Kyckr, the corporate Know-Your-Customer company, has unveiled the latest iteration of its UBO (ultimate beneficial ownership) verification tool, which reduces the time it takes banks and financial institutions to verify new customers by up to 80%, and ultimately helps stop financial crime and money laundering.

In recent years a stream of leaked documents has shown how company structures are routinely obfuscated and misused for financial crime and tax evasion purposes. Since the Panama Papers were published in 2016, leaks have revealed the hidden beneficiaries of almost 800,000 offshore companies, often used for illicit purposes such as laundering the proceeds of financial crime, evading taxes or disguising the true ownership of property. 

Identifying and verifying the ultimate beneficiary of a company is a regulatory requirement and an essential part of the KYC process for financial institutions. It can take a KYC analyst up to 8 hours to uncover the details of every UBO in a complicated ownership structure, with resource costs regularly exceeding $400-500 per customer or supplier onboarded. For a bank with 100,000 entities to verify annually, this could mean UBO verification costs of $40 million per annum or more.

In addition to the costs of manual UBO verification, financially regulated businesses who fail to properly verify their customer and supplier UBOs risk significant regulatory fines. According to data gathered by Kyckr, in 2022 global financial institutions were fined over $3 billion for AML compliance breaches, most of which were due to due diligence failures. 

Kyckr’s latest UBO verification capability automates the process of identifying the UBO and provides accurate verification in seconds, not hours. By combining live, legally-authoritative company data with the latest technology, it extracts, normalises and matches ownership information, automating the analysis and visualisation of corporate ownership structures and calculating ultimate beneficial ownership in real-time. This automation saves regulated businesses significant time, effort, and ultimately money, and allows analysts to focus on higher-value tasks.  

Steve Lamb, COO at Kyckr, said:

“Our customers include five of the top 10 global banks and two of the top five payments companies. In discovery with customers, we found that the UBO verification process was one of their major pain points. Without access to live, accurate data, unwrapping the ownership structure of a company takes hours for an analyst to complete and ultimately costs banks millions every year.

At Kyckr, we’re passionate about using technology and live data from the world’s legally-authoritative sources to help companies stop money laundering. When you stop money laundering, you also stop human trafficking, the drug- and illegal wildlife trades—even terrorism. All these criminal activities rely on money laundered through legitimate companies and financial institutions. With Kyckr’s UBO Verification solution, we’re making the job of financial criminals much, much harder.”

Example ownership structures requiring verification 

Complex structure with a single UBO 

For more information on UBO Verification including why it’s important, how to do it and what challenges and red flags to look for, Kyckr has put together a comprehensive guide, which can be download here: https://go.kyckr.com/l/855523/2023-07-24/h8zbb