Know Your Customer (KYC) and Know Your Business (KYB) are verification processes used to confirm the identity of clients before entering into a business relationship. KYC applies to individuals, KYB applies to businesses. This is legally required under the Bank Secrecy Act, USA PATRIOT Act, and state regulations.
KYC (Individuals)
Required Information:
- Full legal name, date of birth, SSN/Tax ID
- Physical address, phone, email
- Government-issued photo ID
- Bank account verification
Verification includes:
- Identity document authentication
- OFAC sanctions list screening
- PEP (Politically Exposed Person) checks
- Adverse media screening
Hudson uses SoCure to verify new clients in 3-5 minutes - checking government databases, validating SSN matches name, confirming address legitimacy, and screening OFAC lists automatically.
KYB (Businesses)
Required Information:
- Legal business name, EIN, business type
- State of formation, physical address
- Ownership structure and beneficial owners (25%+ ownership)
- Business licenses for regulated industries
Verification includes:
- Secretary of State registration lookup
- KYC on all beneficial owners
- Industry license verification
- Business bank account confirmation
Why It Matters
- Legal Compliance - Avoid criminal penalties and civil fines
- Fraud Prevention - Stop money laundering and identity theft
- Banking Relationships - Banks require compliant partners
- Operational Protection - Prevent fraud costs and legal exposure
- Modern Approach: Automated platforms (SoCure, Plaid, ComplyAdvantage) verify identities in seconds, reducing manual work while improving accuracy and compliance.
