In today’s digital environment, robust business verification solutions have never been more critical. Whatever the size of your company, ensuring the legitimacy of your business interactions is paramount.
While the digital revolution has improved how businesses operate, it’s also given rise to sophisticated forms of fraud. In 2020, compliance spending reached $213 billion USD worldwide, while laundered funds estimates totaled over $2 trillion USD. The cost of fraud is also not only financial—it extends to reputational damage and loss of customer trust.
In this article, we examine some of the most common business verification and compliance challenges plaguing companies today. We also provide tips on how to get the most out of your business verification solution to avoid costly gaps in your onboarding and customer risk management processes.
Common business verification challenges companies face
Partnering with entities involved in fraudulent activity, such as money laundering and terrorist financing, is a serious breach of Know Your Business (KYB) regulations. But implementing severely stringent or outdated business verification processes can result in companies turning away legitimate business transactions or partnerships.
While many companies have already incorporated business verification technology into their processes, others are still verifying potential partners and customers the old-fashioned way—through manual means. Still, not all business verification solutions are created equally. Here are some of the most common challenges businesses face with their verification solutions:
Project prioritization and lack of resources can impact development timelines. But bad application programming interfaces (APIs) and software development kits (SDKs) can also hugely contribute to developer delays. They’re often characterized by:
- Poor documentation: Because the documentation is inadequate or unclear, developers struggle to understand how to use the API or SDK.
- Inconsistency and unreliability: This means extra time for debugging and troubleshooting, and developers may have to find ways to work around unexpected issues.
- Limited functionality: Poorly designed APIs or SDKs often lack essential features or provide limited functionality. Developers may need to find alternative solutions, leading to even more delays.
- Security concerns: This can mean inadequate authentication mechanisms or security vulnerabilities. As a result, developers have to invest time in implementing additional security measures.
Data quality issues
Some business verification solutions come with incomplete, outdated, or inaccurate data. These issues typically arise due to data entry errors, stale or mismatched data, or even fraudulent data. Plus, business databases change often. All these can result in false outcomes, forcing compliance officers to conduct time-consuming manual checks.
Null responses occur when a verification process fails to provide a conclusive result. This leaves companies uncertain about the legitimacy of the user or transaction. Since most KYB data providers don’t specialize in SMBs, null responses to SMB queries are more frequent. This can be due to incomplete information, technical glitches, or mismatched data. As a result, companies either reject a potential customer or initiate a manual, resource-intensive review process.
With some verification solutions, it can take hours or even days for web miners to collect enough information to verify a customer. Slow verification delays onboarding, leading to frustration among customers and potential business partners. This affects the user experience, which can result in lost opportunities and revenue.
Five tips to make the most of your business verification solutions
For verification solutions to work in your favor, keep the following in mind:
1. Make sure developers have the tools they need
Ensure your business verification solution provides comprehensive API documentation and developer-friendly tools. Is the vendor proactive in offering support? Collaboration between developers and the solution provider helps to promptly address any issues that may arise.
2. Educate partners and customers about verification best practices
Many small businesses are unaware of data inconsistencies that exist about their company. They may also be unaware of incomplete data that causes them to fail KYB procedures. By educating your potential business partners on the importance of regularly cleaning up their data, you can improve your KYB outcomes.
3. Opt for a solutions provider that offers quick, comprehensive business lookups
Setting up a business verification solution may take time. Choose a business verification provider that provides on-demand access to comprehensive KYB data while waiting for your dev team to complete the setup.
The Markaaz Business Lookup is a no-code business verification solution that allows companies to perform business lookups immediately. Users can automatically retrieve any information they need about a company listed in the Markaaz Directory, which includes over 300 million records from companies worldwide, 98% of which are small businesses. With immediate access to reliable data, you can verify and onboard customers more accurately and efficiently—all while your developers are setting up your integrated delivery system.
4. Balance automation and manual checks
While automation ensures efficiency, manual checks add an extra layer of scrutiny. Use automation for routine tasks and manual checks for high-risk scenarios.
5. Use a KYB data provider that specializes in SMBs
Are null responses or incomplete data common during SMB verification? If so, it’s best to partner with a KYB data provider that specializes in SMBs. This reduces the likelihood of null responses and improves verification accuracy.
Don’t settle for subpar business verification solutions
Achieving business compliance relies on accurate data and robust KYB procedures. Don’t settle for a slow and subpar verification solution that you aren’t 100% sure you can trust. Combining exceptional data quality with automated APIs, Markaaz offers a powerful business verification solution that provides both speed and accuracy, the two critical elements for effective business verification.