🇺🇸United States

Onboarding Abandonment Due to Friction and Poor UX

3 verified sources

Definition

One in five client applications are abandoned due to KYC/AML complexities, excessive steps, and manual friction, with 85% of corporates reporting poor KYC experiences and 12% switching banks. Long processes (up to 120 days for 70% of banks) and fragmented tools cause customers to bail mid-process. 81% of C-suite executives note poor data management harms customer experience.

Key Findings

  • Financial Impact: $3.3 billion annually industry-wide in lost business
  • Frequency: Recurring with 20% abandonment rate per application wave
  • Root Cause: Too many steps, manual data entry, siloed systems, and compliance overkill

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Banking.

Affected Stakeholders

Customer-facing onboarding teams, Digital UX designers, Branch staff

Deep Analysis (Premium)

Financial Impact

$14,700 - $50,000 per abandoned SMB customer; 10-15% abandonment on SMB accounts = $2-5M annual loss • $14,700 average cost per abandoned commercial customer • $14,700 per abandoned customer x 20% abandonment rate

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Current Workarounds

Advisors resort to WhatsApp and shared Excel files for document collection. • Compliance teams use Excel matrices and secure email for manual relationship onboarding • Credit Analysts resort to paper forms scanned into Excel and WhatsApp coordination

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Prolonged Onboarding Delays Extending Time-to-Cash

$40m average annual spend per bank on onboarding

Excessive Manual Labor and Resource Waste in KYC

$40m average annual spend per bank; 307 FTEs dedicated to KYC

Bottlenecks and Idle Resources from Manual Onboarding

$3.3 billion annually industry-wide from delays and abandonment

Wire Transfer Fraud from Processing Delays and Red Flags

$10,000 per fraudulent transfer (dozens per incident)

Customer Delays and Hidden Costs in Wire Processing

Lost wire revenue from deterred usage (39% fraud target rate amplifies avoidance)

Bottlenecks from Manual Wire Verification and Legacy Systems

High operational costs from slowed processing (industry-wide inefficiencies)

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