A perpetual KYB tool to achieve ongoing compliance
Middesk’s perpetual KYB solution helps you keep track of customers after onboarding
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What is a perpetual KYB tool?
A perpetual KYB (Know Your Business) tool is a business verification software that can detect a change in status for an aspect of business identity verification for your customers, notifying you of this change even after you have already completed KYB compliance when you initially onboarded them.
A perpetual KYB tool — also often referred to as “ongoing monitoring” or “continuous KYB” — works by setting up specific alerts for your customers to check if anything changes related to their status after you’ve taken them on as a customer. You would use it to track things like whether your customer’s SOS registration status changes, they have a new or terminated UCC lien, they appear on a Watchlist, or they file for bankruptcy.
It is critical to know this information quickly so you can take any immediate action necessary to remain compliant and keep your business free of new risks that without a perpetual KYB tool, you might not be aware of.
How Middesk ongoing KYB compliance works
Step 1
Set up Monitoring for your business via the Middesk dashboard, API, or automatically for every business you set up and verify.
Step 2
Set up events for the businesses you are Monitoring, choosing from bankruptcy, registration, tin, lien, and watchlist.
Step 3
Watch for an event to be triggered for a business you are Monitoring, and take any action needed to protect your business.
Information you can get using our perpetual KYB tool
If you need ongoing compliance, you probably need a pipeline into all these business identification verification data points.
Middesk Ongoing Monitoring Events
Data You Can Access
What Do You Need to Know?
SOS Monitoring
Subscribe to specific types of changes associated with business SOS registrations, including the name, people, addresses, or registrations associated with the monitored business.
Bankruptcy
When a new bankruptcy has been found for a business you are monitoring.
UCC liens
When a new UCC lien has been found or a previously open UCC lien has been terminated for the monitored business.
Watchlist
When a new Watchlist hit has been found for a monitored business.
TIN retrieval
When a TIN result has been found from Middesk’s TIN Discovery for a previously unknown TIN on a business you were monitoring.
Business address
When an address has been added to or removed from the business registration for a business you are monitoring.
Business name
When a business or DBA name has been added to or removed from the business registration for the monitored business.
Person’s names
When an individual’s name has been added to or removed from the business registration for a business you are monitoring.
Business registration
When a new registration has been attached to a business you are monitoring, or the registration has been updated.
Applications for perpetual KYB
Achieving compliance when onboarding often isn’t enough, because a change in your customer’s status can mean a huge risk to your business.
Fintechs
Ongoing monitoring keeps friction points for your customers low because you can continue to check on their business registration status or other changes that might affect the services you’re providing for them, all without giving them more forms to fill out.
Insurance
When underwriting new customers, you checked all your compliance boxes. But if that business starts operating illegitimately, or ends up on a Watchlist, you could be providing insurance to a bad actor. Checking periodically on your customers prevents these risks.
Commercial banking
Your customers provided verification information while onboarding that you screened, but any number of things they provided could change, including business names, addresses, or SOS registration status. Remain compliant without causing more friction for them with perpetual KYB processes.
Lenders
You distributed your capital to a new customer that passed all compliance checks, but what happens when the customer ends up on a Watchlist or files for bankruptcy? You need to know right away so you can make critical decisions quickly that mitigate the risk to your business.
Marketplace
Marketplaces have very complex compliance requirements that need to be met, and one of the best ways to ensure your marketplace remains trustworthy for your consumers is through perpetual KYB monitoring that can determine if your businesses end up on a Watchlist.
Payments Service Providers (PSPs)
Ensure your merchants continue to operate legitimately on your platform by monitoring their business registration statuses, ensuring they are still in good standing with the IRS. Too many merchants operating illegitimately can create a significant risk to the trust established on your PSP platform.
Perpetual KYB made easy with Middesk Ongoing Monitoring
Identify if your customer files for bankruptcy
Your customer might have been doing fine when you onboarded them, but you need to know if they’ve filed for bankruptcy so you can take prompt action. If you wait for them to let you know, it might be too late.
See if the business is added to a Watchlist
If your business becomes involved in any activities that would ping a Watchlist, you need to know immediately so you can stop doing business with them and keep your own business compliant.
Detect SOS registration status changes or UCC liens
Is your customer still in good standing months or years after you onboarded them? Knowing if they have made any name, address, or registration changes quickly can help you take next steps to maintain your own compliance.
Run checks on previously unknown TINs
If you’re in the process of onboarding and you don’t have your customer’s TIN yet or can’t find a match, Middesk Ongoing Monitoring can check periodically for you until it finds a match.
Assess perpetual KYB risk with Middesk compliance monitoring
What makes Middesk’s perpetual KYB tool different?
Continuous monitoring
It is not a KYB best practice to onboard a customer and then turn a blind eye, nor will that excuse fly with any regulatory bodies. If your customer changes their registration status, ends up on a Watchlist, files for bankruptcy, or has a lien field against them, you need to know right away.
Complete, fresh data
Middesk has data on 100% of registered businesses in the U.S. (complete), with 92% of business data records updated in the past 10 days (fresh), from a variety of authoritative sources like the IRS, as well as alternative sources like web presence and online footprint (variety).
