Going global has never come easier or harder. As digital infrastructure has spread, a London-based fintech can now reach clients in Lagos, São Paulo, and Jakarta in a matter of weeks. Yet, international expansion is fraught with complex regulatory issues, changing environments for fraud, and a disparate set of consumer expectations.
At its foundation is a seemingly uncomplicated process: Know Your Customer (KYC). What once was nothing more than a compliance courtesy has become an important strategic growth catalyst. It is an important differentiator, deciding if an institution can quickly enter a new market, easily onboard customers, and protect its brand equity.
When done right, it reduces drop-off rates, increases customer confidence, and provides a pathway for operational scalability. Done wrong, it can impede marketplace growth, enrage customers, and draw regulatory sanctions. In this article, learn how world leaders are designing scalable, flexible KYC processes that balance compliance needs with user expectations and turn regulation from a barrier to a differentiator.
The Challenge of Global KYC
Moving into other areas holds multiple challenges. This comes from the variety of factors involved:
- Regulatory variety exists, as every jurisdiction has its own rules governing identity verification, anti-money laundering thresholds, and data retention. What works in the EU through AMLD6 may not be good enough to satisfy regulators from the APAC region or African central banks.
- The document and language diversity is crucial; a truly global audience requires strong back-end functionality for a range of languages, alphabets, and identification types, from Vietnamese national identity cards to Argentinian passports.
- Fraud sophistication; threats are no longer limited to forged documents. Synthetic identities, deepfake videos, and AI-generated IDs are increasingly common, requiring advanced detection methods.
- Risks from vendor dependence occur because businesses become dependent upon one verification entity, which leaves them exposed to gaps in geographic coverage or lagging behind regulatory changes.
The Financial Action Task Force (FATF) acknowledges that inconsistency in money laundering processes remains an important barrier to advancing AML enforcement internationally. The same applies to the World Bank, which observes that almost 30% of companies that want to join emerging markets mention “onboarding and verification” as their chief operational challenge.
The Financial Consequences of Scalable KYC in Fintech
For banks and fintechs that do business all over the world, KYC is more than just a box to check for compliance; it is a key financial tool. Bad or ineffective KYC slows down growth, raises costs, and makes customers leave. On the other hand, a well-designed, scalable KYC framework helps you get new customers, accelerates revenue growth, and improves long-term unit economics. Recent data from the industry show how important these effects have become.
Loss of customers and drop-off in onboarding, both globally and regionally
- A report from Fenergo in 2025 said that 70% of banks around the world lost customers in the past year because onboarding was too slow or not effective. This was the highest number ever recorded.
- In a global survey of more than 450 banks in 2024, 67% said they lost clients because of bad KYC and onboarding practices. This is up 19 percentage points from 2023.
- In Asia, things are especially dire right now. In 2024, about 87% of businesses based in Singapore said they lost clients because of KYC problems.
- A well-known report by PIF and identity-verification company HooYu found that only 74% of users who start the onboarding process finish the KYC/process. This means that about 26% of users drop out. This report is true for both fintechs and e-money providers, not just banks.
These numbers indicate that bad KYC processes can make fintechs lose a quarter or more of their potential customers, and in some markets, the loss is even worse.
Costs for Institutions: Compliance Costs and Operating Costs
- Fenergo’s 2024 report says that KYC reviews are costly. For a corporate or institutional bank, they can cost up to US$60 million a year, and for a commercial bank, they can cost up to US$175 million.
- The same report says that 86% of banks say that the main reasons for losing clients are internal problems like bad data management, siloed workflows, and manual processes.
- A report on digital banking onboarding in Europe found that banks may be losing about €6.43 billion (~US$6.9 billion) a year because of inadequate onboarding practices.
These costs, which include lost customers and compliance and operational expenses, show that KYC inefficiency is a big problem for making money and growing.
The Cost of Opportunity: Slower Growth and Less Money
For fintechs and neobanks, revenue usually starts only after identity verification (e.g., deposits, card issuance, cross-border payments, trading, lending). Any onboarding that is delayed or dropped means lost or delayed revenue. With global abandonment rates usually between 20% and 30%, the consequence is a big loss of revenue. The PIF/HooYu report’s 74% completion rate shows how risky this is.
