Every day, South African businesses enter into transactions, credit arrangements, and commercial relationships with other companies — often with limited insight into who is actually behind the entity they are dealing with. In an economic environment where South Africa ranked among the top five countries for cybercrime density in 2024 and where synthetic identity fraud increased by 153% in a single year, conducting due diligence on business partners is no longer optional. It is essential.
Know Your Business (KYB) is the framework of identity verification and due diligence checks that empowers businesses to verify the legitimacy of the companies, institutions, and organisations they deal with — before those relationships create exposure. This guide explains what KYB is, how it differs from KYC, what checks it involves, and why it is a legal obligation for a wide range of South African businesses.
What is Know Your Business (KYB)?
Know Your Business (KYB) refers to the set of identity verification and due diligence checks that are conducted on businesses, institutions, and organisations — rather than on individual customers. Where KYC procedures are applied to natural persons, KYB procedures are applied to juristic entities such as companies, trusts, close corporations, and non-governmental organisations.
KYB checks establish and verify important information about a business entity — including its structure, ownership, registration status, financial standing, and risk profile. By verifying this information, a business can confirm that a commercial partner is legitimate, that its owners are not concealing their identity for illegitimate purposes, and that the entity does not pose a financial crime or regulatory risk.
What is the Difference Between KYB and KYC?
Know Your Business and Know Your Customer are closely related concepts, and understanding the distinction between them is important. KYC is a broad term that refers to the procedures and mechanisms used to verify the identity of customers — typically individual persons — before conducting business with them. As such, KYC can be used as a general term that encompasses KYB. For a comprehensive explanation of KYC and its regulatory implications, refer to our detailed guide: What is KYC? Know Your Customer Explained for South African Businesses.
KYB, by contrast, is a specific term that refers exclusively to the due diligence checks applied to legal entities. It cannot be used interchangeably with KYC when referring to checks on individuals. Notwithstanding this distinction, KYB checks will frequently include elements of individual identity verification — for example, confirming the identity of a company's directors or Ultimate Beneficial Owners (UBOs) — thereby bridging both disciplines within a single due diligence workflow.
Why is KYB Necessary?
The case for KYB rests on two foundations: legal obligation and fraud prevention. In a rapidly escalating fraud environment, both are compelling.
From a fraud prevention standpoint, business identity fraud is among the fastest-growing threats facing South African companies. Fraudulent businesses employ increasingly sophisticated tactics to appear legitimate — from recently incorporated shell companies with fabricated registration details to BEC schemes in which criminals impersonate genuine suppliers to redirect payments. According to Sumsub's Identity Fraud Report 2024, 67% of businesses globally reported an increase in fraud, with 45% of companies falling victim to identity fraud — and South Africa was identified as one of the hardest-hit countries, with fraud rates surging by over 300% in 2024. Southern Africa's identity verification rejection rates more than doubled between 2023 and 2024, rising from 9% to 21%, according to Smile ID's 2025 Digital Identity Fraud in Africa Report.
From a regulatory standpoint, South African businesses designated as Accountable Institutions under FICA are legally obligated to conduct due diligence on the entities they do business with. KYB checks form a central component of that due diligence obligation — and failure to conduct them can result in serious regulatory consequences, including significant financial penalties and, in the most severe cases, criminal prosecution. For a full explanation of which businesses qualify as Accountable Institutions and what that designation requires, refer to our guide: What is an Accountable Institution? FICA Obligations Unpacked.
What Does a KYB Check Involve?
KYB encompasses a range of checks designed to verify the identity and legitimacy of a business entity and to confirm that it does not present a financial crime risk. The specific checks required will depend on the nature of the business relationship, the risk profile of the entity, and the regulatory obligations of the business conducting the check. The four core components of a comprehensive KYB check are as follows.
Business Registration Check (CIPC)
A business registration check verifies the legal existence and registration status of a company by cross-referencing the entity's details against the Companies and Intellectual Property Commission (CIPC) database — South Africa's authoritative source of company registration information.
A comprehensive business registration check returns the company's registration date, enterprise name, duration of registration, tax and VAT numbers, and all current and historical director details associated with the company registration number provided. This information allows a business to confirm that its commercial partner is a legitimately registered entity and to identify red flags — such as a very recently incorporated company, discrepancies in director information, or a dormant registration — that may indicate a fraudulent or high-risk entity.
Company Account Verification Services (AVS)
A company AVS check verifies the legitimacy of a business bank account by cross-referencing the account details provided against the banking records associated with the entity. A comprehensive company AVS check confirms the validity and active status of the account, returns the full account details and account type, and confirms the company name and company registration number linked to the account.