Check customers every 2 weeks
With Middesk Ongoing Monitoring, after the initial monitoring event is checked, you can set up a cadence to perform checks on your monitored businesses every 2 weeks, making sure you can make decisions as fast as possible — and certainly faster than your customer would have informed you.
Automation through API
Middesk’s business verification API can automate Ongoing Monitoring. Use the Monitor API to create, update and delete business monitors via the Middesk REST API interface to automate perpetual KYB at scale when you onboard a lot of businesses, while still offering fine-tuned control in your application.
How Bill introduced significant automation and efficiency to onboarding workflows
“With Middesk, we’ve introduced significant automation and efficiency into our onboarding flows. We can now compliantly auto-approve over 50% of new applicants, eliminate the risk of onboarding bad actors, and convert good customers faster using their technology."
How Checkr acquired a new customer segment by automating regulatory compliance with Middesk
"Middesk has taken the brunt of the compliance workload off of our customer support team so they can continue helping our customers with timely resolutions to any issue they encounter with their background checks."
How Radius Bank finds more hours in the day with Middesk
“Every minute we’re able to save in processing loans is a minute faster than a small business will have access to the capital they need. With Middesk, what ordinarily would have taken us hours to do is now taking us minutes. We take pride in partnering with technology companies that help us serve our customers better.”
How Novo redefines its KYB process with Middesk’s verification product
“Middesk's market-leading methods challenge the established legacy approach to verification. Their product has unlocked significant efficiency, enhancing the onboarding experience for small businesses to access Novo. Middesk’s ground-up approach to product development played an integral part in increasing confidence in KYB, both internally and with partners.”
Driving team efficiency and performance with Clearco
“Middesk's Lien Search product has allowed my team to focus on value-add activities like making deals rather than tedious tasks like sifting through UCC portals. My team is faster and happier with getting business owners the capital they need to grow their businesses.”
Leveling up Plaid’s onboarding process with seamless KYB
“When a customer signs up for Plaid, they want to start building on our APIs right away. Middesk has been a critical partner enabling us to quickly and seamlessly onboard new customers.”
Frequently Asked Questions about perpetual KYB
Perpetual KYB is absolutely essential to perform for any business operating in regulated industries like finance, banking, lending, or anything else that has specific regulations that require businesses to perform KYB checks on their customers to ensure they are legitimate.
Anti-money laundering (AML) regulations come with strict and swift penalties, and lack of knowledge about what your customers were doing is not an excuse for not complying. The best way to ensure you remain compliant after onboarding is including perpetual KYB as part of your overall KYB process.
To keep yourself in compliance, some of the most important data points you’d want to check periodically for KYB would include whether your customer has filed for bankruptcy, if your customer has had a new UCC liens filed against them, or a previously open one has been terminated, if the business ends up on any kind of Watchlist or Sanctions List (like OFAC), if there’s been a change in any aspect of the the business’ registration through the SOS registries, including an address, name, or person change, or if a previously unmatched TIN has now been found for the business
Middesk sources its data from both authoritative data sources and alternative data sources, because we believe the combination of both is the best way to take a risk-based approach to customer onboarding.
Some of our authoritative data sources include: Secretary of State filings, Employer Identification Numbers (EINs) & Tax Identification Numbers (TINs), Business licenses, Tax status verifications, and UBO (ultimate beneficial ownership) declarations, where required.
And when it comes to alternative data, we also focus on: website presence and metadata, social media and directory listings, business email or phone number consistency, IP address behavior, and online reviews or press mentions.
Of course you can. And if you’ve only onboarded a handful of new businesses and have internal resources to manually search the SOS state registries, IRS, Watchlists, bankruptcy databases, and lien databases (all separate databases) for every business you’ve onboarded every 2 weeks, then manual searches might work for you.
If you need something that works a little better at scale and automates perpetual KYB, you need an ongoing KYB tool that can automatically check all these databases on a cadence for you to let you know if the status changes. A tool saves a lot of time, and typically, a lot of money through how many internal resources are needed compared to doing manual checks.
If you’re relying on manual checks, you also might have to ask your customers for this information. If you’re relying on your customers to make sure you are the first person they tell that they filed for bankruptcy, you might be way too late to take the necessary action to keep your business compliant.
Middesk’s Ongoing Monitoring is an add-on subscription to our business verification software, so if you’re already a Middesk customer, it could take less than a few minutes.
As an existing customer, you can get set up any of the following ways: (1) Manually - using the Middesk Dashboard to toggle Monitoring on for a business you set up; (2) Programmatically - using the Middesk API to create, update, and delete business Monitors; (3) Policy Action - set up a custom Policy Action to subscribe businesses when certain conditions are met.
If you’re not a Middesk customer yet, speak to our sales team to learn what tools you would need and set up a personalized demo to see what aspects of business verification (including perpetual KYB) that Middesk can help you.
Implementation can take as little as a few hours depending on your current compliance or regtech stack, and adding Middesk into your KYB process can help you remain compliant, and keep your business away from the risks of working with businesses that become illegitimate after you onboard them.
Achieve perpetual KYB through Middesk Ongoing Monitoring
Get started by adding Ongoing Monitoring to your plan today
