In this era of the tech revolution, it is very necessary for businesses to utilize the most appropriate solutions to identify business entities before establishing partnerships with them. Due to prevailing fraud attacks and criminal activities, Law Enforcement agencies have also devised various regulations that make it necessary for companies to verify other businesses before establishing relationships with them. As per the requirements, Know Your Business (KYB) and Anti Money Laundering (AML) are necessary compliance for businesses. 

Businesses may have beneficial owners (UBO), which can be more than one. It is necessary to verify the  UBOs of potential entities to identify their risk potential. UBO screening is also a major part of business verification. It enables organizations to have real-time security from fraudsters and money laundering. 

This blog post will highlight the role of UBO verification in different industries. Also, it will highlight the information required in the ultimate beneficial owner verification process. 

Ultimate Beneficial Owners – An Overview 

Ultimate beneficial owners are members of the directory board of any organization, as they hold more than 25% of a company or business. However, the shareholding percentage for UBO may vary as per the jurisdiction of a specific region. 

UBOs can be silent or actively involved in everyday business operations. However, their authenticity is necessary for the trustworthiness and credibility of any organization. Companies that have hidden UBOs or those who are part of illegal activities are not secure to work with them in the form of partnerships, investments, or other.  Without screening the ultimate beneficial owners, a company or business cannot move forward with the deal. 

What is UBO Verification? 

Ultimate Beneficial Owner (UBO) verification is the complete process that provides a thorough screening of UBOs. This process consists of various steps, such as information collection, verification, and validation through automatic cross-checking. It involves artificial intelligence technology in the form of automated checks, which are pre-trained and offer the most streamlined process for identity verification and authentication of UBOs. 

UBO verification is a necessary part of corporate due diligence, which organizations perform to identify the risk potential of entities before onboarding. It also contributes to legal compliance as UBO verifications make businesses free from money laundering attacks and terrorist financing.   

Which information about UBO is Necessary to Verify? 

Once a company identifies someone as UBO of an organization they are planning to establish a partnership with, they need to collect certain information about that person. In many cases, UBOs are transparent, and companies submit their information by themselves. Whatever the scenario, it is necessary for organizations to collect the following kind of information about Ultimate Beneficial Owners (UBOs):

• Full Name as per the ID documents. 
• Designation (if any, within the business or company)
• Residence details, including country and state.
• A complete home address is needed as per the billing documents, such as in bank statements. 
• Social security number 
• Passport number and issuing country.
• Any other ID that is issued by the federal government.

Which Organizations Require UBO Verification Service? 

Every industry that deals with other companies for work requires a UBO verification service. This service ensures the transparency of relevant organizations and contributes to enhanced security for the business or company. UBO verification is a necessary step in corporate due diligence and anti-money laundering (AML) screening. The following sectors require UBO verification service:

Financial Institutions 

Financial sectors, including banks, brokerage and insurance firms, money exchange platforms, and credit unions, require UBO verification services to validate businesses or companies they work with. It is necessary for financial sectors to identify the risk potential of entities before onboarding them, as it is part of their regulatory compliance. Without UBO identification and verification, they cannot reach the potential risk and can provide services to those organizations that are involved in money laundering and other criminal activities. Hence, they can lead financial sectors to suffer with hefty fines and reputational damage. 

Travel Agencies

Travel agencies often have close relations with various colonies that outsource their tourist guide service and hotel packages. Travel agencies have direct partnerships with tourism companies and offer it in the form of a complete package to users. This kind of working model requires enhanced security for fraud and legal complications. Hence, Ultimate beneficial owners of relevant corporations are necessary to identify for secure business deals.

Healthcare

Healthcare organizations have to deal with various business entities, such as manufacturers, pharmaceutical companies, and medical device makers. They are required to identify the nature of relevant organizations for successful dealing and security protocols. Many pharmaceutical companies have to establish partnerships with businesses operating in the healthcare industry and require UBO verification services in this regard.

Final Words 

Ultimate beneficial owners (UBOs) verification is necessary for companies as it works to enhance security from shell colonies and fraudsters. UBO screening is part of due diligence and anti-money laundering compliance. It helps businesses to establish secure partnerships and business deals. Ultimate beneficial owners are important members of any company who directly affect relevant corporations.