Neobanks have built their reputation on speed. Customers expect to open an account from a phone in minutes, without a branch visit, a stack of paperwork or a multi-day wait. But that expectation sits awkwardly alongside a harder truth: onboarding is also the moment when forged documents, stolen or synthetic identities, mule accounts and sanctions exposure are most likely to slip through.
According to Identomat, the fix is not to strip out checks, but to apply them more intelligently. A well-designed onboarding flow should wave straightforward applications through quickly, while reserving deeper scrutiny for cases where risk signals actually justify it.
Onboarding typically starts with basic registration, before the neobank verifies identity, screens against sanctions and PEP lists, assigns a risk rating and decides whether to approve automatically or escalate for review. Passing a document check is not the finish line; a genuine document does not guarantee the applicant is who they claim to be, or that the account will be used legitimately.
That is why remote onboarding increasingly blends document verification, face matching, liveness detection, AML screening and customer due diligence, in line with the European Banking Authority’s remote onboarding guidelines.
Much of the friction customers experience is not regulatory at all, but a symptom of poor workflow design. Treating every applicant the same, regardless of risk, either over-burdens low-risk users or under-scrutinises higher-risk ones. Blurry uploads, vague “verification failed” messages and repeated data entry all add unnecessary drop-off, while overloaded manual review queues slow down otherwise straightforward cases.
Cutting corners is not the answer. The UK Financial Conduct Authority has warned repeatedly that rapid customer growth can outpace financial crime controls, and its review of challenger banks found weaknesses in risk assessment, due diligence and transaction monitoring.
In 2025, the FCA fined Monzo more than £21m over historic financial crime control failings, a reminder that growth, risk management and operational capacity need to scale in step.
The alternative is risk-based onboarding: automated checks for low-risk applicants, targeted follow-up questions for medium-risk cases, and enhanced due diligence, video verification or manual review for higher-risk ones. Clearer upfront guidance, real-time feedback during document capture, pre-filled data from OCR, and secure fallback routes for edge cases can all reduce friction without loosening controls.
Fraud prevention should combine document authentication, face matching, liveness detection, device and behavioural signals, and AML screening, since no single check catches everything.
Manual review should remain the exception, not the default, reserved for cases automation cannot resolve confidently. And since risk can shift after approval, onboarding should feed into ongoing KYC, screening and transaction monitoring rather than ending at account opening. Providers such as Identomat position their configurable workflows, combining verification, biometrics, screening and risk rules, as a way for neobanks to manage this balance.
Read the full Identomat post here.
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