Every fintech we speak to cares about their onboarding conversion rate. (Obviously).

The rise of BaaS in the last few years means that fintechs are springing up everywhere. Competition is fierce and onboarding conversion is even more important. If your onboarding flow is too hard, there's a competitor (often caring less about regulation) that is around the corner. This is often a cause of tension between risk & growth teams.

We're seeing drop-off rates for business onboarding increasing, averaging around 30% across payment providers and banks. KYC, KYB and AML regulations are also getting stricter, there being calls for more friction and checks in the process.

Diagnosing the reason for drop-offs

Here's what we've learned about what kills fintech B2B onboarding journeys:

Manual Reviews

Business onboarding often requires manual reviews for about 60% of applications, compared to only 2% for consumers. The main culprits? Fuzzy PEP and sanctions matching. This manual intervention significantly slows down the process and increases drop-off rates.

Switch to Mobile

Switching users to mobile from a laptop (eg scanning a QR code) can kill up to 30% of journeys. If you're triggering something like IDV or linking a bank account, see if you can handle it on the device the user starts on.

Document uploads

Requesting document uploads (like proof of address) at onboarding can reduce conversion by 20%. This data can be substituted with a lower-friction substitute, like Plaid link.

This is generally not necessary. When customer outreach is necessary, keep it to a minimum – ideally no more than 10% of applications.

Data Entry

No one wants to manually input 15 data points of business information. Prepopulating fields with company register data can improve conversion by about 15%. Also, be mindful that more people are reluctant to provide phone numbers during onboarding these days.

Best Practices:

Here's what we try to implement with the companies we work with:

1. Leverage non-documentary KYC where possible (e.g., UK electoral roll data), but always check with your banking partner first whether they're okay with this.

2. Streamline data collection by integrating with company registers.

4. Use OCR technology if document uploads are necessary to auto-validate before submission (preventing a second touch point with the customer)

5. For manual review, use a provider that can search social media for the customer's name and email.

6. For the really hardcore: AB test it (both frontend flows, but backend data sources too)!

By addressing these pain points and implementing thoughtful solutions, fintechs can achieve a smoother onboarding experience that's still compliant.

Note: these insights primarily apply to SMB onboarding at scale, where volumes are larger and available data may be more limited.