The number of financial firms saying that onboarding clients suffered abandonment has risen, suggesting that the compliance headache remains significant.

At a time when rising compliance burdens – and heavy fines for miscreants – are weighing on minds, there’s fresh evidence that the onboarding ordeal is hitting revenues.

An international survey by Dublin-headquartered Fenergo, which provides client lifecycle management and compliance solutions, finds that a record 70 per cent of financial institutions said they lost clients in the past year because of slow onboarding. In 2024, 67 per cent gave this answer, up from 48 per cent the year before.

Fenergo took its responses from 600 decision-makers at banks, fund administrators and asset managers around the world. Fenergo’s report, Financial Crime Industry Trends 2025, analyses how financial institutions across the UK, the US and Singapore are investing in AI, managing compliance costs, and addressing client lifecycle inefficiencies. The survey was conducted in August. 

Abandoning the effort
The onboarding pain means that some people never make it to being a client. On average, client onboarding abandonment rates are 10 per cent.

Perhaps, unsurprisingly, a firm such as Fenergo, which uses modern digital technology, is keen to point out that such tools are essential for easing the burden.

“Financial institutions are in an arms race to modernise compliance. The sheer cost of operations, averaging nearly $73 million per firm, coupled with record percentage of firms experiencing client abandonment shows that old approaches are no longer sustainable,” Tracy Moore, director of strategic thought leadership and regulatory affairs, Fenergo, said. 

“To keep pace, firms need to embed intelligence into every layer of their client lifecycle: streamlining onboarding, scaling periodic reviews, and ensuring data is regulatory-ready at all times. To that end, AI has become the critical lever for resilience, efficiency and competitiveness,” she said.

Regulatory pressure worldwide has intensified. Fenergo’s 2024 AML fines analysis records $4.6 billion in global penalties in 2024, down from a record $6.6 billion in 2023 but with North America accounting for 94 per cent of 2024’s total. In the first half of 2025, fines totalled $1.23 billion, surging by 417 per cent on the first half of 2024, driven primarily by actions in North America and a marked uplift in sanctions-related penalties.

Internally, firms remain cost-burdened and operationally uneven. Average annual spending on AML/KYC operations now stands at $72.9 million per firm, with UK institutions reporting the highest average at $78.4 million, followed by the US at $72.2 million and Singapore at $68.2 million.

This publication has spoken to a variety of firms, finding that vetting clients’ source of wealth is becoming ever more detailed and demanding. In Singapore, for example, the city-state’s major money laundering scandal of 2023 has prompted authorities to clamp down on suspected illicit financial flows. Unfortunately, it has also affected onboarding times. 

Uneven tech adoption
In other findings from its report, issued yesterday, Fenergo said technology adoption is rising but uneven. Reported use of advanced AI tools in KYC/AML has surged from 42 per cent in 2024 to 82 per cent in 2025, with Singaporean firms leading (92 per cent), followed by the US (79 per cent) and the UK (77 per cent). Even so, significant manual work remains, with automation of periodic KYC reviews averaging roughly a third across respondents.

On client onboarding performance, UK corporate banks report the slowest times, averaging more than six weeks, while Singaporean institutions are fastest but paradoxically are more likely to lose a client due to slow and inefficient onboarding (76 per cent said yes when asked). However, this has reduced significantly from 87 per cent in 2024. 

US firms, meanwhile, prioritise financial crime as the top AI investment area (65 per cent) but continue to grapple with high costs and complex in-house technology stacks, Fenergo said.

Across sectors, commercial and corporate banking continues to bear the heaviest onboarding burden. Asset managers report improved automation in periodic reviews although investor drop-off remains substantial. Asset servicers face the longest onboarding cycles and the highest abandonment rates.

“In the UK, enforcement trends mirror the survey’s findings. The [Financial Conduct Authority] imposed over £49.1 million in fines across sectors in 2024, more than triple the previous year, highlighting its sharper focus on transparency, customer due diligence and transaction monitoring,” Moore said.