Company AVS is an important fraud prevention tool — and is in many cases a legal requirement under South Africa's AML/CFT framework. As with individual account verification, a recently opened company bank account is one of the most consistent indicators of fraud in a business context. By conducting an AVS check before authorising payment to a new or updated supplier account, a business can detect such red flags before funds are transferred. For a detailed explanation of how AVS works and the fraud types it prevents, refer to our guide: What is Bank AVS? How Account Verification Prevents Fraud.
Company Credit Report
A company credit report provides a detailed assessment of a business entity's financial health and creditworthiness. A comprehensive company credit report returns a credit summary of all associated directors, together with a calculated company risk score that takes multiple financial and behavioural factors into account to generate an accurate, data-driven picture of the entity's credit risk profile.
Company credit reports are an important tool for risk assessment across a range of business contexts — from evaluating a prospective borrower or credit applicant to assessing the financial stability of a new commercial partner. In many instances, Accountable Institutions in South Africa are legally required to conduct financial assessments of entities they engage with as part of their AML/CFT due diligence obligations.
Company Sanctions Check
A company sanctions check determines whether a business entity appears on any regulatory watchlists, sanctions registers, or adverse media sources — and whether any of its directors or associated persons are Politically Exposed Persons (PEPs) or have been identified as financial crime risks.
The consequences of conducting business with a sanctioned entity are serious. In many cases, doing so constitutes a breach of South African and international sanctions law — with regulatory penalties, substantial fines, and potential criminal liability as possible consequences. A company sanctions check guards against this risk by confirming, before any relationship or transaction is entered into, that the entity and its associated individuals are not subject to any sanctions, watchlist designations, or adverse media coverage that would make the relationship legally or reputationally untenable.
For a detailed explanation of sanctions screening, PEP checks, and adverse media screening as components of AML due diligence, refer to our guide: What is AML Screening? PEP, Sanctions & Adverse Media Explained.
Who Needs to Conduct KYB in South Africa?
Any South African business designated as an Accountable Institution under FICA is legally obligated to conduct due diligence on the entities it does business with — and KYB checks form a core component of that obligation. Accountable Institutions span a broad range of sectors, including banking, insurance, forex, payments, crypto asset services, iGaming, real estate, legal services, wealth management, and motor vehicle dealerships, among others.
Beyond legal obligation, many businesses that do not formally qualify as Accountable Institutions conduct KYB checks as a matter of sound commercial practice. In a fraud landscape as severe as South Africa's, the ability to verify the identity and legitimacy of a business partner before entering into a transaction or relationship is one of the most effective tools available for managing commercial risk.
KYB Within South Africa's Risk-Based Approach
South Africa applies a Risk-Based Approach (RBA) to its AML/CFT regulatory framework, which means that the scope and intensity of KYB obligations will vary depending on the risk profile of each Accountable Institution and its commercial partners. Each AI is required to develop a tailored Risk Management and Compliance Programme (RMCP), submit it to the Financial Intelligence Centre (FIC) for approval, and apply its KYB procedures in a manner proportionate to the risk assessed.
The RBA means that a high-risk financial institution dealing with complex corporate structures and high-value cross-border transactions will conduct substantially more intensive KYB checks than a smaller, lower-risk business. Regardless of the level of due diligence required, however, the underlying obligation — to know who you are doing business with — applies to all Accountable Institutions without exception.
Digital KYB Solutions for South African Businesses
Today, all KYB checks are available online and can be fully automated — enabling businesses to conduct comprehensive business verification in minutes rather than days. For businesses that process smaller volumes of KYB checks, ThisIsMe's Partners Platform provides cost-effective, flexible access to the full suite of KYB services on a subscription or pay-as-you-go basis. For businesses that require large-scale KYB processing, ThisIsMe's advanced API enables the seamless automation and integration of KYB checks directly into customer and partner onboarding workflows, removing manual administrative burden and freeing up valuable human resources.
KYB Solutions for South African Businesses
As South Africa's leading provider of world-class KYB, identity verification, and due diligence solutions, ThisIsMe gives businesses the tools they need to verify every entity they do business with — accurately, efficiently, and in full compliance with their FICA obligations. From CIPC business registration checks and company AVS to company credit reports and sanctions screening, our comprehensive KYB suite covers every dimension of business identity verification. To experience our full suite of KYB solutions and find out how we can serve your business, contact our team here.
