If you're struggling with slow customer onboarding due to identity checks, you're not alone. Research from Fenergo shows that 70% of financial institutions in 2025 lost clients because of slow and inefficient onboarding processes, and the problem is getting worse. Every delay in identity verification adds friction to the customer experience, and nowadays, that friction translates directly into abandoned applications and lost revenue.
The good news? Slow customer onboarding isn't inevitable. By shifting from manual, paper-based identity checks to automated, AI-powered verification, companies can streamline account onboarding while actually improving security and compliance.
This guide will show you exactly how to speed up your customer onboarding process without sacrificing accuracy or regulatory compliance.
Here, we'll discuss the specific IDV challenges that result in slow client onboarding as well as how 1Kosmos solves it — especially for banks, universities (higher education/SLED), healthcare, and federal agencies that require citizen verification.
When identity checks slow down customer onboarding
Before you can fix slow onboarding, you need to understand what's causing the bottleneck. In most cases, the problem isn't identity verification itself. It's how you're doing it.
Manual document verification creates bottlenecks
Manual identity verification is the single biggest cause of slow customer onboarding. When verification teams have to manually review documents, check for authenticity, and cross-reference information against databases, the process can take days or even weeks.
Here's what typically happens: A customer submits their driver's license or passport. The document sits in a queue waiting for a verification specialist to review it. The specialist examines the document, checks for signs of tampering, and manually enters information into your system. If anything looks suspicious or unclear, the document gets flagged for additional review.
This creates a cascading delay. Each manual touchpoint adds hours or days to the onboarding timeline.
And because human verification has failure rates up to 26%, errors often require additional rounds of review, further extending the process.
Legacy systems can't keep up with customer expectations
Your customers expect instant gratification. They can open a social media account in seconds, order products with one click, and stream content immediately. When your onboarding process takes days or requires them to visit a physical location, you're creating friction that modern customers simply won't tolerate.
Legacy identity verification systems were built for a different era. They're susceptible to modern AI-powered threats like deepfakes, can't process the volume of applications modern businesses receive, nor can they deliver the real-time verification that customers now expect.
The disconnect between customer expectations and legacy capabilities creates a competitive disadvantage. While you're asking customers to wait 3-5 business days for verification, your competitors are onboarding customers instantly.
The real cost of slow identity verification
Slow identity verification doesn't just frustrate customers. It costs you money. More data from Fenergo show that one in five customer onboarding applications are abandoned due to KYC and AML challenges, costing banks an estimated $3.3 billion annually in lost business.
Customer drop-off rates increase dramatically at each verification step. The longer the process takes, the more likely customers are to abandon it entirely. And once they leave, they rarely come back. They move on to competitors who offer faster, more convenient onboarding experiences.
Beyond lost customers, slow verification also increases operational costs. Manual review requires dedicated staff, creates compliance risks through human error, and limits your ability to scale. You can't grow your customer base efficiently when each new customer requires significant manual processing time.
The shift to automated, AI-powered identity verification
The solution to slow customer onboarding isn't to skip identity verification or reduce security standards. It's to modernize how you verify identities using automation and artificial intelligence.
What automated KYC solutions include
Automated KYC solutions replace manual document review with digital, AI-powered verification that happens in real time. Instead of waiting for a human to examine a driver's license, automated systems instantly scan the document, extract data, verify authenticity, and cross-check information against authoritative databases.
Modern automated KYC includes several key components working together. Document verification uses AI to scan government-issued IDs and detect signs of fraud or tampering. Biometric authentication captures a selfie and uses facial recognition to match the live person to the photo on their ID. Liveness detection ensures a real person is present, not a photo or video. And real-time data lookups verify information against trusted sources like the Social Security Administration or DMV databases.
These components work together to create a verification process that's both faster and more secure than manual review. The entire process happens in seconds, not days, and eliminates the human error that plagues manual verification.
How AI and machine learning accelerate verification
AI and machine learning don't just speed up verification. They make it more accurate. While human reviewers have failure rates up to nearly 30%, AI-powered systems can achieve accuracy rates above 99%.
Here's how it works: Machine learning algorithms are trained on millions of identity documents from around the world. They learn to recognize the subtle security features, patterns, and characteristics that distinguish genuine documents from fakes. They can detect sophisticated fraud attempts like photocopies, screen captures, or counterfeit documents that might fool a human reviewer.
AI also enables instant data extraction and validation. Instead of manually typing information from a document, AI reads barcodes, MRZ codes, and NFC chips embedded in modern IDs. It extracts the data in milliseconds and immediately cross-checks it against multiple authoritative sources.
