KYC, KYB, onboarding and compliance: discover how to integrate customer and business verification into the user experience without compromising it. 

In embedded finance projects, compliance is often perceived as a constraint. It comes into play at a critical moment, requires supporting documents, slows down activation and can create friction in the user journey. As soon as a product integrates financial services (payments, financing, etc.), it may become necessary to verify the identity of users, businesses or their ultimate beneficial owners. 

This is where KYC (Know Your Customer) and KYB processes. 

The challenge is easy to formulate, but difficult to implement: How can you meet compliance requirements without compromising the user experience? How can you secure onboarding without reducing conversion rates? How can you integrate the necessary checks without turning onboarding into a burdensome administrative process? 

The answer comes down to one idea: compliance should not be added as an afterthought. It should be considered from the very beginning of product design.

KYC and KYB: What Are We Talking About? 

The KYC (Know Your Customer) refers to the processes used to identify and verify an individual customer. This may include identifying the person, verifying their identity, understanding the business relationship and, depending on the circumstances, carrying out additional checks.  

The KYB processes , on the other hand, applies to businesses. It aims to establish what the company is, who represents it, who controls it, what its business activity is and, where necessary, who its Ultimate Beneficial Owners (UBOs) are.. 

In everyday language, the terms KYC and KYB are often used as operational shorthand. In practice, they encompass broader obligations relating to customer due diligence, ongoing monitoring, anti-money laundering and counter-terrorist financing (AML/CTF), as well as risk monitoring. 

The question is therefore not simply: What documents should we ask for? 

The real question is rather: at what point, to whom, why, according to what level of risk and with what user experience? 

Therefore, for a platform, the question is not simply: What documents should we ask for?

The real question is: When should we ask, who should we ask, why, based on what level of risk, and with what kind of user experience?

Why KYC/KYB is Becoming Central to Integrating Financial Services into User Experiences

Embedded finance involves integrating financial services into environments that are not traditionally associated with banking: business management software, SaaS platforms, marketplaces, ERP systems, applications, e-commerce platforms, and more. 

Financial services come with responsibilities. It is necessary to know who is using the service, for what purpose, for what amounts, in which country, for what type of business activity, and with what level of risk.. 

The topic is also directly connected to the user experience. If too much information is requested too early, users may abandon the process. Conversely, if the right information is not requested at the right time, the service cannot be properly activated. 

Compliance therefore becomes a product matter in its own right, rather than simply a legal or regulatory issue..

The Trap: Treating Compliance as a Separate Step

Many onboarding journeys fail for one simple reason: compliance is treated as a barrier.. 

The user discovers the product, starts the registration process, and then suddenly faces a request for supporting documents, an identity check, an undefined waiting period or an unclear message. The journey breaks. Conversion takes a hit. Support receives new requests. And the user does not understand why they are being blocked. 

This approach creates three negative effects.. 

First, it increases abandonment. A user who does not understand why they are being asked to provide a document may perceive the service as too complex and simply give up. 

Second, it undermines trust. Poorly explained compliance is perceived as an administrative obstacle rather than as a security mechanism. 

Finally, it slows down activation. The product may be technically ready, but remain unusable until the user has completed the verification process. 

The goal is not to eliminate compliance. It is to integrate it into the user journey in a seamless, progressive and understandable way..

The Right Approach: Progressive and Contextualized Compliance

An effective onboarding process does not ask everyone for everything right from the start.. 

It adapts the level of verification to the use case, risk level, type of user, service being activated, and stage of the journey.. 

This is what we can call progressive compliance. This approach helps preserve conversion. 

Users can first understand the product, try it out and experience its value — the same principle applies to the user experience in face-to-face sales — and then provide the required information when they want to activate a financial feature such as deferred or split payments. At that point, the compliance request feels more legitimate because it is directly connected to a specific action.. 

The wrong message is: “You need to complete your application."

The right message is: “To activate this deferred and split payment feature, we need to verify certain information to secure your transactions and comply with the applicable regulatory requirements."

KYB: The Real Critical Point in B2B Experiences

KYB is more structurally complex than KYC. 

Verifying a business is more complex than verifying an individual. You need to identify the company, understand its business activity, confirm its existence, verify its representatives, review its documents, identify its ultimate beneficial owners (UBOs) when required and, in some cases, collect additional information.. 

This is precisely where many B2B onboarding journeys become complicated. 

A user may register on behalf of a company without knowing exactly which documents to provide. They may not be the legal representative. They may need to forward the request to a director or authorized representative. They may become stuck because they do not understand the role of the ultimate beneficial owner. They may also abandon the process when they are asked to provide too many documents, too early. 

A good KYB journey must therefore be designed around the reality of how businesses actually operate.. 

It should distinguish between: 

  • the user creating the account, 
  • the company using the service, 
  • the legal representative or authorized person, 
  • the ultimate beneficial owners, 
  • the required documents, 
  • access rights to the platform and the service. 

Onboarding should not assume that a single person has access to all the information required..

The Ultimate Beneficial Owner: A Concept That Needs to be Explained Simply

The concept of the ultimate beneficial owner can be difficult for a non-specialist user to understand. Yet it is central to many KYB journeys. 

In simple terms, the ultimate beneficial owner refers to the individual or individuals who directly or indirectly control a company, according to the applicable criteria.The objective is to understand who is ultimately behind the business. 

The mistake would be to ask this question without providing any explanation. A user may legitimately wonder: “Why are you asking me for this information when I’m simply registering a company?" 

