approaches that rely on static PDF forms, Excel spreadsheets or Word documents, advanced KYC platforms enable:

• Smart Reuse of Data: Automatically map existing answers and documents to new KYC requests, so you’re not asking colleagues or counterparties for the same information twice.
• Dynamic Reminders and Flags: Built-in prompts flag missing, outdated or inconsistent information in real-time - before it becomes a compliance risk.
• Centralized, Searchable Records: All KYC data is stored in one place, with audit-ready access for compliance, legal and audit teams.
• Built-In Refresh Cycles: Set rules based on risk tier to ensure timely updates and regulatory alignment without relying on manual tracking.

Outdated workflows, like emailing editable PDFs, chasing signatures via scanned documents, or relying on locally stored Excel trackers, are error-prone, inefficient and increasingly non-compliant.

By investing in the right KYC collection tool, compliance teams eliminate bottlenecks, reduce human error and build trust through consistent, professional and policy-aligned Due Diligence (DD). That means faster onboarding, cleaner audits and a more resilient compliance posture.

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Closing Insight: One Without the Other Isn’t Enough

KYC ensures you know who you're dealing with. KYB ensures the company itself is legitimate. In today’s regulatory climate, you need both. For compliance teams, the key is building integrated workflows that collect, verify and monitor both individual and business risk - and all without slowing down the business.

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