The result is verification that's not only faster but also more reliable. You reduce false positives, catch more fraud attempts, and create a smoother experience for legitimate customers.
Key strategies to accelerate customer onboarding
Now that you understand the technology behind faster verification, let's look at specific strategies you can implement to speed up your customer onboarding process.
Automate document verification with AI-based scanning
The first step to faster onboarding is eliminating manual document review. AI-based document scanning can verify government-issued IDs in seconds by analyzing security features, extracting data, and checking for signs of tampering or fraud.
Modern document verification systems support thousands of ID formats from countries around the world. They can read driver's licenses, passports, national ID cards, and other government-issued documents. The AI examines holographic overlays, microprinting, UV features, and other security elements that are difficult or impossible to replicate.
The system also performs multi-layered checks. It reads PDF 417 barcodes on driver's licenses, extracts data from MRZ codes on passports, and validates NFC chips in modern identity documents. All of this happens automatically, in real time, without any manual intervention.
Add biometric liveness detection for real-time identity matching
Document verification alone isn't enough. You also need to confirm that the person presenting the document is the same person pictured on it. That's where biometric liveness detection comes in.
Liveness detection uses the customer's smartphone or computer camera to capture a selfie and verify that a real, live person is present. Advanced systems use true-depth camera functionality and require randomized facial movements to prevent spoofing attempts using photos, videos, or masks.
The system then uses facial recognition to match the live selfie against the photo extracted from the government ID. This creates a verified link between the document and the person, confirming proof of possession at the time of onboarding.
The best liveness detection systems are certified to iBeta PAD2 standards, meaning they've been independently tested and proven effective against sophisticated presentation attacks.
Implement risk-based routing for faster approvals
Not all customers require the same level of scrutiny. Risk-based routing uses Customer Due Diligence (CDD) to automatically onboard low-risk customers immediately while routing high-risk profiles for Enhanced Due Diligence (EDD).
Low-risk customers who pass all automated checks can be onboarded instantly without manual review, creating a frictionless experience for the majority of your customers. High-risk customers, identified by factors like geographic location, transaction patterns, or data inconsistencies, receive additional scrutiny from your verification team but represent only a small percentage of total applications, giving you the best of both worlds.
Use data pre-fill tools to reduce friction
Data entry errors are a major cause of verification delays and customer abandonment. When customers manually type their information, mistakes create mismatches during verification that trigger manual review and slow down the process.
Data pre-fill tools solve this by automatically populating form fields with verified data extracted directly from scanned IDs, eliminating typing errors and improving the customer experience. Advanced systems can also pull verified data from trusted sources like wireless carriers or payment processors, further reducing manual data entry.
Leverage unified, authoritative data sources
Conflicting or outdated information is another common cause of verification delays. When the name on a customer's ID doesn't exactly match the name in a database, or when address information is inconsistent across sources, manual review becomes necessary.
Using unified, authoritative data sources helps eliminate these mismatches. Instead of relying on multiple databases that may contain conflicting information, modern verification systems cross-check data against single-source or carefully aggregated authoritative sources.
This includes databases like the American Association of Motor Vehicle Administrators (AAMVA) for driver's licenses, the Social Security Administration for SSN verification, and trusted third-party providers like LexisNexis for comprehensive identity verification.
By using the most reliable, up-to-date data sources, you reduce false negatives and avoid unnecessary manual review.
The business impact of faster identity verification
Speeding up identity verification isn't just about improving the customer experience. It has measurable business benefits that impact your bottom line.
Faster onboarding directly reduces customer drop-off rates and increases conversion rates, while creating a competitive advantage in digital-first markets where instant approval becomes a key differentiator that helps you win and retain customers.
Automated, AI-powered verification also catches more fraud attempts than manual review while generating fewer false positives, protecting your business and legitimate customers from fraud-related losses. At the same time, operational costs decrease as automated verification requires fewer staff, eliminates manual data entry, and scales efficiently as your customer base grows.
The core result is faster time-to-value, as customers who complete onboarding immediately can start transacting with your business right away, accelerating revenue recognition and improving cash flow.
Best practices for optimizing your onboarding process
Implementing the right technology is crucial, but it's not the only factor in creating a fast, efficient onboarding process. Here are some best practices to maximize your results:
Monitor abandonment rates at each verification step
You can't optimize what you don't measure. Implement analytics to track customer behavior at each step of your onboarding process. Where are customers dropping off? Which steps take the longest? Which verification methods have the highest failure rates?
