Identifying UBOs remains one of the most complex challenges in CDD. These individuals, who ultimately control or benefit from a legal entity, must be verified to meet AML and CTF regulations.
Yet for many compliance teams, uncovering true ownership is a time-consuming and error-prone process. Complex corporate structures, evolving global regulations, and manual workflows have made UBO identification one of the most resource-intensive elements of compliance, claims KYC360.
UBO identification has become increasingly difficult as ownership structures grow more multi-layered and cross-jurisdictional. Nominee shareholders, shell companies and trust arrangements often conceal who truly holds control. Manual approaches, meanwhile, introduce risks of human error and oversight. Without accurate identification, firms may inadvertently onboard individuals linked to sanctions, political exposure, or illicit finance — exposing themselves to reputational and regulatory risk.
Regulatory expectations around UBO transparency have tightened significantly. The Financial Action Task Force (FATF) has updated its guidance on Recommendation 24 and 25, reinforcing the need for jurisdictions to maintain “adequate, accurate and up-to-date” UBO information. In Europe, successive AML Directives introduced beneficial ownership registers, but a 2022 court ruling restricted public access, creating visibility gaps across some member states.
Meanwhile, in the United States, the Corporate Transparency Act (CTA) came into effect in 2024, requiring entities to disclose beneficial ownership to the Financial Crimes Enforcement Network (FinCEN). However, enforcement has since been paused following the U.S. Treasury’s March 2025 decision not to pursue penalties against U.S.-formed companies. Despite these variations, firms globally must still demonstrate robust processes to identify, verify and document beneficial owners to remain compliant.
Effective UBO identification involves collecting detailed entity information, mapping ownership structures, and pinpointing the individuals with ultimate control. Verification should be conducted using a mix of public registries, official identification, and supporting documents. Screening against sanctions, politically exposed persons (PEP) lists, and adverse media databases is essential, as is maintaining comprehensive documentation and ongoing monitoring to capture ownership changes.
Manual UBO identification can no longer meet the demands of regulatory scrutiny or modern onboarding volumes. Technology solutions such as KYC360 are transforming the process, allowing compliance teams to automate data collection, ownership mapping and risk assessment.
Through automated onboarding workflows, platforms like KYC360 can aggregate corporate data across multiple jurisdictions, visualise ownership hierarchies, and identify indirect ownership links. Integrated screening ensures individuals are cross-checked instantly against sanctions and PEP databases. The platform also provides full audit trails, configurable risk scoring, and dynamic monitoring, reducing manual intervention and freeing teams to focus on higher-value analysis.
By leveraging automation, firms gain faster onboarding times, fewer manual errors, and stronger assurance of compliance integrity — a major step forward for financial institutions managing complex entity structures.
A strong UBO framework combines risk-based approaches with advanced technology and clear internal procedures. Firms should tailor investigations according to the entity’s risk profile, using multiple data sources beyond client disclosures. Consistent staff training, escalation protocols, and audit readiness remain vital. Crucially, UBO monitoring should be treated as a continuous process — not a one-time exercise — to capture changes in ownership or control.
With the right technology and controls, compliance teams can transform UBO identification from a regulatory burden into a streamlined, auditable and efficient function that enhances trust and mitigates risk.
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