The majority of FIs worldwide lost clients during the past year because of relatively slow onboarding, according to an update from Regtech Fenergo Notably, this is said to be highest rate recorded to date and appears to be a serious issue because UX and frictionless processes must be a priority during times when people have busy schedules and very short attention spans.
The global survey, shared by Regtech firm Fenergo, of 600 senior decision-makers across banking institutions, asset managers and fund administrators revealed that 70% of companies lost clients during the past year due to inefficient onboarding, “up from 67% in 2024 and 48% in 2023.”
Client onboarding abandonment rates now “average around 10%.”
Regulatory pressure worldwide has increased in the past few years.
Fenergo’s 2024 AML fines analysis records $4.6 billion in global penalties in 2024, down from “a record US$6.6bn in 2023 but with North America accounting for 94% of 2024’s total.”
In the first half of 2025, fines “totaled US$1.23bn, a 417% increase on H1 2024 (US$238.6m), driven primarily by actions in North America and a marked uplift in sanctions-related penalties.”
Internally, companies remain cost-burdened and “operationally uneven.”
Average annual spend on AML/KYC operations now stands “at US$72.9m per firm, with UK institutions reporting the highest average at US$78.4m, followed by the US at US$72.2m and Singapore at US$68.2m.”
Overall technology adoption is rising, however, it is happening in an uneven manner.
Reported use of advanced AI tools in KYC/AML has surged from “42% in 2024 to 82% in 2025, with Singaporean firms leading (92%), followed by the US (79%) and the UK (77%).”
Despite this, considerable manual work still remains, with automation of periodic KYC reviews averaging around a third across respondents.
On client onboarding performance, UK corporate banking institutions 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% said yes when asked).”
This has reduced from 87% in the past year.
US based companies, meanwhile, tend to prioritize financial crime as the main AI investment area (65%) but continue to “grapple with high costs and complex in-house technology stacks.”
Across sectors, commercial and corporate banking continues to bear the most considerable onboarding burden.
Asset management firms are now reporting enhanced automation in periodic reviews even though investor drop-off remains significant. Asset servicers tend to face the longest onboarding cycles and also the highest abandonment rates, according to the study.
Fenergo’s latest research report, Financial Crime Industry Trends 2025, examines how FIs across the United Kingdom, United States and Singapore are investing in AI, addressing growing compliance expenditures, and dealing with client lifecycle inefficiencies.
The survey was conducted in August 2025.