eKYB and Partner Risk Management: Enabling Financial Institutions to Scale Safely

Introduction

In the digital era, financial institutions face significant pressure to accelerate the expansion of their partner networks while ensuring security and regulatory compliance. Traditional verification of corporate legal status often consumes considerable time and resources, carrying risks of errors and regulatory breaches. In response, the electronic Know Your Business (eKYB) solution emerged as a breakthrough. By automating the process of data acquisition and verification, eKYB not only enhances accuracy but also reduces verification time from days to minutes. For banks and financial organizations, adopting eKYB is key to scaling partnerships safely and efficiently.

Challenges in Traditional Management Processes

Conventional corporate KYC procedures require companies to provide legal documents such as business registration certificates, financial statements, and legal representative contracts. Banks or institutions then manually verify these through paperwork and data lookup with government agencies. This method often takes several days or even weeks, generating high operational costs due to personnel and document storage infrastructure.

Legal risks increase because manual data handling is prone to errors, and counterfeit documents may not be detected promptly. As partner networks expand, stricter management demands grow, while financial institutions face competitive pressure to accelerate partnership approvals. Consequently, many banks must choose between speed and safety, causing delays and missed business opportunities.

Advantages of the eKYB Solution

The automated electronic business verification solution (eKYB) operates by connecting via API to government databases and reliable data sources. The process begins with partner companies uploading digital documents, followed by data extraction using Optical Character Recognition (OCR) technology. Subsequently, eKYB compares the information against data from business registration authorities and immediately alerts if any discrepancy arises.

In terms of processing speed, eKYB shortens verification time from an average of 3–5 days to 3–5 minutes, while ensuring accuracy up to 99.9%. Staff no longer have to manually check hundreds of documents, which reduces human error.

Regarding operational costs, automation decreases the need for additional personnel and investments in physical document storage. Furthermore, eKYB helps organizations comply with Anti–Money Laundering (AML) and Counter–Terrorism Financing (CTF) regulations by digitally recording and storing records, ready to provide reports to regulatory bodies.

The flexibility of eKYB is demonstrated by its easy scalability across diverse business types, including joint-stock companies, limited liability companies, and non-profit organizations. With a standard API interface, financial institutions only need a one-time integration to connect seamlessly with digital banking ecosystems, fintech, and other technology partners.

Partner Risk Management Combined with eKYB

Building a Risk Classification Matrix

Using authentication data from eKYB, financial institutions can categorize partners into three risk levels: high, medium, and low. Analysis criteria include financial indicators (profitability ratio, debt-to-equity ratio), legal history (administrative violations, legal disputes), and geographical location (regions with high fraud risk).

Continuous Monitoring

Unlike one-time checks, continuous monitoring enables real-time automatic updates of corporate data. Important changes such as shareholder structure modifications, office relocations, or new legal violations trigger immediate system alerts, helping prevent business risks and ensure compliance.

Approval and Periodic Reassessment Processes

Financial institutions need established detailed collaboration approval procedures paired with regular reassessment cycles (quarterly, annually). Upon risk alerts, response protocols such as temporarily suspending transactions, requesting additional verifications, or terminating cooperation must be implemented promptly, transparently, and in accordance with internal regulations.

Advanced Data Analytics Tools

Deploying AI/ML-integrated data analytics platforms allows forecasting of risk trends based on tens of thousands of corporate profiles. An intuitive dashboard presents risk ratios, detailed reports, and comparative charts among partner groups, supporting leadership in timely strategic decision-making.

Case study

VPBank faced challenges verifying corporate client identities, especially under the State Bank of Vietnam’s regulations such as Decision 2345/QĐ-NHNN on online payment security and Circular 17 regulating payment account opening and use at financial organizations. Manual verification processes previously took several days to one week, leading to errors and slower account opening.

To enhance efficiency and reduce verification time, VPBank adopted FPT eID’s eKYB solution - an electronic identity verification system leveraging advanced biometrics and high automation. This solution connects directly with national databases and integrates eKYC functionality to verify legal representatives.

The implementation of FPT eID’s eKYB solution delivered impressive results for VPBank:

• Corporate account opening time reduced from 1–2 days to only 5 minutes via mobile device, creating a significant competitive advantage

• Online registration completion shortened to 10 minutes

• Identity verification success rate exceeded 99%, minimizing data entry errors

• AI recognition technology automatically processed business registration certificates and citizen identification cards, alleviating manual data input

• Facial recognition and chip-enabled ID card scanning ensured compliance with State Bank of Vietnam regulations

• Full adherence to AML and KYC regulations maintained financial safety and transparency

Conclusion

Integrating eKYB into partner management processes enables financial institutions to achieve two critical goals: rapid scaling and strict risk control. Automated business verification not only boosts operational efficiency but also strengthens credibility with regulators. Senior executives should consider investing in eKYB solutions, starting with small-scale pilot evaluations with strategic partners and gradually expanding. To initiate implementation, contact FPT eID directly for consultations and suitable quotations tailored to organizational requirements.