Vendor KYC Verification: Verify Your Vendors Quickly and Easily!
January 27, 2023
7 minutes read
The logistics and supply management industry have rapidly evolved over the last decade. With more complex delivery chains, stricter regulations, and a more significant focus on security, it’s no wonder that businesses are looking for ways to speed up processes and improve efficiency. One of the most important steps in this process is vendor KYC (Know Your Customer) verification. This step ensures that businesses know who they are dealing with regarding vendors and suppliers. In this blog post, we will discuss what Vendor KYC Verification is and how it impacts logistics and supply chain management.
Businesses that engage suppliers to provide goods or services can quickly become victims of Vendor Impersonation Fraud. Sophisticated criminals infiltrate a trusted vendor or somebody pretending to be them, thereby risking your business. Armorblox’s research team discovered a 73% increase in financial fraud email threats from 2021 to 2022. Financial fraud attacks accounted for 44% of sophisticated, targeted crimes, including wire fraud, invoice fraud, and vendor fraud.
What is Vendor KYC Verification?
Vendor KYC verification is verifying the identity and credentials of a vendor or supplier. This verification can be done through various means, such as third-party background checks, references, and documentation. Vendor KYC verification aims to ensure that the vendor is who they say they are and that they have the experience and credentials necessary to provide the services or products they claim to offer.
Third-party background checks are one of the most common methods of vendor KYC verification. This check can be conducted by an outside firm or the company itself. References are another standard method of vendor KYC verification. When checking references, it is important to verify that they are from legitimate sources, such as past clients or business partners. Documentation is also often used for vendor KYC verification. This may include identification documents, licenses, certifications, and other forms of proof that the vendor is qualified to do business with your company.
Vendor KYC verification is important in doing business with new suppliers or vendors. Verifying their identity and credentials can help protect your company from fraud or scams.
Why is Vendor KYC Verification important in logistics & supply management?
There are many reasons why vendor KYC verification is important in logistics and supply management.
- It helps to ensure that the vendor is who they say they are and that they are legitimate. This can help to prevent fraud and other issues.Â
- It helps to ensure that the vendor has the proper licenses and permits for their business. This can help to avoid delays or other problems with shipments.Â
- It can help build trust between the company and the vendor, leading to better relationships and more efficient operations.
A first layer of protection for companies comes from supply chain risk management and due diligence, and due to the rise of SaaS and outsourcing, good risk awareness is essential. The Global Fraud and Risk Report, “Mapping the New Risk Landscape, “published by Kroll in conjunction with Forrester Consulting in 2019, highlights global corporations’ biggest risks.
Globally, 28% of fraud was committed by external parties (suppliers & vendors), an increase of 10%. 68% of global companies consider fraud by external parties a high or significant concern.
According to KPMG’s Global Banking Fraud Survey, released in May 2019: Fraud recoveries were less than 25% of fraud losses, according to over half of the survey respondents. This low rate emphasizes the importance of prediction and prevention.Â
Thus, companies should begin to consider implementing a tool and necessary workflows as vendor fraud grows in prevalence as a threat to many corporations.
The benefits of Vendor KYC Verification
KYC verification is a process that helps to ensure that your customers are who they say they are. This can be beneficial for several reasons:
- It helps to prevent fraud: By verifying the identity of your customers, you can help to prevent fraudulent activity. It becomes much harder for someone to commit fraud if they have to provide their real identity upfront.
- It builds trust: Customers who have been through a KYC verification process are more likely to trust your company. This is because they know that you take security and compliance seriously.
- It streamlines processes: A KYC verification process can help streamline other business processes, such as onboarding new customers or processing payments.
How Can Signzy Help with Vendor KYC Verification?
Signzy has a one-stop solution when it comes to verification. It provides a simple plug-and-play API solution. With just the vehicle number, you can get fitness details, Permit info, PUCC check, Insurance details, and much more! The same goes for authenticating the driver’s license.
Signzy can provide a complete user journey and simplify your workflow while it is automated. A generic survey conducted by logistic partners and Signzy showed that automated workflow helped the logistic industry by 26%, which earlier with the manual process was 11%.Â
Our three APIs that play a pivotal role in Vendor KYC Verification are:
Bank Account Verification API: With it, you can verify not just the validity of bank accounts but also the name and details of the user while leveraging the right technology for the job. In addition, the AI-driven API is highly customizable and can be integrated easily with your processes.
RC Verification API: Signzy’s Registration Certificate Verification Process allows onboarding of verified vehicles in no time with utmost accuracy & reliability (server providing 99.9% uptime). Know more about the benefits it offers.Â
GST Verification API: Our GST API validates the authenticity of a business or your partner as an essential aspect of easing and making GST compliances hassle-free. It helps you to
- Extract GST details, including Name, GSTIN, and address of the business, from the GST certificate.
- Search GST details of the entity using GSTIN and PAN.Â
- View and track the GST returns of the entity.
Conclusion
Vendor KYC verification is essential to logistics and supply chain management. It helps to ensure the accuracy and reliability of the information, making it easier for businesses to monitor their vendors and ensure they comply with all applicable regulations. As a result, organizations can protect themselves from potential liability by implementing a comprehensive vendor KYC verification process while improving transparency across their supply chains.
We bring you to speed, security, reliability & ease. You can leverage artificial intelligence, optical character recognition, and other best-of-breed technologies – everything you need to scale successfully.
About Signzy
Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs, easily added to any workflow with simple widgets.
Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.
Visit www.signzy.com for more information about us.
You can reach out to our team at reachout@signzy.com