The lost customers because of KYC friction, especially in growth markets, mean that it costs more to acquire new customers (CAC). Users may arrive to the onboarding page through marketing and acquisition spending, but incorrect KYC flow stops them from converting. As mentioned above, the high costs of compliance and regulation make inefficient KYC even worse for unit economics and returns on growth investments.
Cross-border payment platforms and global fintechs must support different types of identities, multilingual documents, and regulatory regimes. If KYC isn’t done correctly, it can make it much harder for these companies to grow in new markets, costing them money in the process.
The Business Case for Scalable, Automated, Localised KYC
A modern, scalable KYC framework with automated workflows, vendor-agnostic orchestration, localisation, and risk-based flows can significantly lessen these bad effects:
- Lower abandonment rates during onboarding: Fintechs can boost completion rates by making flows easier, reducing friction, and supporting local document types and languages. This turns potential customers into active ones.
- Lower costs of doing business and following the rules: Automation cuts down on the amount of work that needs to be done by hand, lowers the cost of checking each customer, and cuts down on the cost of expensive periodic reviews.
- Speed up the time it takes to make money: Faster onboarding means faster activation, which is very important for fintech business models that rely on conversions (payments, lending, trading, remittances).
- Support global growth and unit economics: A flexible, modular KYC architecture helps manage compliance across different jurisdictions in a more cost-effective way, which makes it easier to enter new markets and makes them more financially viable.
- Protect your value and appeal to investors: Strong KYC operations and low abandonment rates show that your company is mature in terms of regulations and customer service. These are things that investors are paying more and more attention to in growth-stage fintechs.
In 2024-2025, data from around the world indicates that most financial institutions, both, traditional banks and fintechs are losing customers because their KYC and onboarding processes are slow or not working well. At the same time, the costs of compliance and verification are in the tens or hundreds of millions for each institution. Poor onboarding leads to lost revenue, wasted acquisition spending, and slowed growth.
So, for any fintech that wants to do business around the world or grow quickly, KYC should not be seen as an afterthought by regulators but as a key business process, a competitive advantage, and a way to make money. Putting money into scalable, localized, and automated KYC isn’t just about following the rules; it’s also necessary for growth and profit.
Developing a Scalable, Flexible KYC Framework
Think of KYC as the nervous system of a global business: it senses danger, interprets signals from varied markets, and responds quickly to make the organism not just survive but thrive. But unlike a fixed biological system, KYC has to constantly evolve, adapting to new regulations, new fraud tactics, and evolving customer expectations. In 2023 and 2024, this adaptability went from being highly beneficial to mission-critical as fraud instances hit historic highs and regulatory timelines compressed.
For businesses expanding into global markets, a “set it and forget it” strategy for KYC is no longer sufficient. The pioneers in the space are building verification platforms that are modular, robust, and exquisitely localised – capable of serving customers in Berlin, Manila, or Nairobi with the same speed and confidence. Here’s what that means in practice:
- Multi-Vendor Strategies
Multiplying KYC vendors minimises single-point failure risks and provides regional compliance specialisation. More than 47% of financial institutions in 2023–24 entered into strategic collaborations with fintech or regtech vendors to co-create fraud and compliance solutions. This indicates an intentional move towards vendor diversification, particularly in fast-changing regulatory contexts.
- Localisation-First Approach
A single, one-size-fits-all system cannot succeed. Firm KYC needs to be combined with locale languages, identity types, and UX customisation. Over 2,000 types of documents in 190 countries are supported by vendors today, which enabled one platform to accommodate highly divergent local requirements with agility.
- Multilayered Fraud Prevention
According to the results of our internal research, published in Sumsub’s 2023 report, tactics of fraud have intensely shifted inward. Tenfold deepfake efforts were seen within the year 2022-2023, with 1,740% North America and 1,530% growth in APAC. In response, use of AI-fraud detection increased 76% and yielded up to 65% fewer verification error occurrences. Over 83% of organisations implemented their updates to their KYC process just to offset AI-powered fraud.
