In 2025, banks are more cautious than ever when considering account applications by potential business clients. With rising levels of fraud, regulatory oversight, and international sanctions, Know Your Business (KYB) reviews have become a critical part of corporate onboarding.
This article outlines what financial institutions look for during KYB checks and how companies can prepare. From legal registration to ownership transparency and transaction monitoring, each element plays a role in building trust with your bank and avoiding account rejections or disruptions.
Why KYB reviews matter more in 2025
The rise of international payments, shell companies, and digital businesses has increased regulatory focus on business relationships. Regulators now expect banks to perform deep checks, not only at the time of onboarding but throughout the client relationship.
According to the European Banking Authority, 42% of fines in 2024 were linked to financial crime failures due to weak KYB procedures. In the US, the Financial Crimes Enforcement Network (FinCEN) introduced the Corporate Transparency Act, requiring beneficial ownership disclosures starting in January 2024. This regulation affects how banks handle KYB checks in 2025.
What banks look at during KYB reviews
1. Legal existence and registration
The first step in KYB reviews is confirming that the business is legally registered and active. Banks verify the company’s registration number, incorporation date, address, and other founding documents. If anything is missing, outdated, or inconsistent with official registries, onboarding will be suspended.
In early 2025, in Austria, one local financial institution rejected 12% of new business account applications because the trade register information could not be matched with the documents provided. In several cases, documents came from dissolved companies or entities that had no trading license.
Always provide up-to-date documents from official government registries, translated if necessary, and stamped when required.
2. Shareholding and beneficial ownership
Banks need to know who controls the company. This includes shareholders, beneficial owners, and people who hold voting rights or make key decisions.
In many jurisdictions, businesses are required to declare the Ultimate Beneficial Owner (UBO). Banks cross-check this data with UBO registries, sanctions lists, and financial crime databases.
In 2024, a UK-based EMI (electronic money institution) was fined £5.4 million after allowing 168 companies to open accounts without verifying beneficial owners. Some of these owners had links to high-risk jurisdictions and were later flagged by Europol.
So, we strongly recommend maintaining a clear shareholder structure and disclosing all individuals owning 25% or more of the company. If there are trusts or layers, explain them fully.
3. Business model and source of funds
Banks will want to understand how your company makes money. They will ask for a business plan, sales contracts, supplier agreements, and descriptions of services or products.
If the business activity is vague or inconsistent with the company’s documents, the bank may consider the client high risk.
There is a risk that a commercial bank might reject the corporate applications after finding that stated business activities do not match actual transactions, like in the case of a company claiming to sell clothing but having no supplier invoices or import documentation. In such a situation, the business could be suspected of being covered by a cryptocurrency brokerage without a license or engaging in other illicit activities.
In order to minimise the risk of being rejected by banks, be prepared to show how your business operates: websites, contracts, invoices, and a short company profile can help.
4. Geographic risk and jurisdiction review
Banks assess where your company is incorporated and where it operates. Companies that are based in or send money to high-risk countries (as defined by FATF) will face more questions.
In 2025, Société Générale suspended the onboarding of companies with links to Myanmar, Iran, and North Korea due to updated EU restrictions. Even legitimate businesses with operations in these countries faced account closures unless they provided full compliance documentation.
If your company works with clients or suppliers in high-risk countries, be transparent about it and explain the due diligence steps you take regarding your partners.
5. Transaction behaviour
Banks review the volume and nature of your expected transactions. If the company claims to be a startup but expects €2 million in monthly transfers, it raises suspicion.
Many banks ask for forecasts, past financials, or real client invoices. They also check transaction patterns once the account is open.
An Estonian neobank flagged and froze accounts of 37 e-commerce businesses after detecting unusually high-volume payments to unrelated third parties in Asia. These companies had declared only European operations and small monthly volumes.
To maintain an acceptable financial pattern, align your declared operations with your expected banking activity. If things change, update the bank.
6. Adverse media and background checks
Banks use tools that scan news sources, government announcements, and financial databases to detect negative mentions of your business or its directors. Even if a company looks legal on paper, public records may reveal fraud charges, lawsuits, or sanctions.
In 2025, a Danish bank rejected a client who had passed all KYB document checks. The rejection was based on media reports from 2022 about tax evasion involving one of the company’s founders. Though the case was still in court, the bank chose to avoid the risk.
To be ready, we suggest you Google your company and its executives regularly. If there is negative information, prepare an explanation for the bank.
7. Sector risk
Certain industries automatically raise more questions. These include: cryptocurrency, gaming, adult services, online lending, forex, and defense-related sectors. Even if the business is legal, banks apply stricter checks in these areas.
A fintech company in Lithuania offering wallets for NFT-based gaming faced three months of onboarding delay because the bank required extra-legal opinions, licensing documents, and proof that NFTs were not used to bypass gambling laws.
If you operate in a sensitive sector, have your licenses, terms of service, risk policies, and legal opinions ready.
8. Ongoing monitoring and reviews
KYB doesn’t stop after account opening. Banks conduct periodic reviews, especially if your business structure changes, new owners come in, or transactions exceed expected volumes.
Sometimes, a company’s account can be frozen by a different country’s bank after adding a new shareholder who is flagged on a sanctions list. The company fails to notify the bank of the change, leading to a full review and interruption of services.
Update your bank on major changes: new shareholders, new jurisdictions, new services, or significant shifts in turnover.
How to Prepare for KYB in 2025
To pass KYB reviews smoothly, businesses should:
- Maintain clear and updated corporate records
- Keep ownership and control simple and transparent
- Document how the business works with real data
- Be upfront about risks and sensitive areas
- Cooperate with periodic reviews and respond quickly to requests
Digital tools can also help. Platforms like KYB360 and SumSub offer identity management tools that prepare pre-verified company data to share with banks.
Bottom line
KYB is no longer just a formality. In 2025, banks have become more cautious and methodical. They want to avoid fines, reputational risks, and bad clients. If your business is real, well-documented, and transparent, passing KYB should not be difficult.
Use real documents, answer questions clearly, and stay alert to your business’s legal and financial standing. And if you’re ever unsure, consult with legal and compliance professionals before opening an account.
A little preparation goes a long way when your bank is deciding whether to trust your company.
Discover key industry insights in our article: “Why More Entrepreneurs Are Choosing Offshore Banking in 2025?”
If you need support, book a free consultation with our experts today.
Disclaimer
Widelia and its affiliates do not provide tax, investment, legal or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, investment, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Please consult https://widelia.com/disclaimer/ for more information.
