This glossary explains the terms that come up when a bank, payments company or fintech reviews a business customer: KYB and onboarding, beneficial ownership and control, the documents companies file, screening, and the fraud patterns that hide behind legal entities. Each entry starts with a one-sentence definition, then covers why the term matters in a KYB review, what an analyst actually checks, and the pitfalls that lead to weak files. Where an entry makes a regulatory statement, such as the US Customer Due Diligence rule or OFAC's 50 percent rule, it links to the primary source and the date we read it. Entries are written for compliance, onboarding and fraud operations teams by Sweat AI, an AI-native BPO for banks and fintechs.
- 25% ownership thresholdThe 25% ownership threshold is the point at which an owner must be identified as a beneficial owner under the US CDD rule. Here is how to apply it.
- Adverse media screeningAdverse media screening searches news and public records for negative information on a customer and its owners. How analysts judge relevance and noise.
- Alert escalationAlert escalation passes a screening, fraud or monitoring alert to a senior reviewer or the SAR team. What to escalate, what to include, and the SAR clock.
- Articles of incorporation / organizationArticles of incorporation (corporations) and articles of organization (LLCs) are the filings that create a company. Here is what they prove in KYB review.
- Banking as a serviceBanking as a service (BaaS) lets non-banks offer bank products through a partner bank. How the model splits KYB work and where compliance gaps appear.
- Business onboarding reviewA business onboarding review is the analyst check of a business applicant's identity, ownership, activity and risk before an account is approved.
- Business verification documentsBusiness verification documents are the records used to prove a company exists, who owns and runs it, and what it does. Here is what each one proves.
- Certificate of good standingA certificate of good standing confirms a company exists and is current with its registry on the date issued. Here is what it does and does not prove.
- Control personA control person is the individual with significant responsibility to control, manage or direct a business customer, such as a CEO or managing member.
- Customer due diligenceCustomer due diligence (CDD) identifies a customer, its owners and the purpose of the relationship. The US rule, 2026 changes, and what analysts check.
- EIN confirmation letter (CP 575 / 147C)The CP 575 notice and Letter 147C are the IRS documents that confirm a business's EIN. Here is what each one proves in KYB review and how fakes show up.
- Enhanced due diligenceEnhanced due diligence (EDD) is the deeper review applied to higher-risk customers. What triggers it, what an EDD file holds, and where reviews go wrong.
- Evidence packetAn evidence packet is the case file that ties every KYB finding to the source it came from, when it was captured and what it cannot establish.
- False positive (screening)A screening false positive is an alert that flags a customer as a possible sanctions, PEP or adverse media match when it is not. How to clear it well.
- Four-eyes reviewFour-eyes review means a second qualified person checks a decision before it takes effect. Here is how it works in KYB and how to keep it meaningful.
- High-risk business categoriesHigh-risk business categories are business types that banks and card networks subject to extra scrutiny. What drives the label and what analysts check.
- KYB (Know Your Business)KYB, or Know Your Business, is how a bank or fintech verifies a business customer, its owners and controllers before and after it opens an account.
- KYB manual review queueThe KYB manual review queue holds business applications that automated checks could not clear and that need an analyst to review, request or decide.
- KYB refreshA KYB refresh re-verifies an existing business customer's details, ownership and risk profile. Here is what triggers one and what an analyst re-checks.
- KYB vs KYCKYC verifies an individual customer; KYB verifies a business, its documents, its owners and its controllers. Here is where the two overlap and differ.
- MCC misclassificationMCC misclassification is when a merchant is assigned a category code that does not describe what it actually sells. Why it matters and what analysts check.
- Money services businessA money services business (MSB) is a FinCEN-defined category covering money transmitters, check cashers and currency dealers. What KYB analysts check.
- Nominee directorA nominee director is a director who holds the post on behalf of someone else. Here is why that matters for KYB review and what analysts look for.
- OFAC 50 Percent RuleOFAC's 50 Percent Rule treats an entity owned 50% or more in aggregate by blocked persons as blocked, listed or not. How analysts apply it in KYB review.
- OFAC SDN listThe OFAC SDN list names people and companies whose US assets are blocked. How screening against it works in KYB, and where name-only screening falls short.
- Onboarding SLAAn onboarding SLA is the service-level target for how fast a business application is reviewed and decided. How to define one that compliance can defend.
- Operating agreementAn LLC operating agreement sets out members, ownership and management. It is often the main ownership evidence in KYB, and it is private and self-reported.
- Partner-bank due diligencePartner-bank due diligence is the review a bank performs before and during a fintech partnership. What banks ask for and how fintechs prepare for it.
- Payment facilitatorA payment facilitator (PayFac) signs and settles sub-merchants on behalf of an acquirer. What the PayFac is responsible for and what KYB analysts check.
- Periodic review (perpetual KYB)Periodic review re-checks business customers on a schedule; perpetual KYB re-checks them when something changes. Here is how the two approaches compare.
- Politically exposed personA politically exposed person (PEP) holds or held a prominent public function. How US agencies and FATF treat PEPs, and how analysts assess PEP risk in KYB.
- Registered agent addressA registered agent address is where a company accepts legal service. It is often a formation agent's office, so it rarely proves where a business operates.
- Request for information (RFI)In KYB, a request for information (RFI) is the message asking a business applicant for missing documents or explanations before a review can finish.
- Shelf company vs shell companyA shelf company is an aged entity bought ready-made; a shell company has little real activity. Both can be legitimate, and both change a KYB review.
- Source of funds vs source of wealthSource of funds is where the money in an account or transaction comes from; source of wealth is how the owner built their assets. How analysts verify each.
- Sponsor bankA sponsor bank is the chartered bank that holds the license behind a fintech's accounts, cards or payments. What it expects from the fintech's KYB program.
- Sub-merchantA sub-merchant accepts card payments through a payment facilitator instead of its own merchant account. What analysts check when onboarding one.
- Transaction launderingTransaction laundering is when an illicit business takes card payments through a front merchant that looks legitimate. Red flags and what analysts check.
- Travel ruleThe travel rule requires institutions to send sender and recipient details with funds transfers. The US rule, FATF R.16, and what KYB analysts check.
- Ultimate beneficial ownerAn ultimate beneficial owner (UBO) is the natural person who ultimately owns or controls a business. Here is how KYB analysts identify and verify them.