How to Choose the Best Document Retrieval Service for KYB

In brief: 

• A document retrieval service (DRS) is a software (or other type of tool) that helps risk teams obtain documents for KYB/KYC purposes.
• Businesses use document retrieval services in a KYB capacity to help them determine if business documents are legitimate or not, as well as to assess risk of starting — or continuing — business with specific entities.
• When choosing a DRS, an organization should consider which types of documents it needs to retrieve to properly verify a business, as well as what aspects of this process can be automated.

An organization that wants to serve — or partner with — other businesses needs to be able to trust those businesses are operating legitimately. One of the key ways to do that is to verify the authenticity of the business’ formation documents and other essential paperwork.

This is easier said than done, however. Organizations have to navigate the tricks fraudsters use to forge documents, as well as the technical countermeasures used to stop this activity. On a higher level, an organization needs to be prepared to do this with different types of documents, sometimes in various formats and in different languages.

Many organizations turn to automated software in order to retrieve the documentation of businesses they want to onboard. This article discusses why these services are used, what organizations need to consider in choosing one, and what some of the best options are.

First, we talk more about what document retrieval solutions are and why organizations can find them useful.

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A document retrieval service is a software tool that searches for official business documents and collects copies of these documents for business verification purposes. These documents are used to conduct due diligence when onboarding companies and initiating B2B relationships.

How are document retrieval services useful for business verification?

Document retrieval services find and collect the documents you need to complete business verification, and are critical for onboarding businesses.

Having copies of these documents helps an organization determine if a business is operating legally before deciding whether or not to start a relationship with it. This is useful to an organization for a number of reasons:

• Conforms to KYB and other AML/CFT regulations
• Reduces the risk and liability of working with illegitimate businesses/people
• Builds trust among other clients/partners
• Preserves the organization’s reputation

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The features most desirable in a document retrieval solution, at least when it comes to B2B onboarding, revolve around speed and reliability. Speed is imperative, as it’s what allows your team to move forward with verification and get clients onboarded and operational. It’s also essential that you source business documents from official sources so you can confidently rely on these documents to authenticate businesses.

With that in mind, here are some capabilities an organization definitely should ask about when trying to choose the right document retrieval provider.

Document Types

The document retrieval service you choose needs to be capable of retrieving the documents you need to verify entities. This typically involves business formation documents that prove a business exists and is legitimate.

For KYB, you’ll want to be able to get:

• Articles of Incorporation / Organization: A set of documents recording the formation of a company with the proper government body.
• Certificate of Good Standing: A document that confirms an entity has filed all necessary reports and paid all fees with the Secretary of State office in the state they operate.

These documents help you verify whether a company exists, is legitimate, and is operating legally. Checking these documents is a vital first step in verifying a business and assessing the risk associated with a B2B relationship.

Automation

Document retrieval shouldn’t be a time-consuming task. However, for companies that choose to conduct manual and outdated retrieval processes, it often is.

Middesk’s business verification solution automates the retrieval process, saving analysts from having to search each Secretary of State individually, one at a time. The more time you can save on collecting business documents, the more time and resources can be dedicated to verifying these business, conducting proper due diligence, and getting them onboarded and operational.

Our Policies features can further allow you to automate business approval by establishing clearly defined parameters for approval and denial.

Reliable Sources

To feel confident when validating a business, you need to make sure the documents you get come from reliable sources.

Middesk automatically collects business documents directly from Secretary of State offices, leaving you to make informed decisions about risk associated with your B2B relationships.

Quick Response

Verifying businesses shouldn’t hold up your business relationships. The faster you can get companies onboarded, the faster you can both get back to business.

A document retrieval tool needs to be able to retrieve and process documents quickly so that your team can make a decision on a new prospect and reduce friction with clients. Middesk helps you accelerate onboarding by getting you documents in no time.

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As with any SaaS, it’s a constant tradeoff between cost and value. It’s important to keep in mind that failure to verify documents leaves organizations exposed to fraud, money laundering, and other risks. It’s crucial that companies onboarding business partners get the documents necessary to conduct due diligence and verification.

These are some key considerations an organization should think about before choosing a DRS provider or software.

• Required documents: First and foremost, you need a document retrieval service to be able to find and obtain the documents you need for business verification, no matter the industry or jurisdiction that applies.
• Document source: To ensure the documents you’re retrieving are legitimate, you want to make sure you are collecting them from an official, trusted source.
• Ease of use: The best DRS solutions will empower risk teams to do their jobs better, faster, and more effectively. They’re interface needs to be intuitive and easy to use on a day-to-day basis.
• Ease of integration: Implementation needs to be smooth and seamless, and integration with existing KYB systems is imperative.
• Cost: Of course, an organization needs to weigh all of the features and capabilities against a document retrieval service’s cost.

Given all those things to think about, where does an organization start looking for a document retrieval solution that fits its needs? We offer some starting points in the next section.

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Organizations can always retrieve business verification documents manually. But — as we’ve covered — this is extremely time-consuming, as it involves searching each SoS one at a time. Fortunately, there are document retrieval services that will automate and streamline most of this process for you.

Here are some popular document retrieval providers on the market, along with what they bring to the table in terms of verifying business documents.

1. Middesk

Best for: Getting original digital copies of formation documents for US businesses

Middesk makes it simple to retrieve business formation documents for businesses in the US. That’s because we have a direct relationship with the Secretary of State offices in each US state and territory. Businesses are required by law to register their formation documents with these agencies. If those documents exist, Middesk can find the authentic original digital copies of them.

2. Trulioo

Best for: Thorough document type and language coverage

Trulioo is a popular identity verification solution for both individuals and businesses, with information registered on over 5 billion people. While it can verify documents for businesses, it has few other KYB features; it can check for a person or business being on a sanctions list or financial watchlist, but not much beyond that.

3. iDenfy

Best for: Flexible KYB and KYC, including document retrieval

iDenfy is an all-around business verification tool, with document retrieval capabilities It can also screen individuals and businesses against sanctions lists and watchlists, and has some basic risk assessment capabilities. While it also has many customization options, they add to the already above-average friction in using the software.

4. Ondato

Best for: DRS with a choice of methods depending on an organization’s needs

Remotely collect documents required for business verification and onboarding, helping you identify UBOs in about 50 countries. It validates documents through one of three systems: photo-based image analysis, video-based live checks, or user-initiated manual uploads. The overall platform, however, is expensive and can take some work to integrate with an organization’s existing systems.

5. DIRO

Best for: Documents direct from sources to increase security and avoid tampering

DIRO is a document and identity verification platform with worldwide coverage. It pulls data directly from banks, utility companies, government agencies, and other institutions that require ID credentials. This makes it more difficult to alter documents en route. However, with data drawn from so many sources, it can be difficult to tell what information is official and what is not if there is a conflict. Coverage can also vary greatly between countries and types of institutions.

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Get businesses — including their documents — verified straight from official sources with Middesk

Middesk’s direct connection with every Secretary of State office in the US means there’s little need for manual verification work when validating business documents. If the documents exist and are authentic, the SoS will have them, and Middesk will find them and retrieve them for you.

Middesk is also able to get other critical information for assessing a business’s legitimacy and risk. This includes tax registration information, sanctions list and financial watchlist hits, adverse media coverage, web presence, litigations, and more.

See how Middesk makes KYB compliance — including document verification — easy by talking to our sales team.