Data, Partner

The key to onboarding good businesses (at scale)

  • The challenges of business identity can exacerbate credit accessibility, fraud risks, and regulatory compliance issues.
  • Hany Fam, Founder & CEO of Markaaz, shares an innovative and scalable approach to KYB which includes resolution, verification, and monitoring.

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The key to onboarding good businesses (at scale)

By Hany Fam, Founder & CEO of Markaaz

Business identity is of paramount importance in today’s diverse business ecosystem, regardless of the scale of operations. For the past four decades, traditional data companies have mainly focused on collecting data from medium to large businesses. This left a significant gap in data collection for small businesses, which financial institutions like banks and lenders had to fill on their own. According to the Federal Reserve’s Small Business Credit Survey, 40% of small businesses have difficulty obtaining credit, highlighting the repercussions of this data deficit. This shortfall has had other consequences too, for example when millions of Paycheck Protection (PPP) loans were either not issued or fell into the hands of fraudulent recipients. 

Nevertheless, technology and innovation are rapidly evolving, reshaping our understanding of business identity regardless of the company’s size, in ways we couldn’t have imagined a few years ago.

In the realm of financial services, businesses seeking credit cards, loans, or bank accounts, must establish their identity and meet stringent criteria. This involves providing firmographic, financial, and compliance information, such as who they are, what they do, their financial health, and their future trajectory.

Central to this process is Business Entity Resolution (BER) a critical part of the process that ensures accurate identification and validation of businesses. While many companies are entering this space with web-based solutions, it remains challenging to find fintechs that are focused on gathering registrar data and enhancing it with reliable sources. While investing in business entity resolution and refining data stewardship techniques can be tough, when it’s done correctly, it leads to superior data quality that exceeds conventional standards. Today, achieving this level of quality is possible at a large scale and with real-time response rates, albeit only by a select few.  

Business Entity Verification (BEV) emerges as another indispensable aspect for businesses across the spectrum, including banks, fintech startups, and retailers. Whether it’s the straightforward validation that the provided information matches a valid and active business, or the enhanced Know-Your-Business (KYB) screening is in line with regulatory frameworks of the industry, BEV is unfolding across the financial sector and beyond at an all-time high. Decisioning, a variation of customer verification and onboarding, where a customer is approved or declined based on pre-set criteria, is another way to expedite near real-time customer onboarding – a necessity in a world where consumers can access services with a click of a button, and business owners increasingly expecting the same.

However, BEV is just half of the equation. Given the dynamism of smaller entities characterized by rapid directional shifts and high turnover rates, maintaining updated data assumes equal significance. With Business Entity Monitoring (BEM), a reliable data provider receives daily updates, ensuring stakeholders remain informed. Continuous monitoring of both business and compliance information serves as a linchpin of effective risk management in an ever evolving business landscape. 

From entity resolution to verification and monitoring, staying abreast of the latest technology and practices is essential for business of all sizes in today’s dynamic environment.

Enter Markaaz, offering real-time verification and monitoring services via API, or batch and browser-based solutions. Their global business directory, which spans the Americas, Europe and Asia, enables a 30% higher match rate compared to legacy providers and other fintech companies, a result of years of refining data stewardship and matching techniques. The company’s unconventional approach supported by seasoned advisors, strategic investors, and world-class customers, sets them apart in the industry. Learn more here.

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