Compliance has quietly become a tax on growth for banks and FinTechs. Around $304bn is spent globally every year on anti-money laundering (AML) and know-your-customer (KYC) compliance.
This is according to research by Ronald F. Pol. Despite that outlay, roughly 30% of businesses abandon the onboarding process altogether, RegTech firm Duna has found.
Duna recently jumped deeper into the topic of why onboarding belongs on the COO agenda.
Business customers carry high lifetime value, which makes onboarding a revenue function as much as a compliance exercise. Yet it remains a cost and efficiency problem.
Compliance teams in regulated industries sit on the front line against fraud and regulatory penalties, but manual processes bog analysts down, leaving little capacity for genuine high-risk investigation. Every missing document, email chase and routine case review inflates the workload and the cost of getting a customer live.
Compliance, in short, is a hygiene factor. Once mandatory checks are done, the rest of the journey should convert legitimate businesses into customers without generating needless work on either side.
Why customers walk away
Business customers expect onboarding to be fast and painless. Instead, they are asked to email one more PDF, answer one more question and sit through another manual review. Duna’s figures suggest financial institutions lose 15% of onboarding customers with each follow-up request, a loss that compounds with every additional ask.
Time is equally corrosive. If a business is not onboarded within 24 hours, conversion falls by around 55%, according to Duna.
Much of the friction stems from how compliance work is managed. Documents sit in inboxes, spreadsheets and shared drives; requests travel by email; reviews pass from one person to the next.
The true cost of compliance operations
Software is only a fraction of the compliance bill. Hidden beneath are the operating costs, including the internal effort to review and approve customers and business process outsourcing (BPO).
Analysts also burn hours on cases that require no action at all. False-positive rates in know-your-business (KYB) screening can exceed 90%, a figure backed by BCG, McKinsey, PwC and ACAMS, while Duna’s own calculations put the figure closer to 99%.
The traditional response, hiring more analysts or outsourcing operations, simply layers cost onto an inefficient process.
AI changes the operating model
AI shifts compliance work out of email and spreadsheets and into a system that collects evidence, applies policy and routes cases automatically. In a policy-driven onboarding model, policies are converted into code and applied as evidence arrives, rather than being interpreted manually from a handbook. Only cases requiring human judgement are flagged, freeing analysts to investigate real risk. Duna reports that 90% of onboarding cases can now be reviewed in 41 seconds.
One leading European e-commerce platform used Duna’s AI-native onboarding to cut SME onboarding time from eight days to under a minute, reduce follow-up cases by 53% and lower drop-off rates by 37%.
Even so, Duna estimates only 10% of firms have made meaningful progress with AI in compliance, partly because decisions must be explainable, auditable and consistent enough to satisfy internal risk teams and external regulators.
The first approval is only the start
In regulated industries, onboarding runs across the whole customer lifecycle. Ownership changes, adverse media, revised policies or new product applications can all trigger reboarding, repeating the same manual work and cost.
Most leaders know how initial onboarding performs; far fewer can quote their reboarding completion rate or its cost.
Three questions every COO should answer
First, what percentage of onboarding volume can be processed without manual intervention? Straight-through processing (STP) speaks directly to the ROI of AI agents. Executives report STP rates of 50% or less, even though automated workflows can push above 80%.
Second, what is the cost per completed business customer? Firms that count only software spend miss the operating work behind each approval.
Third, what is the business onboarding conversion rate? Duna’s enterprise customers have seen conversion rise by 35-38% within six months of implementation.
Onboarding is still treated as a compliance workflow despite its direct impact on conversion, cost and productivity. A policy-driven operating model strips out repetitive work, speeds up approvals and lets teams focus on fraud patterns and genuine policy violations.
Copyright © 2026 RegTech Analyst
Copyright © 2018 RegTech Analyst
