In financial services, onboarding is a risk story — not just a customer experience metric

Across financial services, the onboarding moment is where customer relationships are won or lost. Imagine a prospective customer: a mid-sized manufacturer with $200M in annual revenue who has decided to move a high-value financial relationship to your institution. They’ve engaged with your team, liked what they heard and submitted their application. Then they wait. 

Three days pass. Then five. A compliance step stalls somewhere between two systems that don’t talk to each other cleanly. Nobody catches it until the prospect calls to ask what’s happening. By day ten, they’ve quietly restarted conversations with a competitor. By day fifteen, they’re gone.

No outage was declared. No incident ticket was filed. The workflow technically completed. But the relationship — and the revenue — evaporated anyway.

That wouldn’t be unusual. According to Fenergo’s 2024 KYC and Onboarding Trends report, 67% of banks globally lost clients due to slow or inefficient onboarding in 2024. The gap between what institutions believe is happening in their onboarding workflows and what new customers actually experience is widening, and the financial consequences are measurable.

This scenario plays out more often than most executive teams realize in banking, insurance, wealth management and other sectors of financial services, because onboarding is almost universally treated as a customer experience problem: 

✅ Reduce friction

✅ Improve the digital journey

✅ Shorten time to first transaction

Those are worthy goals, but they address the surface without touching the foundation — where the real financial exposure lives. In onboarding, regulatory, operational and reputational risk converge into a single workflow and are compressed into a narrow, high-stakes window where any failure is costly.

Revenue exposure hiding in plain sight

Consider what’s actually at stake in a delayed onboarding workflow. Every day a high-value customer isn’t activated is a day of fee revenue, deposit float and relationship potential that doesn’t materialize. That exposure is measurable, and it compounds.

McKinsey research on corporate client onboarding found that the average process can take up to 100 days, with Know Your Customer (KYC) due diligence and account setup alone consuming more than 40% of that time. For the client on the other end of that process, the experience doesn’t feel like due diligence. It feels like indifference.

The numbers may vary by institution and segment, but the pattern is consistent: onboarding delay is a direct revenue drag. And the financial impact is only part of the story, because compliance exposure increases alongside it. Unlike churn, which is visible and tracked, delayed activation often goes unmeasured, absorbed into the operational budget rather than surfaced as a financial risk.

There’s also an abandonment problem that rarely makes it onto executive dashboards. When a consumer or business customer encounters significant friction during onboarding, they don’t always raise a complaint. They disengage. And when they disengage mid-process in a digital channel, they often don’t return. Capgemini’s World Retail Banking Report 2025 found that 47% of prospective customers abandon card and account applications midway through the onboarding process — rising to 51% in the United States — and that only 3% of banks consider their own onboarding experience to be seamless. 

So, you’re spending acquisition costs to reach customers you never actually convert.

Where processes fail: Bottlenecks and manual data entry

The reason onboarding is structurally different from other customer-facing workflows is that it forces coordination across systems and functions that don’t typically operate together in real time.

KYC verification, Anti-Money Laundering (AML) screening, credit assessment, account provisioning, document management, regulatory reporting and notification services all have to execute in sequence, often across a hybrid mix of on-premises systems, SaaS platforms and third-party data providers. Each handoff is a potential failure point. And each dependency is a place where a timing issue, data mismatch or system timeout can stall the entire chain.

Fenergo’s research puts a number on the cost of that complexity: annual KYC review costs can reach up to $175 million for a single commercial bank, with 86% of banks citing poor data management and siloed processes as the primary driver of onboarding inefficiency. Meanwhile, Capgemini found that 75% of banks report consistent delays in verifying customer identity and that 61% feel overwhelmed by application volume, specifically because of a lack of automation.

In most institutions, the workflow logic coordinating these steps was designed for a world of longer processing windows and more predictable cycles. That logic still works — until it doesn’t. When it breaks, the consequences don’t stay contained. 

