KYB (business verification)
KYB, or know your business, is the process of verifying a business customer rather than an individual one. It establishes that the company is genuinely registered, that its stated activity is plausible, and that the people who own and control it are who they claim to be.
It is the business equivalent of know your customer (KYC), applied to a company rather than a person: KYB verifies the business, then runs KYC on every person who owns or controls it. Verifying the entity is the easy part. The harder step is tracing ownership through holding companies and cross-border structures until you reach the real individuals who control it, each of whom then needs their own identity check. There is no single document that proves who is really behind a business the way a passport proves an individual. Our guide to KYC vs KYB sets out the full comparison, including where the two checks share infrastructure and where they diverge.
What does a KYB check cover?
A KYB check verifies three things in sequence: that the company is genuinely registered and in good standing with the relevant registry, that its stated business activity is plausible and not flagged as restricted or high-risk, and that the ultimate beneficial owners (UBOs) who control it are identified and verified in their own right. Most regimes draw the UBO line at 25% effective ownership, traced through however many holding companies sit in between. Directors and authorised signatories get checked too, since they can bind the company even without an ownership stake.
When do businesses need a KYB check?
A KYB check runs at onboarding, whenever a business applies for an account, a line of credit, or a merchant facility with a bank, payment provider, or fintech. It runs again whenever ownership or directorship changes materially, since the beneficial owners verified at onboarding are not guaranteed to still hold that company a year later. Regulators treat KYB as an ongoing obligation rather than a one-time pass, so a firm that checks once and stops is carrying risk it has not accounted for.
How is KYB verification automated?
Most of a KYB check is retrieval and cross-referencing against sources that are already available: registry lookups, ownership graphs, sanctions and PEP screening. An agent can assemble the ownership chain, run each individual it surfaces through IDV, and flag the minority of cases where ownership genuinely cannot be resolved without an analyst. What it leaves behind matters as much as what it decides: a logged trail of every source checked and every judgment made, which is what an auditor asks for later. The KYC vs KYB guide linked above covers what to weigh before deploying it.
Frequently asked questions
What's the ownership threshold for a KYB check?
Most regimes set it at 25% effective ownership. Trace it through holding companies and joint ownership until you can name every individual who crosses that line, then run each one through its own identity check. US and EU rules both converge on this figure, though some jurisdictions set it lower for higher-risk sectors.
Who has to run KYB checks?
Any regulated business that onboards other businesses as customers: banks, payment providers, and fintechs offering business accounts, merchant acquiring, or commercial lending. The obligation sits with the firm taking on the customer, not with the business being verified, which is why KYB shows up at onboarding rather than as paperwork the applicant files once.
Does KYB replace KYC?
No, they run alongside each other: KYC verifies the individuals opening or operating an account, while KYB verifies the business itself and then triggers a KYC check on every beneficial owner and director it surfaces. A business customer is never verified by KYB alone.
Why does KYB take longer than KYC?
KYC checks one identity against one set of documents. KYB has to unwind an ownership structure first, which can mean several holding companies and more than one jurisdiction, before it even reaches the individuals who need their own check. Registry data quality varies by country, which adds further delay.