Why 60% of Commercial Banking Applicants Never Finish Onboarding

Despite all the innovation happening in fintech, onboarding at most banks still runs on outdated workflows.

A typical experience looks like this: a client fills out an initial form, gets an email requesting additional documents, sends files back and forth, waits days for a response, and repeats the cycle multiple times. Internally, relationship managers are juggling emails, compliance teams are manually reviewing documents, and critical information is scattered across systems.

From the bank's perspective, it's operationally heavy. From the client's perspective, it's exhausting.

And in a world where people are used to instant everything, that gap matters more than ever.

The biggest driver of abandonment isn't lack of interest. It's friction.

Traditional banks often require significantly more steps to complete onboarding compared to fintech platforms. Studies have shown that opening an account with a challenger bank can take fewer than 45 clicks, while traditional bank flows can take anywhere from 70 to over 100 interactions.

Then there's the issue of document collection. Many banks still rely on manual processes for identity verification, requiring customers to upload documents through email, separate portals, or even submit physical copies. This creates delays and uncertainty.

But the biggest problem is visibility. Most applicants have no idea where they are in the process, what's missing, or how long it will take. When that uncertainty builds, they don't wait. They leave.

When an application is abandoned, the cost isn't just that one lost account.

Banks have already spent money acquiring that customer through marketing, sales, or relationship efforts. When onboarding fails, that investment is wasted. More importantly, that customer doesn't disappear. They go somewhere else.

Often, they go to fintechs or challenger banks that offer faster, more seamless onboarding experiences. These platforms are designed to reduce friction, not add to it. They verify identities instantly, guide users through a single flow, and provide real-time updates.

The result is simple: what takes a traditional bank days or weeks can often be done in minutes.

That difference is where market share is being won.

The gap between traditional banks and digital-first platforms became impossible to ignore during COVID.

As branches shut down or reduced hours, banks that relied on in-person verification or manual processes struggled to onboard new customers at all. At the same time, institutions with digital onboarding capabilities continued acquiring customers without interruption.

Almost overnight, the industry split into two categories: banks that could onboard digitally and banks that couldn't.

While many institutions have since started investing in digital transformation, much of it has been reactive. And in onboarding, reacting late means losing early.

Fintechs didn't win by offering more products. They won by removing friction.

They built onboarding experiences that are fast, centralized, and transparent.

Instead of fragmented communication, everything happens in one place. Instead of manual checks slowing things down, compliance processes are automated in the background. Instead of uncertainty, users get clear, real-time progress updates.

This isn't just better design. It's better infrastructure.

And once customers experience that level of efficiency, they don't go back.

Fixing onboarding doesn't require reinventing the bank. It requires fixing the workflow.

The biggest opportunity lies in simplifying how information is collected, verified, and tracked. That means reducing back-and-forth communication, eliminating duplicate requests, and giving both internal teams and clients clear visibility into the process.

Speed matters, but clarity matters just as much. When clients know exactly what's needed and what's happening, they're far more likely to complete the process.

The goal isn't just digital onboarding. It's frictionless onboarding.

The expectation has already changed.

Customers are no longer comparing banks to other banks. They're comparing them to the best digital experiences they've had anywhere. That means onboarding isn't competing with a local branch down the street. It's competing with apps that work instantly and intuitively.

In that world, "a few days" already feels slow.

The institutions that win will be the ones that can onboard customers quickly, transparently, and without unnecessary friction. The ones that can't will continue losing customers before the relationship even begins.