KYC verifies a person; KYB verifies a business and its owners. See how KYC and KYB differ, how they work together, and when you need each in onboarding.
Table of contents
- KYC verifies a person and KYB verifies a business, but the two are connected: KYB resolves who owns a company, and each of those owners then needs KYC.
- KYC confirms an individual's identity with documents, chip reads and liveness; KYB confirms a company is real and maps its ownership to the ultimate beneficial owners.
- KYB is usually the harder problem, because a business has a structure that can hide real ownership across holding companies and jurisdictions.
- Firms that onboard businesses need both processes, run together, so verifying a company automatically triggers verification of the people behind it.
- Both share the same foundations: verify against reliable sources, screen for sanctions and PEP risk, keep records, and monitor over time.
- Choosing tooling that does KYC and KYB in one flow avoids the gaps and duplicated work of stitching separate systems together.
KYC and KYB are complementary verification processes: KYC, Know Your Customer, verifies that an individual is who they claim to be, while KYB, Know Your Business, verifies that a company is legally registered and identifies the ultimate beneficial owners who control it. Resolving a company's ownership surfaces individuals who each then require KYC.
TL;DR
KYC verifies a person; KYB verifies a business and then identifies the people who ultimately own it, each of whom needs KYC. So the two are not alternatives but partners: a firm onboarding companies needs both processes, run together, so verifying an entity automatically triggers verification of its beneficial owners. KYB is usually harder because ownership hides across holding companies and jurisdictions. Both rest on the same foundations, verify against reliable sources, screen for sanctions and PEP risk, keep records, and monitor over time, which is why doing them in one flow beats stitching separate systems together.
What is the difference between KYC and KYB?
The core difference is the subject. KYC, Know Your Customer, verifies an individual: it confirms that a person is who they claim to be. KYB, Know Your Business, verifies an organisation: it confirms that a company is genuine and legally registered, and it identifies the people who ultimately own or control it. In one line, KYC is about a person and KYB is about a company and the people behind it.
But the difference is not a clean either-or, because the two meet in the middle. A KYB check does not stop at the company; it resolves the ownership to find the ultimate beneficial owners, and each of those owners is a person who then needs KYC. So KYB contains KYC within it. That is why treating the two as separate, unrelated processes causes problems, and why understanding how they relate, rather than just how they differ, is what actually matters for onboarding. For the fuller picture of each, see our guides to KYC software and what KYB is.
What is KYC?
KYC, Know Your Customer, is the process of verifying an individual's identity and assessing their risk before and during a relationship. It confirms that a person is real and is who they say they are, typically by checking an identity document, increasingly by reading the document's chip, and by confirming with a liveness check that a live person is present and matches the document. It then screens the individual against sanctions and politically exposed person data.
KYC is the familiar half of onboarding for consumer-facing products: the flow a person completes when opening an account or signing up to a regulated service. It is required by anti-money-laundering law, which obliges firms to identify and verify customers using reliable, independent sources and to keep records. Modern KYC is electronic and remote, and the strongest implementations resist fraud with chip reads and layered liveness rather than relying on an uploaded photo, the standard we describe across our identity verification guidance.
What is KYB?
KYB, Know Your Business, is the process of verifying a company and identifying the people who ultimately own or control it. It confirms the entity's registration, status and licences against official registries, resolves the ownership structure to find the ultimate beneficial owners, generally those holding 25 percent or more, and screens the business and those owners against sanctions, PEP and adverse-media data.
KYB is the harder half of the job, because a company is a structure rather than a single subject. Resolving ownership can mean traversing a chain of holding companies across several jurisdictions to reach the natural people at the end, and that ownership is sometimes deliberately obscured. A KYB check therefore often produces several individuals to verify, which is exactly where it hands back to KYC. It is required for any regulated firm onboarding businesses, and doing it well depends on broad registry coverage and recursive ownership resolution, the substance of KYB verification.
How do KYC and KYB work together?
