FATF - KYB made easy

Know Your Business (KYB) is an essential part of client onboarding, required by regulations, internal policy and of course to minimise risk. Yet it remains one of the most time-consuming, resource intensive and inconsistent compliance functions. Manual processes, reliance on disparate entity data registries, and unreliable documentation all contribute to inefficiency and risk. Standardising legal entity identification with the LEI presents a smarter way forward.

 

The problem with traditional KYB

KYB processes involve verifying the identity of a legal entity, its directors, and its beneficial owners. This often includes:

  • Collecting documents from multiple jurisdictions
  • Reviewing business registry records
  • Manually validating ownership chains
  • Reconciling inconsistent naming conventions

These checks are costly, prone to human error, and slow down customer onboarding, particularly for cross-border clients or complex corporate structures.

 

The LEI as a standard, global identifier

The Legal Entity Identifier offers a globally consistent solution for identifying legal entities:

  • Issued through a validation process by accredited and regulated LEI Issuers
  • Standardised identification across markets and interoperable with cross-border activities
  • Linked to verifiable reference data (e.g. name, address, jurisdiction) with access to transparent ownership and control data

By using LEIs as a foundational identifier in KYB processes, often as the connector between other data sources and vertical identifiers, institutions can reduce friction and improve data quality.

 

Operational benefits

Time efficiency: Replacing manual document checks with LEI-based lookups accelerates onboarding and avoids duplicated effort across departments and jurisdictions.

Cost reduction: automated identity checks reduce time spent on subscribing to fragmented vertical or regional entity identifiers, and reduction in time spent on research and follow-up.

Enhanced accuracy: LEIs are verified and regularly updated, minimising human error.

Centralised records: LEI data can be integrated directly into compliance platforms or CRMs.

Better customer experience: Faster onboarding leads to improved client satisfaction and retention.

 

Example integrations

  • RegTech Platforms: Use GLEIF APIs to pre-fill onboarding forms with LEI data
  • Banks: Validate counterparty identity before initiating wire transfers
  • Marketplaces and PSPs: Verify business customers and reduce fraud exposure

 

Preparing for continuous KYB

The traditional KYB model relies on point-in-time verification, which may quickly become outdated as organisations move address, merge, restructure etc. By using LEIs in combination with automated monitoring, organisations can transition to a model of continuous KYB where entity status and ownership changes trigger compliance alerts.

 

LEIs and the future: Verifiable Credentials (vLEI)

GLEIF’s next-generation initiative, the verifiable LEI (vLEI), enables cryptographically signed credentials for legal entities. This could make KYB even more secure and instantaneous by:

  • Reducing document exchange
  • Enabling real-time verification
  • Identification, and approvals, of authorised representatives
  • Supporting cross-border digital trust

 

Implementation guidance

Benefiting from LEI transparency can be a relatively straightforward initiative for any organisation. Steps to implementation include:

  1. Encourage customers to obtain and maintain an LEI
  2. Use LEI reference data to map entity group structures
  3. Embed LEI checks in KYB and risk workflows
  4. Monitor for changes in LEI relationship data

Organisations can achieve step 1 by referring clients to a GLEIF-accredited LEI Issuer like RapidLEI, or alternatively and in order to ensure FART is met, consider registering LEIs on behalf of clients via RapidLEI’s partner programme.

 

Conclusion

KYB doesn’t have to be a bottleneck. By adopting the LEI as a standard identifier, compliance teams can build a more efficient, accurate, and scalable onboarding process—paving the way for continuous KYB and greater trust in business relationships.

 

Next step: download our free white paper on Achieving FATF Compliance with the LEI