From Wallets to Credit: Why Digital Onboarding Can’t Be One-Size-Fits-All

Digital onboarding has become a critical capability across both banking and payments, yet adoption remains uneven and execution complex. While customers increasingly expect instant access to financial services, many institutions still struggle to balance speed, compliance and fraud risk.

Capgemini’s World Retail Banking Report 2025 highlights that customer experience remains a key differentiator, with onboarding journeys often cited as a major source of friction and abandonment.

At the same time, McKinsey’s Global Payments Report 2025 points to the continued growth of digital wallets, real-time payments, and embedded finance — all of which depend on fast, secure identity verification at the point of entry.

For banks, payment providers and fintechs, the challenge is no longer simply digitising onboarding, but designing journeys that reflect the different risk, regulatory and customer experience requirements of each product.

One Market, Two Speeds: Why Frictionless Isn’t Universal

The industry narrative often centres on “frictionless onboarding” — driven largely by the rise of digital wallets, BNPL services and embedded payment experiences.

These use cases prioritise speed and simplicity:

• Minimal data input
• Rapid identity checks
• Immediate access to transact

However, this model does not translate directly to more regulated financial products.

Opening a current account or issuing revolving credit requires:

• Stronger identity assurance
• Compliance with KYC and AML regulations
• More robust fraud controls

Accenture’s Banking Top Trends 2025 notes that financial institutions are increasingly adopting risk-based approaches to onboarding, recognising that different products require different levels of verification and customer due diligence.

The result is a market operating at two distinct speeds:

• Fast, low-friction onboarding for payments and entry-level products
• More sophisticated, layered onboarding for credit and regulated banking services

Designing Tiered Onboarding for Banking and Payments

To address these differences, leading institutions are moving toward tiered or progressive onboarding models.

This approach aligns identity verification with product risk and customer context, rather than applying a single process across all journeys.

Key elements include:

Progressive KYC
Customers can begin with limited access using lighter verification, with additional checks triggered as they move to higher-value or higher-risk products.

Risk-based verification
Advanced analytics and AI assess factors such as transaction behaviour, device data and geography to determine the appropriate level of scrutiny.

McKinsey highlights that AI-driven identity and fraud models are becoming essential in enabling real-time decisioning without increasing friction.

 Event-driven orchestration
Additional verification steps are triggered only when required — for example, when applying for credit or exceeding transaction thresholds.

This model allows institutions to:

• Maintain fast onboarding where possible
• Introduce stronger controls where necessary
• Reuse verified identity across multiple products and channels

Commercial Impact: Conversion, Control, and Customer Trust

Getting onboarding right has direct commercial implications across both banking and payments.

For lower-risk products such as wallets and BNPL:

• Faster onboarding improves conversion and activation rates
• Reduced friction supports higher transaction volumes

For higher-risk products such as credit:

• Stronger identity verification improves decision quality
• Better fraud controls reduce losses and compliance exposure

KPMG’s Intelligent Banking Report 2025 emphasises that balancing customer experience with risk management is now a key driver of competitive advantage.

At the same time, the rise of sophisticated fraud — including synthetic identities and AI-generated attacks — is increasing the importance of robust but seamless identity verification.

This makes onboarding not just an operational process, but a critical trust-building moment in the customer relationship.

Operational Reality: From Automation to Assisted Journeys

Delivering effective onboarding requires more than technology — it requires flexible operational models.

Leading institutions are adopting:

• Automation-first onboarding to handle high-volume, low-risk journeys efficiently
• Assisted onboarding options (branch, agent or call centre) to support more complex cases or underserved segments
• Omnichannel identity reuse, allowing customers to start a journey in one channel and complete it in another without repeating steps

This is particularly important in markets where digital maturity varies, and where inclusion remains a key priority.

About CR2 and HPS

CR2 and HPS support financial institutions in delivering flexible, secure onboarding experiences that span both digital banking and payments.

Their platforms enable institutions to orchestrate onboarding journeys dynamically based on product type, customer context and risk profile — balancing low-friction access for wallets and payment products with stronger verification requirements for regulated banking and credit services.

By combining:

• Sophisticated onboarding orchestration capabilities
• AI-driven identity verification and fraud mitigation
• Omnichannel onboarding journeys
• Real-time decisioning and risk-based verification
• Integration with account and payment activation

CR2 and HPS help institutions align speed, compliance and customer experience across a wide range of onboarding scenarios.

This enables banks and payment providers to reduce friction where appropriate, introduce additional controls when necessary and respond more effectively to evolving fraud and regulatory challenges.

Conclusion

Digital onboarding is no longer a single process that can be standardised across all products.

As banking and payments continue to converge, institutions must design onboarding journeys that reflect the specific requirements of each use case — from instant wallet activation to fully verified credit issuance.

The most effective onboarding strategies are not defined by how fast they are, but by how well they align speed, risk and customer experience.

Smart onboarding is not just frictionless — it is proportionate.

To find out how CR2 and HPS can support your digital onboarding transformation journey, contact the teams at info@cr2.com and sales@hps-worldwide.com