Beyond Compliance: How AI and Biometric Tools Drive Growth, Efficiency and Trust in U.S. Financial Institutions

The fraud arms race always places financial institutions under pressure, and the intensity is rising due to easy access to sophisticated scam tools, accelerated by AI. In the past year alone, scam-related fraud surged by over 50%, with associated losses more than doubling. Basic Know Your Customer (KYC) protocols and manual ID verification meet the regulatory requirements imposed on financial institutions, but they’re not enough to adequately protect consumers from high-tech fraud.

So, banks and financial institutions are adapting. We’re already seeing adoption of advanced technologies like AI-powered identity verification, biometric authentication and document-centric KYC platforms to stop fraud before it happens and stay ahead of the policy landscape. 

While the primary focus might be on avoiding the worst-case scenarios, competitive differentiators are hidden within the protections these methods offer. Financial institutions have the opportunity to look beyond compliance and turn advanced identity verification into the newest layer of customer satisfaction.

Faster Onboarding, Broader Reach, Better Security

People expect frictionless digital experiences now, whether they’re shopping, renting, or banking.

Banking, in fact, has one of the highest abandonment rates in onboarding historically, and 90% of financial institutions report losing potential customers during digital sign-ups due to friction in identity verification or KYC steps. Every abandonment represents lost revenue, and this reality is not lost on bank executives.

Global necessity and customer interest drove banks to pivot hard during the COVID-19 pandemic, making digital onboarding as easy and quick as possible. However, in the race to adapt to customer demand, many financial institutions tried to implement these changes without rethinking their legacy software stacks. These patchwork solutions were not designed to last long-term, even though they fulfilled a vital temporary need. Now, U.S. institutions must pivot again, and we have new tools to deliver customer banking at the intersection of convenience and security.

The message is clear: organizations with legacy processes introduce significant friction for end users who now expect instant gratification. But in the rush to go digital, too many institutions overlook a layered-risk approach—leaving themselves exposed. Orchestration engines offer a more innovative way forward, enabling layered-risk solutions with configurable rules that allow for real-time response instead of reactive mitigation. This balance of security and speed is critical in today’s digital-first economy.

To meet rising expectations, institutions are turning to AI-driven identity verification and document-centric KYC tools that make onboarding almost instantaneous, while orchestrating the layers of protection financial institutions require. New customers can simply snap a photo of their driver’s license and take a selfie, with AI algorithms automatically confirming the ID’s authenticity and matching the live face. For financial institutions willing to make advanced ID verification a market differentiator, the result is stronger security and a smoother experience—making protection a real advantage in a competitive market.