Two out of three people have completely abandoned a digital sign-up process because the identity check was too slow, too intrusive, or required documents they did not have to hand.
Signicat's Battle to Onboard research, surveying 7,600 consumers across 14 European markets, puts the figure at 68%, up from 63% in 2020 and 40% when the study began in 2016. Separately, Fenergo's 2025 Financial Crime Industry Trends Report found that 70% of financial institutions globally lost clients in the past year due to inefficient onboarding, the highest figure since tracking began. The trend is moving in one direction, and it is the wrong one.
For any business that requires age or identity verification as part of its customer journey, these figures represent a direct and measurable cost. Every user who abandons is a lost customer, a wasted acquisition spend, and a signal that the verification step is working against the business rather than for it.
The abandonment figures are not improving. They are deteriorating year on year, even as digital identity technology advances.
Signicat has tracked consumer onboarding behaviour since 2016. The abandonment rate has risen in every edition of their research: from 40% in 2016, to 63% in 2020, to 68% in 2022. Their explanation for this seemingly counterintuitive trend is what they call the "expectation paradox": as digital experiences improve across the rest of people's lives, their tolerance for poor onboarding experiences drops. Faster digital identity systems create higher expectations, and higher expectations mean higher abandonment when those expectations are not met.
Fenergo's data tracks the problem from the business side. Their 2024 survey of over 450 C-level executives found that 67% of banks had lost clients to slow KYC onboarding, up 19 percentage points from 2023. Their 2025 survey of 600 senior decision-makers pushed the figure to 70%, with an average onboarding abandonment rate of approximately 10%, meaning one in ten applicants cancel before completing the process. UK corporate banks reported the slowest onboarding times, often exceeding six weeks.
The costs are substantial. Signicat, working with P.A.ID Strategies, estimated that abandoned financial services onboarding alone costs the European industry approximately 5.7 billion euros per year. Fenergo's research found that the annual cost of performing KYC reviews ranges from $60 million at a corporate and institutional bank to $175 million at a commercial bank. Average annual spend on AML and KYC operations has reached $72.9 million per firm globally, with UK institutions reporting the highest average at $78.4 million.
Signicat's research identifies three primary reasons for abandonment, each cited by 21% of respondents.
Beyond these three primary drivers, 30% of respondents described the application process as "complicated". Younger users showed the least tolerance. People aged 18 to 44 had the highest abandonment rates, and Gen Z in particular showed the strongest resistance to lengthy or unclear processes. For businesses whose primary audience is under 35, this demographic pattern is commercially significant.
The research data tells part of the story. The most revealing evidence comes from what happens when large platforms introduce verification requirements that demand too much of their users.
On 9 February 2026, Discord announced that all users would be placed into a default "teen-appropriate" experience unless they could prove they were adults. For users whose age could not be inferred from account data, this meant either submitting to facial age estimation or uploading a government-issued ID.
Discord has more than 200 million monthly active users. The response was immediate and severe.
Within hours, users began cancelling their paid Nitro subscriptions in sufficient volume that cancellation pages reportedly experienced errors from the traffic. On Reddit, threads condemning the policy attracted thousands of comments. Users posted screenshots of their cancelled subscriptions. One long-time user wrote that they had been paying for Nitro since it launched but would no longer support the company. Another described the policy as "a great way to kill your community."
Searches for "Discord alternatives" surged by 10,000% overnight according to Google Trends data shared widely across social media. Non-age-gated platforms including Matrix, Mumble, TeamSpeak, and Telegram were cited as potential replacements.
The Electronic Frontier Foundation published an analysis on 13 February pointing out that Discord had won their 2025 "Breachies" award after a third-party vendor, identified as 5CA, was compromised, exposing approximately 70,000 government IDs and selfies that had been collected through Discord's verification process. The irony was not lost on users: Discord was asking people to submit the same type of sensitive data that had been breached months earlier.
By 10 February, less than 24 hours after the original announcement, Discord issued a clarification. The company stated that "the vast majority" of users would not need to submit a face scan or government ID, and that an AI-based "age inference model" would estimate most users' ages from account data. The backtrack was significant, but the reputational damage had already occurred.
The Discord case study is instructive for any business implementing age verification. The problem was not that age verification is wrong. It was that the methods offered, face scans and government ID uploads, triggered precisely the resistance that the research predicts. Users did not object to proving they were adults. They objected to how they were being asked to do it.
When the Online Safety Act enforcement began in July 2025, adult content platforms were required to implement age assurance for the first time at national scale. The methods deployed were primarily facial age estimation and document upload.
Proton VPN reported a 1,400 to 1,800 percent sustained increase in daily UK sign-ups in the weeks following enforcement. On the first day, half of the top 10 UK App Store downloads were VPN or identity-related applications. Users were paying for tools to avoid verification rather than completing it.
This pattern carries a double cost for the business. The platform loses the user (and their revenue). And the regulatory objective is defeated because the user accesses the content anyway through a VPN, meaning the verification step protects nobody while costing the business a customer.