- Agile Compliance Management
Rules hardly ever capture the complexity of a product roadmap. As Europe’s AMLD6, eIDAS 2.0, Digital Operational Resilience Act, and US Bank Secrecy Act updates become operational from 2023 through 2024, an astonishing 89% of organisations have strengthened identity infrastructure to address these future mandates, frequently using real-time authentication to address compliance issues.
- Frictionless User Experience
Advanced KYC solutions function seamlessly in the background. For organisations that have adopted digital KYC solutions, onboarding time has decreased by up to 49%, frequently reducing what would otherwise be a multi-day process to simply several minutes. Also, biometric solutions hold out the promise of a 45-50% reduction in fraud rates, proving that security and velocity can and must coexist.
Case study: Paysend
Entering overseas markets involves not only economic prospects but also complex issues related to compliance. As organisations grow, their verification procedures usually evolve from simple regulatory judgments to fundamental strategic instruments that drive development, boost security, and enhance overall client satisfaction.
This refers to Paysend, an international payment services company that operates in over 50 countries. Its authentication system relied on a single supplier, which brought many limitations:
- Limited geographical scope: Different locations have different regulatory environments, which makes it challenging for a single provider to sustain complete compliance in all areas.
- Documentation constraints: Lack of multilingual and localized ID support slowed onboarding and increased manual intervention.
- Fraud Detection Limitation: Legacy systems showed inefficiencies in determining high-order fraudulent behavior, like fake identities or forged documents.
- Vendor inflexibility: Regulatory and technological changes required proactive adaptation, but single-provider solutions often lagged behind.
These were pain points that needed a more flexible, multi-layered KYC solution. More and more, however, companies that want to grow globally deploy approaches that combine automation, localisation, and proactive fraud management:
- Multi-vendor integration: Use of various verification technologies tailored to certain geographies and document types increases coverage of compliance.
- Localised processes: Supporting multiple languages, cultural restrictions and multiple types of ID provide less resistance for consumers and make verification more successful.
- Smart fraud protection: Computer-smart screens in addition to semi-automatic authentication checks enhance platform safety without compromising on user comfort.
- Agile compliance: Ease of monitoring and configuration enables firms to respond to drifts in regulations in a prompt manner.
The benefits of this strategy are real. In fact, companies have seen:
- A 10% lift in approval rates, immediately enhancing onboarding effectiveness.
- Sub-10-second processing for verification to improve user experience and retention.
- 20% fewer deepfakes and fraud attempts, building confidence and platform security.
Enhancements in operational effectiveness via no-code workflow functionality, allowing non-technical teams to control verification flows and enhance user experience without programming knowledge.
This illustration gives international businesses an important rule of thumb: verification procedures are no longer simply about compliance and compliance is no longer sufficient – they’re strategic foundations. At sufficiently large scales for flexibility, user experience, and convenience, KYC procedures can drive market expansion, reduce operational friction, and facilitate secure, issue-free experiences for tens of millions of global users.
Whereas companies are still seeking next-generation KYC methods such as behavioral biometrics, real-time screen monitoring, and self-sovereign identity models, the capability of balancing security, compliance, as well as client experience, shall remain a key success factor globally.
Case Study: Revolut (UK) – Modular KYC for Global Scale
Revolut, the London-based challenger bank, expanded rapidly across Europe and beyond, posing major KYC/AML and compliance scaling challenges. One case study notes that Revolut, in partnership with verification vendor Entrust, achieved “38 seconds faster results delivery” via identity verification tooling.
Another vendor-case with GBG highlights how Revolut moved from manual document scans + live selfie checks to a more automated global identity-verification layer.
Pain Points:
- Scaling across multiple jurisdictions with varying identity-document types, languages and regulatory regimes.
- The risk of vendor lock-in or a one-size-fits-all vendor incapable of covering all markets or evolving fraud types.
- Regulators becoming increasingly sceptical: for instance the UK’s lead regulator flagged concerns that Revolut’s risk-controls may not keep pace with its global footprint.
Response Strategy:
- Revolut developed an internal API-driven KYC orchestration layer that allows switching or layering vendors by geography and document type.
- They increased focus on real-time fraud / AML monitoring globally (though publicly there is criticism of lag in some areas).
- Localisation of workflow: recognising that users in one market expect different UX and verification flows than in others (though not always explicitly documented).
