Zhang Yi is Head of Product for eKYC and Identity Solutions at ADVANCE.AI, where he leads the development of AI-powered digital identity and compliance platforms. With 7 years of experience in Regtech domain, he has partnered with banks, fintechs and regulators etc. to deliver solutions that streamline onboarding and strengthen AML/KYC compliance.
At ADVANCE.AI, he drives product innovation for AdvanGuard, the unified platform for identity verification, AML, and fraud defence across global markets. His expertise spans identity proofing, AML compliance and risk management , and he is passionate about adopting LLM based AI to resolve real life problems.
Fragmented KYC: Why It’s Costing Businesses More Than They Realise
In almost every conversation I’ve had with banks and fintechs over the past year, the same frustration surfaces: fragmented KYC onboarding journeys. One compliance head described their process as “a patchwork of disconected KYC APIs,” while another admitted they were losing up to 25% of customers during digital onboarding because customers had to re-upload documents across different systems. This isn’t an isolated issue—since 2016, employee hours spent on AML / KYC compliance have surged by over 60%, and IT budgets allocated to compliance functions have grown roughly 40%, reflecting how much effort and cost these fragmented systems demand.
What started as a “good enough” approach to digital transformation has become a competitive liability. The assumption that combining “best-of-breed” point solutions would produce optimal outcomes has proven not just wrong, but dangerously expensive.
Why fragmented KYC is no longer sustainable
When I first started working with clients on digital onboarding, the “multi-vendor” approach was in fact the norm. You picked the best point solutions — one for ID verification, another for AML, another for biometrics — and stitched them together. But now, there are cracks in this model that are impossible to ignore.
Integration Debt Compounds Exponentially
Each additional vendor doesn’t just add linear complexity—it creates exponential technical integration debt in KYC systems. I’ve worked with firms spending 6-8 months integrating up to four vendors, only to discover that their mobile app now requires 3 different SDKs just for identity verification. The result? Customer complaints about app storage space, slower load times, and ultimately, onboarding abandonment before completion.
The 25% Abandonment Reality Gets Worse
Industry observations consistently show that legitimate customers—not identity fraudsters—are the ones dropping off mid-process. When I dig into the data with clients, we find that customer abandonment rates during onboarding can reach up to 40% when processes involve multiple document uploads and system handoffs. You’re not just losing bad actors; you’re also losing your target market.
Revenue Impact Beyond Customer Acquisition
Consider this: if you’re spending $200 per customer acquisition and losing 25% to onboarding friction, you’re effectively paying $267 for every successful conversion. Scale that across thousands of monthly applications, and fragmented KYC isn’t just an operational issue—it’s destroying unit economics.
What’s driving the shift toward unified onboarding?
Fraud has Industrialised
The Financial Action Task Force (FATF) 2023-2024 annual report highlights the increasing sophistication of financial crimes, with fraudsters exploiting gaps between verification systems. When your ID verification provider passes a synthetic identity that your AML system flags, but there’s no real-time correlation between the two, you’re essentially running compliance theater.
The Regulatory Reality Check
Global KYC/AML regulators, including Singapore’s MAS, have intensified their focus on compliance oversight and audit trail requirements. Regulators aren’t just asking for compliance—they’re demanding demonstrable, auditable workflows. When regulatory bodies audit your processes and you have to reconcile data from five different systems, you’re already in trouble.
The Customer Expectation Gap
Global adoption of seamless digital identity verification demonstrates clear customer preference for streamlined processes. In Singapore, Singpass has achieved 97% adoption among eligible citizens. Meanwhile, Estonia has taken its entire suite of government services online, with nearly 8 in 10 citizens saying these digital services make life more convenient.
In key Asian markets, momentum is accelerating rapidly: the Philippines achieved 90 million registrations (97.8% of its 2024 target) for its National ID system as of September 2024, with Asia United Bank reporting 94,000 users onboarded through National ID authentication since launch. Indonesia shows a similar trajectory with 18 million citizens switching to its digital identity app (IKD) as of December 2024, while the country’s e-KYC adoption rate for new banking accounts grew from 20% to over 60% between 2018 and 2022. When your process requires document re-uploads across multiple systems, you’re not just slower—you’re moving against the tide of digital transformation that customers increasingly expect.