The two processes work together as one connected process rather than two separate ones. When a firm onboards a business, KYB verifies the entity and resolves its ownership to the ultimate beneficial owners. Each of those owners is then a person who must be verified, which is a KYC task. So a single business onboarding runs KYB to find the people and KYC to verify them, and the two are only artificially separable.
This is why running the two processes in one flow is so much better than bolting separate systems together. If the company check and the individual checks live in different tools, the handoff between them, resolving an owner in one system and verifying them in another, is where data is lost, work is duplicated, and gaps appear. A unified flow verifies the entity, surfaces the owners, and verifies each of them without a manual bridge, producing one coherent, auditable record for the whole relationship, the kind of connected trail an audit-ready compliance stack depends on.
When do you need KYC vs KYB?
You need KYC whenever your customer is an individual, and KYB whenever your customer is a business, and both whenever a business customer has human owners to verify, which is almost always. A consumer fintech onboarding individual users primarily needs KYC. A B2B platform, business bank, or payment provider onboarding companies needs KYB, and through it, KYC for the beneficial owners it uncovers.
In practice most regulated firms that serve any business customers need both. A marketplace onboarding both consumer buyers and business sellers runs KYC on the individuals and KYB on the businesses. A bank runs KYC on personal-account customers and KYB on corporate ones. The question is rarely KYC versus KYB in the sense of choosing one; it is which applies to a given customer, and how to run both cleanly when a business customer requires each. That is why the tooling decision usually comes down to a platform that does the two processes together rather than two point solutions, so business verification and individual verification are one system.
What do KYC and KYB have in common?
For all their differences, the two processes share the same foundations. Both require verifying against reliable, independent sources: documents and chip reads for people, official registries for companies. Both require screening against sanctions, politically exposed person and adverse-media data. Both require keeping records sufficient to reconstruct the verification for a regulator. And both require ongoing monitoring rather than a one-time check, because a person's or a company's risk can change after onboarding.
They also share the same underlying purpose: to stop financial crime entering the system by knowing who you are really dealing with. And they face the same core tension between thoroughness and friction, since checks that are too heavy lose legitimate customers while checks that are too light let bad actors through. Because they share so much, the same design principles, automation, minimal data retention, chip-based verification and continuous monitoring, improve both, which is another reason to treat the two processes as one capability rather than two, built on shared decentralised KYC infrastructure.
How does Zyphe handle both processes?
Zyphe runs the two processes as a single, connected flow. For businesses, entity verification draws on more than 230 EU registries and coverage across 190 countries, and ownership resolution is recursive, tracing layered structures to the ultimate beneficial owners down to a 0.001 percent stake. For each of those owners, and for individual customers, KYC runs through chip-based identity verification to the ICAO 9303 and eIDAS standards, with two-step liveness and no image upload.
Because it is one platform, resolving a company's ownership flows straight into verifying the people it surfaces, with no manual bridge and no gap between the business check and the individual checks. The business and every person are screened against sanctions, PEP and adverse-media data, monitoring continues after onboarding, and the whole assessment is captured in an exportable audit trail. And because the platform is decentralised, the data gathered across both processes is sharded rather than pooled, so a unified verification never creates a central honeypot. The result is one system for KYB software and individual verification alike. Book a demo to see both in one flow.
The bottom line
KYC versus KYB is the wrong framing: they are not competitors but two halves of the same job. KYC verifies a person, KYB verifies a company and then hands you the people to verify, so any firm onboarding businesses needs both, and needs them connected. KYB is the harder half because ownership hides in structure, but both rest on the same foundations of reliable-source verification, screening, record-keeping and monitoring. The practical takeaway is to run the two processes as one flow on one platform, so resolving a business feeds straight into verifying its owners and you get a single, defensible record instead of a gap between two systems.
Related resources
- What is KYB (Know Your Business)?
- KYB verification: how it works
- KYC Software: 2026 Buyer's Guide
- KYB software
- Zyphe decentralised KYC
Cited sources
Michelangelo Frigo (Co-Founder at Zyphe) Michelangelo Frigo is a privacy and identity infrastructure expert and co-founder of Zyphe.