How to reduce abandonment rates during the KYB/KYC process in 3 steps

Who hasn’t felt frustrated when facing a complicated management or verification process that isn’t clear or intuitive?

Unfortunately, KYB (Know Your Business) and KYC (Know Your Customer) processes can sometimes be a bit complex 🫠.

However, they are essential for the success of businesses operating in regulated sectors, like finance. Beyond being a legal requirement, they are key tools for preventing fraud, protecting the integrity of operations, and building trust (they are more beneficial than complex 😉). Yet, their implementation can be challenging: long and convoluted processes often discourage users, causing them to abandon the process before completing it.

In this article, we’ll explore how to simplify and optimize these procedures, reducing abandonment rates and turning onboarding into a smooth and efficient experience. Because when KYB/KYC processes are well designed, they strengthen relationships with customers from the start.

What is KYB/KYC and why is it important?

KYB (Know Your Business) and KYC (Know Your Customer) are key processes for verifying the identity of clients and businesses, ensuring compliance with regulations and preventing fraud.

KYC is primarily used by banks and fintechs to verify user identities, protecting against money laundering and terrorist financing. Meanwhile, KYB focuses on validating the legitimacy of businesses with which one engages, preventing corporate fraud.

Although these processes are essential for meeting regulations, they can be lengthy and complicated, often leading users to abandon them. Simplifying and optimizing these procedures is crucial for improving conversion rates and ensuring secure, compliant business relationships.

Why do high abandonment rates occur in these processes?

High abandonment rates are a significant challenge, especially in sectors like finance, where onboarding new customers is crucial. This phenomenon reflects the percentage of users who abandon the verification process before completing it, which can happen for several reasons.

30% of banks and fintech companies have implemented remote onboarding for SMEs, and 50% offer biometric solutions in digital channels. In Europe, technologies like facial verification and AI automate processes, but they are often not fully integrated, creating friction and frustration.

One of the main causes is process friction. Users do not want to navigate a complex path that does not align with their expectations or habits. Financial institutions often fail to offer a seamless process that integrates all verification possibilities. For example, identity document validation and facial biometrics may exist as separate processes rather than part of an automated system that redirects users if one validation fails. This creates inconveniences that increase user frustration.

Additionally, human nature plays a key role. In many cases, users abandon the process without a clear reason, whether due to a lack of motivation or simply because the process is perceived as lengthy or unnecessary. This often happens when onboarding is presented rigidly, without considering the different ways users might interact with the company.

Finally, KYC regulations have historically enforced narrow and limited onboarding flows, without considering customer preferences. When companies fail to adapt these processes to customer needs, they lose the opportunity to complete verification and, consequently, to convert users into active customers.

To reduce these abandonment rates, it is essential to recognize these obstacles and optimize every stage of the KYC/KYB process, providing a more agile and accessible experience.

Step 1: Provide Clear Instructions and an Initial Guide

One of the main reasons for abandonment rates is a lack of clarity. To reduce abandonment, it is crucial to provide easy-to-follow instructions.

🖱️ Pre-guide and checklist
Before starting, provide a guide that explains the process step by step, indicating which documents or information are required. A pre-checklist will help users prepare and avoid surprises during the process.

🖱️ Personalize the KYC process
Personalizing the design of the KYC process to match your brand creates a consistent experience and builds trust. Even if you use an external provider, customizing the interface gives the impression that the process is part of your company, improving the user experience.

🖱️ Accessible instructions and alternatives
Ensure that the instructions are easy to understand by using visual examples or graphics. Offering alternative documentation in case users do not have all the required documents also helps to reduce barriers and makes it easier to proceed with the process.

🖱️ Benefits of clear instructions
A well-structured guide increases user trust and makes it easier to navigate the process, reducing the likelihood of abandonment and strengthening the relationship with the company.

Step 2: Simplify the KYB/KYC Process and Optimize the User Experience

Another main reason is the complexity of the verification process. To avoid this, it’s crucial to make the process clear, quick, and user-friendly. Here are some key steps to achieve that:

💻 Break the process into simple, sequential steps
Present the verification process clearly, breaking it into small and easy-to-follow steps. This prevents users from feeling overwhelmed by a long list of requirements.

💻 Intuitive design and accessible support
Ensure that the user interface is clear and easy to navigate. Additionally, provide real-time support, such as live chat, to assist users if they have questions or need help.

💻 Offer multilingual options and accessibility
Remember that your users come from different regions and speak various languages. Make sure the process is accessible in multiple languages and includes accessibility options, such as good color contrast and easy-to-read text, to enhance the experience.

💻 Allow progress saving and send gentle reminders
Users value their time. Offering the option to save their progress and resume later gives them the flexibility to complete the process when they choose. Also, sending gentle reminders through push notifications or emails can help bring users back if they drift away from the process.

Step 3: Reduce Time and Complexity in the Activation Process

A fast and simple activation process helps maintain user interest and prevents them from choosing alternatives. Here’s how to reduce abandonment by optimizing time and complexity:

⏱️ Short forms divided into steps
Break the information into brief sections that can be completed quickly. This reduces the feeling of being overwhelmed and speeds up the process. Start by gathering basic data, such as email, so you can send reminders in case of abandonment.

⏱️ Multi-device processes
Ensure users can switch devices without losing their progress. For example, starting on mobile and continuing on a computer. This offers flexibility and avoids frustration from having to restart from scratch.

⏱️ Automatic reminders and effective communication
Use automatic notifications or personalized emails to recover users who abandoned the process. Friendly and helpful messages can remind them to complete the process without being intrusive.

⏱️ Customizable options
Provide alternatives to complete the process: from online forms to in-person or mobile device options. Flexibility shows that you understand and value the needs of your users.

Benefits of Reducing Abandonment in KYB/KYC Processes

Reducing abandonment in KYB/KYC processes brings multiple key benefits for businesses:

✅ Higher customer conversion: An optimized process ensures more users complete onboarding, turning prospects into active customers and increasing revenue.

✅ Better customer experience: By offering a simple and fast process, you show that you value your users’ time, strengthening the relationship from the start.

✅ Effortless regulatory compliance: An efficient flow ensures users meet legal requirements without complications, avoiding regulatory risks.

✅ Reduced financial losses: Fewer abandonments mean fewer lost customers, and consequently, lower costs associated with acquiring new users.

✅ Stronger brand image: Providing a smooth and professional experience positions your company as trustworthy, improving competitiveness in the market.

How a Good KYB/KYC Process Builds Long-Lasting Relationships and How Silt Can Help You

A good KYB/KYC process allows you to build a trust-based relationship from the very beginning. The customer onboarding experience is crucial to make them feel secure and comfortable with your company. When users experience a clear, smooth, and transparent process, they are more likely to stay and become loyal long-term customers.

A well-designed process shows that you understand your customers’ needs, providing a frictionless experience that highlights the reliability and professionalism of your brand. Additionally, automation and simplification speed up verification and eliminate possible human errors.

At Silt, we are experts in optimizing KYB / KYC processes to ensure you meet regulatory requirements. Furthermore, we help you offer your users a seamless experience.

We assist businesses in reducing time and complexity, ensuring the verification process is fast, secure, and aligned with your brand image. Moreover, our automated solutions minimize friction, improving customer retention and strengthening relationships from the start.

If you want to optimize your users’ experience and increase customer retention, speak with us and discover how we can improve your KYB/KYC process. We help you grow! 💪🏻🧠