Technical Debt Reaches Critical Mass
Every integration point is a potential failure point. Even small cracks compound at scale: one leading BNPL firm in Asia with over US$2 billion in annual GMV estimated that a 1% drop in onboarding conversion could translate into tens of millions in indirect GMV loss annually. That’s because every user who fails to complete onboarding is one less customer generating downstream transactions. At scale, this leakage compounds — not only in lost revenue potential, but also in weakened growth momentum and merchant confidence. In fact, more than 60% of banking customers in Asia-Pacific expect digital services to be available 24/7, making every failed sign-up a measurable dent in future earnings.
What Firms Stand to Gain
The shift to unified onboarding platforms offers more than just compliance relief—it unlocks tangible operational, strategic, and financial advantages. By consolidating fragmented systems, firms can streamline workflows, enhance intelligence, and create predictable, scalable processes that deliver measurable ROI across the organization.
Operational Efficiency at Scale
Financial institutions manage complex vendor ecosystems, with some working with over 1,000 third-party vendors or managing more than 10,000 vendor relationships. For KYC specifically, this fragmentation creates a “complexity tax” where firms spend disproportionate resources on coordination rather than core objectives. Unified platforms eliminate this overhead, allowing compliance teams to focus on risk assessment rather than vendor management. The reduction in operational overhead—from contract negotiations to security assessments—often justifies the transition cost within the first year.
Enhanced Risk Intelligence
When verification components operate within a single platform, they create data relationships impossible with fragmented solutions. Document analysis can immediately inform behavioral scoring, device fingerprinting can adjust AML sensitivity in real-time, and biometric validation can correlate with geographic risk indicators. This integrated intelligence dramatically improves both fraud detection and legitimate customer experience.
Regulatory Resilience
Complete audit trails become strategic assets rather than compliance burdens. Unified platforms enable real-time demonstration of decision provenance, making regulatory examinations smoother and building trust with supervisory authorities. This translates to faster approval processes for new markets and products.
Economic Predictability
Beyond vendor consolidation, unified platforms offer economic advantages including single security assessments, streamlined legal agreements, consolidated SLA management, and predictable pricing that scales with business growth rather than integration complexity.
Why We Built AdvanGuard
This is why we built AdvanGuard at ADVANCE.AI. It wasn’t about adding “yet another tool” — it was about replacing a fragmented model with a pre-orchestrated, compliance-ready framework designed for speed, scale, and security. Clients told us they were tired of jigsaw puzzle onboarding. AdvanGuard is our answer to that frustration.
AdvanGuard is that one platform
A full-stack, AI-powered shield for trust, compliance, and fraud defence. AdvanGuard unites identity verification, AML, KYB, KYT, non-document checks, travel rule compliance, fraud prevention, and risk intelligence into one seamless, AI-driven flow. Instead of juggling multiple vendors, firms get one fully integrated solution — faster verification for legitimate users, real-time fraud detection, and compliance with the toughest global regulations.
One call is all it takes. Every capability is already built to work beautifully together, fully integrated and optimised to deliver instant verification, faster approvals for legitimate users, and fraud prevention in milliseconds, all while meeting the toughest global regulations.
AdvanGuard Identity Verification streamlines the entire identity verification process into one unified, AI-driven flow. Each layer – document, biometric, and risk is intelligently connected to verify not just the claimed identity, but the real person behind it.
AdvanGuard's Measurable Impact
- Speed: One API instead of five, cutting integration timelines by as much as 70%
- Cost optimisation: Elimination of overlapping solution costs and integration overhead
- Global scalability: Seamless coverage across 200+ jurisdictions without patchworking providers
- Advanced fraud resilience: Real-time correlation enabling detection of sophisticated attacks like deepfakes and device spoofing
The Cost of Standing Still
When I reflect on all the conversations I’ve had with clients, one lesson stands out: fragmented KYC is not a technology decision, it’s a business one. Stick with patchwork systems, and you’ll pay the price in higher costs, lost customers, and regulatory risk.
Unified onboarding platforms such as AdvanGuard are already showing what the future looks like: faster sign-ups, lower costs, stronger compliance, and a frictionless onboarding experience that builds digital trust from day one.
My advice to product leaders: Don’t wait until regulators — or competitors — force the change.
In my view, the real uncomfortable question isn’t “Can we afford to switch?” but “Can we afford not to?”