Results / Insights:
- Verification time improvement: e.g., “38 seconds faster results delivery” via Entrust case.
- Regulatory fines are still material: e.g., Revolut was fined ~€3.5 million by Lithuanian authorities for AML/transaction-monitoring failures, emphasising that fast growth alone doesn’t substitute strong infrastructure.
Important Metrics for Succeeding in KYC
Measuring the effectiveness of a KYC system requires far more than just ticking compliance boxes. For growth-oriented businesses, it depends on tracking a judiciously selected set of key performance indicators that reflect not just operational effectiveness, but tangible business outcomes.
The approval level is oftentimes that first statistic that draws attention, as it provides the proportion of successfully passing verification testers. High approval rates usually point towards an easy process and well-developed criteria, while low rates can uncover overly strenuous verification or.documentation failure across different markets. Processing time is just as valuable. In high-speed markets like fintech, being able to process applications within seconds can be all about making that sale versus losing a customer forever.
Fraud detection ratio is an important security element in the formula, which indicates how effectively the system prevents and identifies fraudulent behavior. As ever-more advanced threats develop, from synthetic identities to deepfakes, this measure becomes increasingly important. Balancing the need for strong fraud defense with being true to legitimate customers’ experience is a challenge that stands out.
Per-case verification cost is an important measure, particularly for large businesses. A method that is fast and accurate but resource- intensive can compromise profit margins and hinder growth. By tracking it with other important measures, companies can identify ways to increase their efficiency, improve their relationships with suppliers, and prioritize investment in automation with the most significant returns.
All these statistics collectively create a clear picture of how KYC not only completes compliance obligations but also promotes progress, develops client trust, and unlocks the door to bold business ventures in global markets.
Future Trends in KYC in International Business
Looking ahead, several key trends are set to revitalize KYC procedures, driven by developments in information and communications technologies and the changing environment of regulatory compliance.
AI-Powered Fraud Detection
The rise of AI-created deepfakes and synthetic identities has significantly impacted the identity verification world. To address this growing threat, AI and machine learning algorithms are being refined, enabling more advanced, automated processes of KYC. The advancements help identify fake documents or suspicious behavior with better accuracy, thus reducing the need for human intervention and enhancing the overall experience of customers.
Ongoing KYC
The conventional model of frequent scrutiny of KYC is being restructured to that of real-time monitoring. This restructure is being driven largely through big data analytics, machine learning, and AI. Such technologies enable mass classification of clients according to their levels of risk within a short span of time and frequent re-updating of data stored in KYC after occurrence of trigger events. This model enables companies to have current customer records, enhancing compliance and minimising the risk of financial crime.
Self-Sovereign Identity
Self-sovereign identity, where a user is in control of his/her identity information without any need to be dependent on any central authority, is being shaped. The SSI marketplace worldwide was around USD 1.83 billion in 2024 and would exponentially increase in upcoming years. SSI promises better, secure, user-centric processes of KYC, where a person would be transmitting the attested credentials to service providers, something that would curtail instances of data theft and foster greater security.
Wrapping up
With intense competition within overseas markets, Know Your Customer practices have transformed well beyond their humble beginnings as a mere regulatory ritual. In this modern world, KYC is an important landmark within the client experience, building lasting first impressions, engaging user loyalty, and emphasizing an organisation’s commitment to security and openness. Organisations that embrace a strategic model of verification – one shaped through flexible, client-centric models are better equipped to navigate through the complex sea of competing jurisdictions and still reach operational greatness.
To see KYC as a key product judgment, rather than just a compliance process to be dealt with after closing hours, makes it a potent growth driver. It expedites onboarding, reduces friction, detects suspicious activities before they turn into financial or reputational crises, and ensures real customers of their clean bill of health. Further, a well-designed KYC solution reinforces a strong message of trustworthiness from the organisation to the customers, partners, and the regulators, thus enhancing brand credibility in diverse markets. In a networked economy, where consumers look forward to frictionless digital interactions and regulatory environments change rapidly, organisations that adopt flexibility, innovative technologies, and user-centric designs into their verification procedures can gain a substantial competitive advantage. If done responsibly, KYC becomes a key driver of sustainable, scalable, and global growth.
