Know Your Business (KYB) is the crucial first touchpoint for any B2B business in financial services. First impressions count, and a clunky, slow business onboarding process directly leads to customer churn and lost revenue.

Beyond customer experience, KYB is also an important compliance and fraud prevention measure. Not only do you have to do it before offering accounts and financial services, but getting it wrong can have enormous consequences.

Each year, criminals launder between $800 billion and $2 trillion, and an estimated 80% of those funds are funneled through legitimate-looking business fronts. This is why it is critically important for banks, fintechs and financial services providers to conduct thorough KYB checks.

So, how do you balance this trade-off?

As with most things in fraud and compliance, the solution is better data. Better data drives  automation and opens the door for AI Agents to unblock good customers sitting in your onboarding queues.

Our mission at Sardine is to lighten this load. Here’s how better data, and AI-powered automation create a smoother KYB experience for your customers.

Evolving KYB requirements demand better solutions 

KYB requirements have ramped up significantly over the decades. 

Today, with initiatives like the Corporate Transparency Act in the U.S. and the EU’s AML Directives, businesses face stricter obligations to verify Ultimate Beneficial Ownership (UBO), monitor high-risk activity, and report inconsistencies.

The challenge isn't just meeting compliance requirements. It's doing that while keeping your onboarding flow competitive. KYB cannot remain a series of disconnected checks that slow business growth. Instead, it needs to evolve into an optimized, data-driven process, that can balance both the rigorous checks with customer’s expectations that everything should be frictionless on the internet.

Modernizing the KYB process

What we call KYB often involves multiple steps. Some of these can be automated, or are available through modern APIs (like Sardine), but the industry norm is still for many of these to be manual.

1. Business legitimacy

• Challenge: Manual cross-referencing of government databases and business registries is slow and error-prone.
  
  
• Modern Approach: Integrated data sources available as a simple API call through connections to numerous government and third-party data sources, including enhanced UBO screening.

2. Beneficial ownership

• Challenge: Standard PEP and sanctions checks produce high false positive rates that create unnecessary review queues.
  
  
• Modern Approach: Direct KYC capabilities for digital onboarding that pull additional data from PEPs and adverse media screening. These are often prone to high false positive ratios from underlying databases, which is an area you can improve with AI agents that screen sanctions and PEPs alerts. More on that later in the piece.

3. Nature of the business

• Challenge: Verifying actual business activities can be difficult, requiring your team to manually check websites, documents or request additional information from a customer. All of which can delay onboarding. Traditionally, banks would have a human agent request each of these documents and perform the verification.
  
  
• Modern Approach: Using AI agents to analyze websites and product listings for accurate industry classification, scan social media and online reviews for reputation issues, and verify business legitimacy through domain age checks and financial document analysis (bank statements, tax forms, invoices) - automating what previously required extensive manual investigation.

How Sardine Enhances KYB Processes

Sardine performs all the traditional KYB checks with high-fidelity data sources, ensuring accuracy and compliance.

All these capabilities are available via API, in real-time and fully automated. We provide out-of-the-box rules that can be customized to suit your risk appetite and compliance policies. Beyond the standard KYB data checks, here's how our specialized AI Agents transform the process:

1. Merchant Risk AI Agents

These agents tackle the "nature of business" verification challenge by analyzing multiple data dimensions simultaneously:

• True industry verification to detect miscategorized merchants.
• Web presence monitoring for legitimacy signals and customer sentiment.
• Risky industry analysis to identify merchants with risky or prohibited businesses.
• Product tag analysis to confirm what merchants are actually selling.
• Proprietary card spend data to verify card volume claims during onboarding.
• Revenue and chargeback analysis to surface a merchant’s historical risk profile.
• Graph-based insights to expose attacks like multiple applications from the same user.
• 1000s of pre-built rules for logical reasoning, which slashes false positives.
• Workflow builder to automate merchant onboarding steps.

Sardine also continuously monitors merchants (and their beneficial owners), so you can track how their risk profile evolves and catch early signs of potential scams.

2. Onboarding KYC Agents

Often users get “stuck in a queue” if they have a match to government or industry watchlist. This can be a case of mistaken identity up to 95% of the time. To unblock these users, Sardine offers step-up-KYC agents that:

• Can review documentary KYC data in Sardine’s secure platform
• Review all device and behavior signals seen during user onboarding
• Check for cultural variations or nicknames, because foreign passports, nicknames or small variations can often trip up standard checks
• Review third-party databases such as telco, email and bank consortia
• Form a recommendation (e.g. is a false positive) and present this to the human agent for review

This AI Agent is trained on your Standard Operating Procedures (SOPs), and in real-world testing has correctly identified 100% of false positives for Sardine's clients.

3. Sanctions / PEPs AI Agents

Common names like “John Doe” or “David Johnson”  often trigger false flags, delaying onboarding. Sardine’s AI ensures legitimate users are not stuck in manual review queues. Our AI Agent can automate the previously manual steps.

• Documentary KYC checks: Match the name, address, and date of birth as provided at onboarding against the name on a document
• Terms of use checks: Ensure the customer’s age follows their Terms of Use
• Translations: Translate the names from foreign languages to English when needed,
• Check addresses: Match the state and addresses for the customer against the hits to ensure this is the same individual
• Corroborate with supplementary evidence: e.g. articles about the PEP or adverse media articles to see if the articles are indeed referencing the same person

In testing a Sardine client doubled the speed they could work many sanctions cases. 55% of cases could be worked in less than 30 seconds (down from ~5 to 10 minutes). This means more time to focus on the harder cases.

Download our whitepaper to learn more about how to safely deploy AI agents in production.

Embracing a more modern KYB experience

False positives don't have to be a cost of doing business. This mindset shift alone can transform how you approach compliance. By collecting more data, in a more automated and timely manner, you can have greater confidence in your onboarding pipeline while dramatically reducing those frustrating false flags that slow everything down.

Sure, KYB is a necessity and at the end of the day, the important thing for compliance is ensuring you're meeting your regulatory requirements. But you can have your cake and eat it too. With the right tools in place, your KYB process can become a competitive advantage. 

What does this advantage look like in practice? With AI Agents handling the complex decision-making, you can get users activated as customers much faster. Your business grows while you and your bank partners avoid exposure to financial crime, regulatory fines, and the reputational damage that follows.

Inevitably, the future of KYB lies in the blend of both artificial and human intelligence. If you're ready to take that journey, Sardine is just a few clicks away.