ID Verification - KYB

The Importance of KYB in the Marketplace Economy

January 20, 2023
May 29, 2024
Table of Content

In many ways, the digital world has become one big marketplace. Consumers no longer simply go to one website or another to purchase goods and services, but in marketplaces that facilitate shopping from many different sources. These are also forums where people share information and interact with one another in a digital environment, and often transact with other consumers, not just businesses.

While the marketplace economy has transformed digital commerce, it has also introduced its own set of fraud and cybercrime risks and the need to have strong onboarding and authentication controls in place. Marketplaces need robust Know Your Business (KYB) protocols in place to keep users safe, root out bad actors and avoid regulatory pitfalls. 

A New Form of Digital Commerce

The marketplace economy and embedded payments have transformed digital commerce. At the click of a button and with minimal friction, and without having to enter and re-enter payment information, customers can buy products and services from merchants or other individuals seamlessly, anywhere in the digital world through these digital marketplaces.

This has added a great deal of convenience to online commerce, but it has also introduced its own set of fraud and cybercrime risks and the need to have strong onboarding and authentication controls in place.

Marketplaces platforms that facilitate these transactions also have to have stringent KYB protocols in place in an environment where everyone is a business. At the same time, merchants must ensure they are complying with all relevant payments and data regulations across the globe.

Some of the pitfalls that can occur without proper KYB in place include:

Fraud - Without verifying that everyone on the platform is who they say they are, and operating in good faith, marketplaces run the risk of rampant fraud. This leads to users abandoning the platform and potential legal issues.

Reputational damage - A lack of trust can harm the reputation of the online marketplace and its users, such as by negative reviews and complaints.

Regulatory issues - Marketplaces that fail to protect their users may be subject to fines or other regulatory action.

Increased costs - The platform may need to invest in additional security measures, customer support, and dispute resolution mechanisms to address trust issues.

Keys to Successful KYB

Having the right processes around KYB can not only help companies stay compliant, but ultimately be more successful. Improving KYB processes means you can serve business clients more quickly and with a high degree of efficiency. Steps include

Effective onboarding

This means a seamless experience that also roots out bad actors before they can come on the platform. This goes for both consumers and sellers

Account security

All user accounts must be protected from fraud attacks. This means having the proper security protocols in place.

Continuous monitoring

No matter how tight your defenses; it’s likely some bad actors will slip through the cracks. This means you must continually monitor the platform for signs of fraud.

Identity Management

Everyone who comes to the marketplace must be who they say they are. Fraudsters often try to obfuscate their true identity or location. You must be able to accurately identify everyone that comes to the platform.

Caf - KYB The right Way

With Caf KYB, companies can take previously manual processes and automate them, turning the task of verifying new business clients from weeks or even months into mere minutes. 

Here’s how we do it. 

  • Unparalleled Data Coverage Caf has the most comprehensive KYB database in the market, covering 250 countries and jurisdictions globally with data from over 400 corporate registries, 200 fully integrated international watch and sanctions lists, import-export lists, global UBO lists and 430 million credit reports.
  • UBO Due Diligence: Verify all stakeholders and UBOs for any business as well as conducting distance calculations between your potential clients and watchlisted entities, including comprehensive beneficial ownership information from high-risk and hard-target jurisdictions, such as China, Mexico, Russia, and offshores tax havens.
  • Flexible Orchestration: Create or tweak workflows to build dynamic and personalized customer onboarding forms. Optimize user approvals by configuring customized search rules that compare data against relevant databases.
  • Global Credit Scoring: Caf offers comprehensive global company credit scoring, which includes full company financials and maximum recommended credit limit, as well as any court judgements and late or missed payments. 
  • Suspicious Activity Reports: Caf KYB seamlessly supports suspicious activity reports with court-admissible source documents, which are accessed instantly directly from the platform. 
  • PEP and Sanctions Risk: Instantly identify sanctions risks, including including formerly sanctioned entities, direct subsidiaries of sanctioned entities, and entities closely linked to sanctioned entities, as well as if any UBO or business owner is currently on a PEP (politically exposed person) list. 


In the absence of robust KYB processes, companies are at a greater risk of fraud and regulatory non-compliance. Having robust KYB in place, however, allows organizations to accurately vet potential business clients, stay compliant with the prevailing regulations, reduce manual operations and drive revenues.

KYB can be a complex endeavor. Get in touch with one of our experts now to learn more about how Caf can help your business optimize its KYB processes.  

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"The Importance of KYB in the Marketplace Economy"