It is therefore important to explain that this information may be required for security, compliance and the prevention of abuse of the financial system.. 

A good user journey should make this step understandable without trivializing it.. 

The explanation should be short, clear and provided at the right moment. Users should understand what is being asked of them, why the information is required and what will happen next..

Compliance Should Not Break the Product or User Experience Promise

Companies generally sell a promise of simplicity. If integrating financial services turns that promise into a lengthy and complex journey, the impact can be negative. 

The goal is therefore not to pile controls onto the user journey. It is to integrate the necessary checks without disrupting the logic of the experience.. 

This means working on several dimensions: 

  • the order of the steps, 
  • the level of information requested at each stage, 
  • the wording used,
  • the design of statuses, 
  • follow-ups and reminders, 
  • notifications, 
  • support, 
  • error handling, 
  • validation times, 
  • the ability to resume the journey where it was interrupted. 

A good onboarding experience for financial services should answer three questions that users implicitly ask themselves: : 

  1. Why are you asking me for this information? 
  2. How long will this take? 
  3. What will this allow me to activate? 

When these three answers are clear, friction becomes much more acceptable.

The Role of Statuses: Eliminating Uncertainty

One of the most frustrating aspects of a KYB journey is uncertainty.. 

A user who submits their documents without knowing whether their application has been successfully received, is under review, is incomplete, has been rejected or has been approved can quickly disengage. They may contact support, abandon the process or lose trust in the user experience. 

Statuses therefore become a genuine product component.. 

Ideally, a platform should be able to display simple and explicit statuses: 

  • Application to be completed 
  • Information received 
  • Verification in progress 
  • Document needs correction 
  • Verification completed 
  • Feature activated 
  • Additional verification required 

These statuses must be clear and actionable. Simply displaying “rejected” or “pending” is not enough. Users need to understand what they need to do to move forward..

KYB APIs: Integrating Compliance Without Exposing Its Complexity

API-based integration makes it possible to connect the necessary checks without forcing users to leave their existing environment.. 

Users remain within the customer journey. The company’s platform retains the customer relationship, interface, business context and the logic behind the use or sale of the service. The underlying components handle verification, statuses, rules, follow-ups and the technical elements associated with the process. 

The benefit is twofold: 

  • For the user, the experience remains smoother., 
  • For the company, the onboarding is easier to control, more scalable and better aligned with the overall user experience.. 

Reducing Friction Without Lowering Requirements

Let’s be clear: optimizing onboarding does not mean weakening compliance.. 

Conversion should never come at the expense of security, due diligence or compliance with the applicable regulatory framework. A company integrating financial services into its user experience must accept that some users may not be approved, that certain applications may require additional information, or that certain use cases may need to be rejected. 

The right approach is to reduce unnecessary friction, not necessary requirements.. 

One Useful friction is a step justified by risk, regulation or security. 

One Unnecessary friction is a step that is poorly positioned, poorly explained, redundant or disproportionate. 

The distinction between the two is critical..

Onboarding and Conversion: The Metrics to Track 

A KYB journey should be measured like any other user journey.. 

Relevant metrics include: 

  • onboarding start rate, 
  • completion rate, 
  • abandonment rate at each stage, 
  • average verification time, 
  • number of rejected documents, 
  • main failure reasons, 
  • volume of incomplete applications, 
  • return rate following a reminder, 
  • number of support tickets related to compliance, 
  • financial feature activation rate following verification. 

These metrics help identify where the journey breaks down.. 

For example, if many users abandon the process when identifying the ultimate beneficial owner, this may indicate an educational or UX issue. If a large number of documents are rejected, the instructions may be insufficient. If verification timelines are poorly understood, the status messages may need to be improved. 

Compliance then becomes a genuine lever for improving the user journey.. 

What RollingFunds Can Bring to the Table

RollingFunds develops financial infrastructure designed to facilitate the integration of deferred and split payments into the environments of large companies and mid-sized enterprises. 

For these companies, the challenge is not purely technical. It is about designing an end-to-end journey : activation, verification, statuses, payments, tracking, reconciliation, monitoring and reporting. 

RollingFunds can support these companies in assessing use cases where KYB can be seamlessly integrated into the user journey.. 

The goal is not to turn every company into a financial institution. It is to enable the integration of KYB compliance management and deferred/split payment capabilities within an appropriate framework,with a smoother user experience and clearly defined responsibilities.

How to Design Compliant and High-Performing Onboarding 

The approach can be summarized in seven steps: 

  1. Identify the financial features that are actually involved. 
  2. Determine which users need to be verified: individuals, businesses, representatives or ultimate beneficial owners. 
  3. Adapt the level of information collected to the use case and level of risk. 
  4. Position checks at the point where they become necessary. 
  5. Explain each step using simple, accessible language. 
  6. Integrate statuses and follow-ups directly into the interface. 
  7. Measure abandonment, verification times, errors and activation rates. 

This approach makes it possible to build a smoother journey without circumventing applicable requirements..  

Conclusion: Compliance Should Not Kill Conversion

KYB and onboarding should not be designed as obstacles disconnected from the user journey. They should be integrated into the user experience from the very beginning of the design process.. 

For mid-sized and large companies, the challenge is to find the right balance: enough compliance to secure transactions and comply with the applicable framework; enough simplicity and fluidity to preserve adoption and conversion.. 

A good user journey does not eliminate the necessary checks. It makes them understandable, progressive and meaningful.. 

This approach can turn compliance into a competitive advantage : less unnecessary friction, greater trust, higher activation and deeper use of the service.