Introduction
The stretch between a user first opening a banking app and actively using their account is the stage of the entire product lifecycle with the highest abandonment rate. KYC (know your customer) processes, identity verification steps and legal consents all complicate the user experience — and none of them can be dropped.
Sector data shows that a significant share of users who begin onboarding in digital banking apps leave before completing it. Most of that abandonment comes not from the legal requirements themselves but from a poorly designed experience. A well-designed onboarding flow makes those mandatory steps feel like a secure setup process rather than an obstacle.
In this article we take each stage of onboarding — from first impression to the moment the account goes into active use — and examine the concrete design decisions that reduce abandonment.
A widely shared observation in the sector: friction in the first three minutes of onboarding is more decisive than friction across all the steps that follow. First impressions therefore deserve disproportionate priority in the design of the whole process.
Making Mandatory Steps Understandable
Steps such as identity verification and address entry raise suspicion when presented without explaining why they are needed. A short line at the start of each step ("We're required to ask for this by regulation") makes the process easier for users to accept.
It matters that these explanations come as a single plain sentence rather than a long legal text. When a user understands why they are sharing information, the process looks reasoned rather than arbitrary — and they are less likely to give up.
The timing of these explanations matters as much as their tone. Showing information long before the user needs it, or long after the form is filled in, greatly reduces its effect.
Using a Progress Indicator
However many steps onboarding has, show the user clearly. Progress bars or step counters let the user see the end of the process and raise completion rates.
It is critical that the progress indicator is honest; if a user sees they have reached 80% and then discovers the process is far longer, the disappointment can be more damaging than the original uncertainty. The number of steps must therefore be calculated in advance to reflect the real complexity of the process.
Some products deliberately leave the progress indicator vague, with general phrases like "almost done"; this may keep the user going in the short term, but when it doesn't match reality it costs trust.
Making Document Upload Easier
At steps such as photographing an ID document, real-time feedback — a blur warning, framing guidance — stops the user repeating the same step over and over. Technical details like this have a measurable effect on onboarding completion.
A short visual guide showing how to hold the camera and set the light raises the rate of successful first-attempt uploads. Without it, a user can repeat the same mistake without understanding what went wrong, and abandon the process.
Telling the user to "take a clear photo" is not enough at the document upload step; a short example image with concrete guidance on light, angle and background reduces the error rate significantly.
Turning Waiting into an Experience
Some steps, such as identity verification, can take minutes in the background. Rather than an empty loading screen, short pieces of information about the value the product offers shorten the wait as the user perceives it.
These waiting screens are also an opportunity for cross-sell or product education: other features of the app can be introduced briefly while verification runs. Dead time becomes an active moment of information.
When the content on a waiting screen stops being a generic animation unrelated to the product and becomes a concrete preview of features the user is about to use, the wait is perceived as preparation rather than lost time.
Reaching the First Value Moment Faster
Having the user experience the product's real value immediately after opening an account — checking a balance, making a first transfer — strengthens post-onboarding activation. The longer the "aha moment" takes, the higher the abandonment rate.
Some banking apps accelerate that value by giving early access with limited functionality (small-value transfers, for example) before the account is fully activated. The approach keeps the user engaged while full verification completes.
Product teams pushing to reach the first value moment faster can sometimes overlook security or compliance risk; early access models should therefore be designed together with the risk team, clarifying which operations can safely be offered under limited access.
Recovering Abandoned Onboarding
A significant share of users leave onboarding partway through and close the app. A gentle reminder by email or push notification at that point can encourage them to pick up where they left off.
It matters that reminder messages send the user back to the exact step they stopped at, not to the beginning. If they have to redo steps they already completed, the abandonment rate on the second attempt can be even higher than the first.
The frequency of reminders for abandoned onboarding needs careful calibration too; reminding too often irritates users and can push them to turn notifications off entirely.
Common Mistakes and How to Avoid Them
A common mistake is designing the entire onboarding flow within a single product team and taking it to compliance for approval afterwards. That sequence often means large parts of the design get rebuilt at the approval stage.
Another is limiting onboarding metrics to "completion rate" alone. Without more detailed data — how long is spent on each step, how often users go back — the real reason behind drop-off points stays hidden.
Frequently Asked Questions
At which step does most onboarding abandonment occur?
The highest abandonment rates are generally seen at ID document upload and biometric verification; these steps create both technical and psychological friction.
Can the KYC process be shortened?
The legal requirements cannot be shortened, but the perceived duration can be reduced considerably through how the steps are presented, real-time feedback and clear explanations.
How is onboarding completion rate measured?
A funnel analysis showing how many users move from each step to the next lays out the drop-off points clearly.
When should reminder notifications be sent during onboarding?
A single gentle reminder a few hours after abandonment generally produces a higher return rate than aggressive, frequent notifications.
Conclusion
The common thread SameUp observes across its financial sector projects is that onboarding design is the art of striking a balance between legal requirements and user experience.
Products that get that balance right can meet compliance and growth goals at the same time. If you would like to assess your own onboarding flow against these principles, we can arrange a review session with the SameUp team.