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In the vast financial landscape, verifying the ultimate beneficial owners of the company is an essential task to combat money laundering and terrorist financing. Advancements in technology streamline this process through machine learning and AI technology. Previously, the financial institutes took months to verify the business, but digital UBO checks convert this in real-time. UBO checks are essential to ensure that companies are not engaging in illegal activities and identify potential risks. Companies should also be aware of any changes in ownership of their assets, which can help identify suspicious activities. This article is about digital UBO checks and why they are essential

What are UBO Checks? 

The ultimate beneficial owners (UBOs) are the 25% shareholders of the company’s interest. They have the legal right to control the business decisions and vote on directors’ strategies. There are various types of business ownership structures, such as sole, LLC, general partnership, corporations, etc. Most companies use the complex ownership structure to disguise their real owners. This assists them in hiding their illegal gain and conducting money laundering behind these legal shareholders. To unveil the complex ownership structure of companies’ financial institutes, implement UBO checks to identify real owners. 

Why is UBO Identification essential? 

UBO checks directly reveal the bad actors behind the business. It assists financial institutes in preventing criminals who use bogus companies to launder their illegal gain. To comply with the KYB regulations, verifying ultimate beneficial owners is essential. UBO identification supports companies in making adequate decisions before onboarding partner businesses. This also increases brand loyalty and enhances the compliance position of financial organizations. By UBO checks, banks, insurance, fintech or other financial institutes identify the company and their owner, which are flagged previously.

How to Automate UBO checks?  

The manual UBO identification is time-consuming, costly and full of errors. It is a challenge for companies to make adequate decisions with human representatives. However, UBO screening is a critical step during Know Your Business compliance for financial institutes, which can not be overstated. That’s why technological advancements have made this complex process straightforward and accurate. Below are steps to verify UBO online:

Gather Company’s Bio-data 

To verify the UBOs, financial institutes verify the company profile and ensure their legitimacy through document verification. Once the company’s profile is verified, the registration agent collects the required data for verifying their UBOs, such as financial statements, shareholders’ names, addresses, position, and key management personnel, depending on the nature of the business. The required data can be changed or customized if the financial institutes verify it through digital business verification software, which saves data collection time. 

Verification of the data 

After collecting the information of the UBO and their individual role in the business. Financial institutes cross-check shareholders’ data from various databases. Third-party government databases, such as AML, PEPs, and criminal records information, are used to ensure shareholders of the companies are not involved in illicit activities. Automation can do UBO screening in seconds, whereas manual screening takes weeks. The cross-reference of all shareholders ensures that financial institutes comply with international regulations to combat money laundering and terrorist financing.

Risk Assessments 

When the UBO identification is done, financial institutes attest to the risk associated with onboarding their business. For risk assessment, digital software designs the latest algorithm, which the companies can customize according to the nature of the business. It assists to find out levels of risk through monitoring, jurisdictions of the country, structure of the business, and source of funding. 

Unveil Complex Ownership

Under the FATF regulations, companies must create transparency in their ownership structure. However, most illegal operators have complex structures, and the UBO checks assist the companies in unveiling the hidden owners of the business. Online software centralized this in visualization reports to create transparency in the owner’s structure. This report can be upgraded anytime to add new shareholders or information about the company. A centralized report safeguards the financial institutes in any future law enforcement case. 

Perpetual Supervision

In this era of constantly upgrading regulations, financial institutes need ongoing monitoring. Online UBO checks provide them with perpetual supervision. After the UBO identification, the real-time data integration continues, where the software adds all the latest information about the company, including shareholders, financial statements, ownership structures, and much more. It assists financial institutes in upholding the latest international and national regulations without fearing hefty fines. 

The bottom line 

UBO verification is essential for financial institutes to comply with the rigid KYB laws. Previously, manual KYB verification and compliance with UBO due diligence were not simple. It is time-consuming, costly and error-prone. Online UBO checks software streamlines the business onboarding for the financial institutes. Moreover, it enhances their security through machine learning and robust technology to combat various financial crimes


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