• A compliance step that fails silently can create a regulatory exposure
• A provisioning delay that cascades can affect multiple customers at once
• An audit request that requires reconstructing a workflow trail becomes an investigation instead of a routine review

This is the structural problem that customer relationship and experience improvements don’t address. You can redesign the front-end journey and still have an execution layer underneath it that’s fragile, opaque and poorly instrumented.

The blind spot in onboarding risk

Think about your organization and ask yourself: if a critical onboarding workflow failed right now, could you trace it end-to-end immediately without assembling a team to reconstruct what happened across four systems and a spreadsheet?

For most institutions, the honest answer is no. And that gap matters increasingly to regulators who expect demonstrable control over KYC and AML processes, not just evidence that those processes exist.

Operational resilience requirements are also expanding. Regulators are asking more than just whether institutions can recover from disruptions. They’re asking whether institutions can demonstrate, in real time, that their compliance workflows are executing as designed. Onboarding sits directly in the crosshairs.

Yet onboarding orchestration rarely receives the same executive visibility as payments infrastructure or trading systems. It doesn’t get reviewed at the board level, nor does it appear in technology risk registers with the same prominence. It’s treated as an operational concern delegated well below the executive committee, even though the consequences of failure are board-level in nature.

Legacy systems, silos and technical debt

The existing systems coordinating onboarding workflows in most large institutions were built when the process was slower, more linear and more forgiving of delays. 

That tolerance is gone. Customer expectations have shifted to decisions in hours, not days. Regulators expect documented control. And the hybrid cloud environments most institutions now operate in — where a KYC check runs in one cloud, document verification in another and account provisioning still on-premises — introduce dependencies that legacy workload scheduling tools weren’t designed to manage. This is why onboarding has become a modernization problem, not just an operational one.

The data reflects how far behind most institutions actually are: Fenergo found that only 4% of banks had fully automated their KYC workflows as of 2024. The remaining 96% are absorbing that coordination cost manually, case by case and workaround by workaround. 

Legacy systems can be adapted, patched and extended. Teams do it every day. But the technical debt accumulates, and every adaptation makes the next one harder. Each new integration becomes a custom workaround. Each compliance requirement becomes a manual checkpoint. The operational overhead grows while the underlying fragility stays invisible.

A modern, scalable onboarding solution

The path forward isn’t a front-to-back replacement of onboarding infrastructure. It’s establishing an orchestration layer that can coordinate the existing ecosystem — legacy and modern, on-premises and cloud — while providing the visibility, control and scalability that executive governance requires.

That means:

• Event-driven execution that responds to real signals — a document verified, a KYC check completed, a risk score returned — rather than clock-based scheduling that assumes everything ran on time
• End-to-end workflow visibility so that any step in the onboarding chain can be traced, audited and explained without manual reconstruction
• Dependency-aware orchestration that isolates failures rather than allowing a single stalled step to cascade across an entire batch of onboarding cases
• Hybrid cloud connectivity that works across the full environment without requiring every system to be rearchitected first

This is the capability gap that modern orchestration fills — and it’s where RunMyJobs by Redwood is built to operate. As a cloud-first Service Orchestration and Automation Platform (SOAP), RunMyJobs connects legacy and modern systems across hybrid environments without the technical debt of self-hosted tools, and without forcing changes to the stable workflows that already run reliably.

Elevate the conversation beyond customer experience

The most important shift here is executive framing. Onboarding reliability belongs in the same strategic conversation as payments modernization, operational resilience and regulatory compliance — because the consequences of getting it wrong land in all three places.

When you treat onboarding orchestration as a CX improvement project, you underfund the control layer. It also requires a shift in how onboarding is measured, from speed and completion rates to revenue at risk, exception rates and compliance exposure. 

But if you treat it as an operational risk, you invest in the right place. The revenue protection, regulatory defensibility and customer retention gains follow from there.

The institutions that recognize this distinction early won’t just onboard customers faster. They’ll do it in a way that’s auditable, resilient and built to scale as the workflow complexity around them keeps growing.

Learn what a migration to RunMyJobs looks like and how it could modernize your customer onboarding process.