This data reveals bottlenecks and friction points you might not otherwise notice. Maybe customers are abandoning during document upload because the interface isn't mobile-friendly. Or perhaps liveness detection is failing too often because the instructions aren't clear.
By monitoring abandonment rates and completion times for each step, you can identify specific areas for improvement and measure the impact of changes you make.
Gather customer feedback to identify bottlenecks
Analytics tell you what's happening, but customer feedback tells you why. Implement feedback mechanisms to understand the customer experience from their perspective.
Send post-onboarding surveys asking about pain points and areas of confusion. Monitor customer support tickets related to onboarding issues. Conduct user testing sessions where you watch real customers go through your onboarding process.
This qualitative feedback often reveals issues that don't show up in analytics. Customers might be confused by terminology, frustrated by unclear instructions, or concerned about privacy. Understanding these concerns allows you to make targeted improvements.
Continuously test and refine your onboarding flow
Onboarding optimization is an ongoing process, not a one-time project. Implement A/B testing to compare different approaches and identify what works best for your customers.
Test different verification methods, interface designs, instruction wording, and process flows. Even small changes can have significant impacts on completion rates and customer satisfaction.
For example, you might test whether asking for document verification before or after collecting basic information leads to higher completion rates. Or whether providing a progress indicator reduces abandonment.
Make testing and refinement a regular part of your onboarding strategy. As technology evolves and customer expectations change, your onboarding process should evolve with them.
How 1Kosmos speeds up customer onboarding with rapid IDV
While the strategies above can help any organization improve their onboarding speed, implementing them effectively requires the right technology platform.
1Kosmos delivers complete identity verification in under 60 seconds through a combination of automated document scanning, biometric checks, and authoritative data verification.
Sub-minute verification with 99%+ accuracy: Customers scan their government ID and take a selfie with liveness detection to complete verification instantly. AI and machine learning algorithms achieve over 99% accuracy, far exceeding the 70% accuracy rate of human verification, while detecting sophisticated fraud attempts like photocopies and counterfeit documents.
Global document support: The platform verifies IDs from over 150 countries in thousands of formats, including U.S. driver's licenses, European passports, and national IDs from Asia, Africa, and Latin America. The system automatically recognizes document types and applies appropriate verification checks without requiring customers to specify their document origin.
Flexible integration options: Available as a standalone mobile app or embedded via customizable SDK and 50+ off-the-shelf APIs supporting OAuth2 and OpenID Connect. This allows seamless integration into existing onboarding workflows without rebuilding your entire process.
Multi-layered fraud detection: The system reads PDF 417 barcodes on driver's licenses, extracts MRZ code data from passports, validates NFC chips, and examines security features like holographic overlays and microprinting. Biometric verification uses true-depth camera functionality with randomized facial movements, certified to iBeta PAD2 standards.
Authoritative data verification: All verification data is cross-checked against authoritative sources including the Social Security Administration, AAMVA, LexisNexis, wireless carriers, and payment processors to ensure the highest level of accuracy and fraud prevention.
NIST IAL2 compliance and blockchain-secured storage: The platform meets NIST Identity Assurance Level 2 (IAL2) standards, is FedRAMP High and Kantara certified, and stores all PII encrypted and hashed on a private permissioned blockchain according to W3C DID standards. This privacy-first, zero-knowledge approach eliminates centralized data honeypots while ensuring complete auditability and user control over verified identities.
Closing thoughts
Slow customer onboarding due to identity checks is a solvable problem. By shifting from manual, paper-based verification to automated, AI-powered identity verification, you can complete the entire process in under a minute while actually improving security and compliance.
The key is implementing the right combination of technologies: AI-based document scanning, biometric liveness detection, risk-based routing, data pre-fill tools, and authoritative data sources. Together, these create a verification process that's fast, secure, and frictionless for customers.
1Kosmos brings all of these capabilities together in a single platform that delivers sub-minute identity verification with 99%+ accuracy, support for 150+ countries and 2,500+ ID formats, and compliance with the highest security standards including NIST IAL2 and iBeta PAD2 certification. Not to mention FedRAMP High authorization and Kantara certification, making us one of few CSPs to hold both.
The result is customer onboarding that meets modern expectations: instant, secure, and available anytime, anywhere. No more lost customers due to slow verification. No more competitive disadvantage from outdated processes.
Just fast, reliable identity verification that helps your business grow.
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