Voice of the Industry

Everyone is a business – navigating the evolving landscape of identity verification

Thursday 13 June 2024 10:21 CET | Editor: Raluca Ochiana | Voice of the industry

In a world where KYB and KYC lines blur, Jason Howard, CEO of Caf, explains how progressive profiling ensures seamless onboarding, fraud prevention, and compliance.


In the realm of identity verification, the distinction between Know Your Business (KYB) and Know Your Customer (KYC) has traditionally been clear-cut. KYB focuses on verifying the identity of corporate entities, while KYC is centred around authenticating individual customers. However, the two realms are becoming increasingly blurred. One big reason for this is the drastic rise of online marketplaces and the platform economy. In many ways, the digital world has become one big marketplace. Consumers no longer simply go to one website or another to purchase goods and services, but in marketplaces that facilitate shopping from many different sources. These are also forums where people share information and interact with one another in a digital environment and often transact with other consumers, not just businesses. 

These platforms have added great convenience to the modern digital economy, but if they are to work properly, trust must be paramount. In a platform world where every person is potentially a business, the lines between KYB and KYC and the nature of who and what is a business become increasingly hard to define. Platforms that facilitate these transactions must have stringent identity verification protocols in place, given the modern environment where everyone can potentially be a business. At the same time, they must also ensure that they are complying with all relevant payments and data regulations across the globe. Regulatory requirements will only continue to evolve, placing greater emphasis on comprehensive due diligence and risk management practices. Regulators are increasingly scrutinising the integrity of business relationships and the transparency of corporate structures, necessitating a more holistic approach to identity verification. 

Moreover, the rise of decentralised finance (DeFi) and blockchain technology is further blurring the lines between KYB and KYC. Blockchain-based identity solutions offer decentralised and immutable methods for verifying identities, enabling secure and transparent transactions without relying on traditional intermediaries. As blockchain ecosystems continue to mature, businesses are exploring innovative approaches to identity verification that transcend traditional boundaries and facilitate seamless interactions in the digital economy. All of this innovation has brought a great deal of convenience to online commerce, but it has also introduced its own set of fraud and cybercrime risks and the need to have strong onboarding and authentication controls in place.

The power of progressive profiling 

In this new world, to strike the right balance between maintaining a good user experience and seamless onboarding process and fighting fraud and being compliant, the need for progressive profiling is paramount. This strategy involves incrementally collecting information from users as needed, only requesting detailed information as necessary. 

Progressive profiling enables a better customer experience, due to its streamlined approach to collecting user information, thus leading to less abandonment and quicker time to revenue. 

It is also conducive to greater regulatory compliance. By collecting only the necessary information required for specific transactions or interactions, businesses can minimise the amount of sensitive data stored, reducing the risk of non-compliance with privacy laws. Additionally, progressive profiling allows users to control the information they share, enhancing transparency and accountability in data processing practices. 

Progressive profiling also enables businesses to analyse user behaviour patterns and detect anomalies that may indicate potential fraudulent activity. By monitoring changes in user behaviour, such as sudden spikes in account activity or unusual transaction patterns, organisations can flag suspicious behaviour and take proactive measures to prevent fraud. This approach also enables digital businesses to adapt and tailor authentication methods based on the potential risk of each user. This not only enhances security but also enables more personalised user journeys. 

Ultimately, progressive profiling improves the user experience and increases onboarding rates while enabling companies to detect and stop fraudulent activity. 

The future of identity verification 

The notion of identity in the digital world is constantly changing. We all interact with businesses, with marketplaces, with platforms and with each other in the online realm in vastly different ways. Your digital identity on one platform may be different than what it is on another. 

This becomes especially true as we transition further into a Web3 world. Web3 can be described as a decentralised, user-centric, and interconnected concept of the internet that leverages distributed systems to redefine how we interact, share information, and conduct online transactions. In Web3, data is distributed and controlled by users in a network using decentralised technologies such as blockchain and peer-to-peer networks. 

That’s why we believe the future of digital identity will be decentralised. This approach aims to establish limits on the dissemination of personal information on the internet. Additionally, it benefits consumers by simplifying the authentication process, eliminating the need for repeated verifications when accessing different platforms. Decentralised identity not only strengthens digital security but also enhances the user experience in an increasingly connected landscape.

This editorial was initially published in the Emerging Technologies and Trends in Identity Verification, KYC, and KYB Report 2024. The report dives into the latest practices and technologies that enable financial institutions and regulated entities to reduce fraud, build trust, navigate evolving regulatory and compliance requirements, and cut operational costs. You can download your free copy here

About Jason Howard


Jason Howard is the CEO of Caf and a longtime identity industry executive. Prior to Caf, Jason served in the leadership team at Ethoca, the world's first collaborative fraud prevention network, which was acquired by Mastercard, where he was responsible for driving global revenue growth and customer success. 



About Caf

Caf is a leading provider of end-to-end identity verification, proofing and authentication solutions. Founded in 2019, Caf has rapidly grown and is trusted by hundreds of leading customers across financial services, fintech, ecommerce, technology platforms, sports betting and more to engage and authenticate their customers accurately.

Caf’s Innovative Know Your Everything (KYE) platform combines advanced computer vision ML models, an AI-powered decisions engine, and sophisticated identity orchestration with an extensive collection of biometrics and identity databases. Caf’s platform delivers automated customer onboarding, KYC, KYB, fraud prevention, authentication, and document verification/background check solutions.

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Keywords: KYC, KYB, identity verification, digitalisation, DeFi, cybercrime, blockchain, digital onboarding, compliance, web3
Categories: Fraud & Financial Crime
Companies: CAF
Countries: World
This article is part of category

Fraud & Financial Crime


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