KYB and ultimate beneficial owner (UBO) detection
KYB (Know Your Business) is the process by which an institution verifies its legal entity customers, their ownership structure, and the natural persons behind this structure. TruvaLI resolves the ownership chain layer by layer to reach the ultimate beneficial owner (UBO) who exercises actual control over the company.
Why is corporate onboarding more difficult?
With individual customers, there is only a single identity to verify. For legal entities, however, there is the company itself, its shareholders, the shareholders of those shareholders, and authorized signatories. A significant portion of money laundering typologies exploit precisely these layers: hiding the ultimate owner behind multiple shell companies is the most common way to evade scrutiny.
MASAK regulations on the identification of ultimate beneficial owners target exactly this point. The obligation is not merely to record the list of shareholders, but to identify the natural person who holds ultimate control.
Resolving ownership structures
TruvaLI traces a company's shareholders and their own ownership structures to identify natural persons with a shareholding of 25% or more. The result is not just a list, but a visual structure showing all layers and shareholding percentages. If an individual at any link in the chain is on a sanctions list or has a PEP record, this is directly reflected in the parent company's risk score.
Even if the shareholding percentage falls below the threshold, actual control indicators, such as signature authority and board membership, are evaluated separately.
Trade registry gazette parsing
Authorized signatories, titles, and the scope of representation authority are automatically extracted from the registry gazette text. Compliance officers do not need to read the gazette and manually enter the relevant fields: the system presents the extracted data linked directly to the source text, ensuring that the justification in audits is never lost.
Corporate risk scoring
Companies are scored not only based on their shareholders but also on their own profile:
- Activity code (NACE): Certain sectors inherently carry higher risk, which can also be utilized in transaction monitoring scenarios.
- Year of incorporation: A newly established company starting with high transaction volumes is an indicator in itself.
- Shareholder risk: Screening results of the natural persons in the chain are reflected in the company's score.
- Title and address overlaps: Multiple companies registered at the same address are flagged for network analysis.
Monitoring does not end at onboarding
Ownership structure is dynamic data. When a share transfer occurs, a new shareholder enters, or an authorized signatory changes, TruvaLI detects this and recalculates the company's risk score. If a new shareholder appears on a sanctions list, an alert is generated the moment the change occurs.
Benefits for the institution
Ultimate beneficial owner (UBO) identification is fully recorded along with its justification and source.
Manual data entry from the trade registry gazette is eliminated.
Corporate customer risk is evaluated in the same scenario engine as individual customers.
Changes in ownership structure trigger an alert immediately, without waiting for the next periodic review.
Common questions
- Who is an ultimate beneficial owner (UBO)?
- An ultimate beneficial owner is the natural person who ultimately controls or benefits from a legal entity. In practice, a shareholding of 25% or more is typically used as a threshold, but individuals who exercise control through signature authority or management control are also evaluated, even if their shareholding percentage is lower.
- What is the difference between KYC and KYB?
- KYC verifies individual customers through identity documents, biometrics, and screening. KYB, on the other hand, verifies legal entities and additionally requires resolving the ownership structure to identify the natural persons behind them. The KYB process also includes KYC checks for every natural person in the chain.
- What happens if the ownership structure changes later?
- When a change is detected, the company's risk score is recalculated. If a new shareholder appears on a sanctions list or has a PEP record, an alert is generated immediately, without waiting for the next periodic review.
- How many layers deep does the system go?
- The chain is traced until natural persons are reached; there is no fixed limit on the number of layers. Structures that cannot be resolved or that contain loops are flagged for investigation rather than being silently bypassed.