How to Integrate Successful KYB Compliance in a Marketing Agency?


Marketing agencies are constantly onboarding new clients, it is complicated for them to onboard different clients and deal with various projects simultaneously. With all these, they must meet the rigid regulations to protect themselves from the regulatory authorities’ unwanted fines. These companies can use marketing agencies for their illicit activities, most counterfeit companies are involved in money laundering. Know Your Business KYB is a regulation designed to protect businesses that rely on other businesses (B2B). KYB compliance ensures the business is authentic and legitimate by identifying the company’s identity. 

What are the KYB Checks? 

 It is simple for a business to learn what KYB means and how it works. The KYB check is the process of identifying the company and its ultimate beneficial owners ( UBOs). Often, it is involved in verifying the company by its name, address, phone number, source of funds, financial statements, and activities. Additionally, for KYB compliance, marketing agencies must analyze the business risk according to their location and the industry in which they work. KYB regulations are constantly upgraded with time, such as Financial Action Task Force ( FATF) changed international guidelines to combat money laundering and financial scams. For KYB compliance, it is also essential for the businesses to identify all ultimate beneficial owners of the company and ensures they are not involved in any criminal activity. 

Why is KYB Compliance Essential in Marketing Agencies? 

By the effective KYB process, marketing agencies can protect themselves from financial losses resulting from money laundering, criminal activities, and fraud. There are various regulation authorities that make sure businesses meet various obligations and identity their customers. In the marketing industry, the USA Patriot Act and the Financial Crimes Enforcement Network (FinCEN) set regulations, that companies must meet during the KYB process. These obligations came under the AML regulations, and noncompliance with these obligations can cause costly organizations and lead to hefty fines. 

In the marketing agency, retaining the customer after onboarding is the most difficult task. Developing an effective onboarding process ensures a streamlined procedure and verify clients stay with the agency. KYB compliance protects the marketing agency’s reputation by showing the client that the company is only working with legitimate clients and not involved in working with any high-risk industry client. 

How Streamlined KYB Compliance Process? 

Digital KYB compliance enhances the security of the marketing agency and accuracy while meeting regulatory requirements. The traditional technique of verifying the business is time-consuming and overloaded for the customers and the companies. Most companies neglect KYB’s compliance because of its challenging checks. This one mistake makes them vulnerable to scammers and regulatory fines authorities. Noncompliance marketing agencies can face hefty fines and legal courts or end in a sentence. Given below are some steps which accelerate KYB compliance:

Predefined KYB Procedure 

Review the client onboarding process time by time to discover the procedure’s loopholes. Before onboarding a new client, monitor KYB checks to see if these are according to AML regulations. Established guidelines streamline the onboarding process and identify the client business effectively. It ensures a user-friendly onboarding process, which is simple for clients. The complex compliance process is the main reason behind the customer bounce rate. Companies should design the KYB compliance procedure according to specific requirements essential for business verification. It will reduce the time and accelerate the onboarding procedure. To have a positive impact on customers, companies must redefine their onboarding procedures. It should clear all the documentation and information needed for the business verification before starting the process. With a clear predefined KYB compliance process, companies can effectively and constantly onboard clients. 

Risk Assessment Framework

Implement the risk assessment algorithms which divide the clients according to their risk levels. Conduct the risk according to the industry they work in and the services they are using. Marketing agencies should determine the client risk according to the factors which are hazards for the company, such as the location, business, nature of transactions, source of funds, and the ultimate owners of the company. For adequate risk assessments, marketing agencies should categorize risk levels as high, medium, or low. A business that creates transparency in their company and legitimate paper works falls in the low-risk, and high-risk companies have politically exposed persons (PEPs) or working in high-risk industries.

Screen Beneficial Owners 

A Company can have various ultimate beneficial owners (UBOs), to reap authentic results during business verifying marketing agencies should screen all the UBOs separately. It provides information about the company owner’s structure and source of funds. The marketing agency can identify beneficial owners by screening all the information against watchdogs’ sanction lists of government and private parties. For that, agencies must collect identity-verifying documents and all required jurisdiction papers of business beneficial owners. 

Automate KYB Compliance 

Overall verifying businesses for marketing agencies is as vital as for financial institutes. The effective KYB compliance procedure protects companies from scammers and enhances growth. Traditional business verification is complicated and time-consuming for the marketing agency. There are various know your business kyb service provider that automates the onboarding process with advanced technology. Marketing agencies can use these service providers to streamline this complicated process and onboard clients confidently. 

The post How to Integrate Successful KYB Compliance in a Marketing Agency? appeared first on Datafloq.



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