Business verification has become an increasingly important line of defence against financial crime, yet the complexity of modern corporate structures is exposing weaknesses in how firms establish who they are really doing business with.  

Fragmented data, opaque ownership arrangements and increasingly sophisticated fraud techniques are making it harder to distinguish legitimate businesses from those concealing illicit activity.

As regulatory expectations tighten and criminals find new ways to exploit gaps in corporate identity checks, the limitations of traditional Know Your Business processes are becoming harder to ignore. RegTech providers are now looking to close these gaps through richer data, automated verification and more continuous monitoring.

A first key question to ask is how can firms establish who ultimately owns or controls a business when corporate structures span multiple jurisdictions?

According to Bhavin Shah, CEO of Sherlocq, knowing who you are really doing business with remains one of the hardest problems in compliance.

He explained, “A business can pass onboarding checks while the people who ultimately own or control it remain difficult to identify and that picture can change after the checks are complete.”

Verifying a business can look straightforward, as a company has a registration number, filed documents and a registered address. However, KYB is often more complicated than verifying an individual: ownership may run through several companies, nominees or legal arrangements, sometimes across jurisdictions, making it difficult to establish who ultimately owns or controls the business.

“A firm may verify the immediate shareholder and still have an incomplete picture of the person at the end of the chain.

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