An Ipsos study found that 61% of the UK population believed the Online Safety Act would lead to personal data being compromised. This was not anti-regulation sentiment. 80% of adults supported age assurance measures to prevent children from accessing harmful content. The public wanted the outcome. They did not trust the methods being used to deliver it.
Across the research data and the case studies, user resistance to identity verification falls into five broad categories. Understanding these helps businesses evaluate which verification methods will trigger the least resistance.
Verification abandonment is not just a UX problem. It is a revenue problem with quantifiable dimensions.
Direct customer loss. Every abandoned verification is a customer who was ready to sign up, purchase, or access a service and chose not to. If your customer acquisition cost is £50 and your verification abandonment rate is 15%, you are spending £7.50 per acquired customer on people who never complete onboarding. At scale, this compounds rapidly.
Lifetime value destruction. The customer who abandons does not just cost you one transaction. They cost you their entire lifetime value. In subscription businesses, that could be years of recurring revenue. Fenergo's research shows the problem is worsening annually: from 48% of banks losing clients in 2023, to 67% in 2024, to 70% in 2025.
Migration to competitors or unregulated alternatives. Users who abandon do not stop wanting the product or service. They go elsewhere. In crypto and fintech, this means migrating to platforms with less robust verification, including no-KYC exchanges that operate outside regulatory frameworks. The growth of decentralised exchanges, which processed over $700 billion in the first quarter of 2025, is driven partly by users seeking minimal identity requirements.
Circumvention costs. When the Online Safety Act drove a 1,400 to 1,800 percent surge in VPN downloads, it demonstrated that users will spend money to avoid verification they find intrusive. The platform loses the customer. The regulation fails to protect the minor. Nobody benefits.
Brand and reputation damage. The Discord case shows that a poorly handled verification rollout can create a PR crisis within hours. Screenshots of cancelled subscriptions, trending hashtags, and EFF criticism are not costs that appear on a balance sheet, but they damage trust in ways that affect acquisition for months afterwards.
The research evidence consistently points to the same set of principles. The verification methods with the lowest abandonment share common characteristics.
They require no documents. The single largest abandonment trigger is requiring a document the user does not have available. Methods that confirm identity through existing digital infrastructure, whether that is a bank account, mobile network, or digital identity wallet, remove this barrier entirely.
They collect no biometric data. The Discord backlash and Online Safety Act circumvention data demonstrate that biometric collection, particularly face scanning, triggers resistance at a scale that affects commercial outcomes. Methods that avoid capturing photographs, selfies, or facial data sidestep the most emotionally charged objection users have.
They complete in seconds, not minutes. The Signicat data shows users abandon at under 19 minutes and the threshold is falling. But 19 minutes is not the benchmark to aim for. It is the point of failure. Verification that takes 30 seconds operates in an entirely different category from verification that takes 3 minutes. The difference is not one of degree. It is the difference between a step the user barely notices and a step that becomes the reason they leave.
They use familiar interfaces. Trust deficit is a significant driver of abandonment. When a user is redirected to an unfamiliar third-party verification page and asked for sensitive information, they are being asked to make a trust decision under pressure. Methods that work through interfaces the user already knows and already trusts, such as their banking app, remove the need for that trust decision entirely.
They explain what data is shared and what is not. The 92% data concern figure from Signicat shows that transparency matters. Methods that can clearly state "no documents are collected, no photographs are taken, and only a yes-or-no confirmation is shared" address the anxiety directly, rather than asking the user to trust a process they do not understand.
Signicat's Battle to Onboard research, surveying 7,600 consumers across 14 European markets, found that 68% of people have completely abandoned a digital onboarding process at least once. That figure has risen steadily from 40% in 2016 to 63% in 2020 to 68% in 2022. Fenergo's 2025 research found that 70% of financial institutions globally lost clients due to inefficient onboarding, up from 67% in 2024 and 48% in 2023. The average abandonment rate across financial institutions is approximately 10%, meaning one in ten applicants cancel before completion.
Signicat identified three primary reasons, each cited by 21% of respondents: the process took too long, too much personal information was required, and the user changed their mind. A further 38% abandoned because they did not have the required identity documents available at the time. The average time before a user abandons is 18 minutes and 53 seconds, down from 26 minutes in 2020, indicating that consumer tolerance for slow verification is decreasing. Additionally, 30% of respondents described the process as complicated.
Signicat and P.A.ID Strategies estimated that abandoned financial services onboarding processes cost the European industry approximately 5.7 billion euros per year. Fenergo's research found that the annual cost of performing KYC reviews ranges from $60 million at a corporate and institutional bank to $175 million at a commercial bank. Beyond direct costs, verification friction drives users to competitors, unregulated alternatives, or circumvention tools. When the UK Online Safety Act enforcement began, VPN downloads in the UK surged by 1,400 to 1,800 percent as users paid to avoid face scans and document uploads rather than completing them.
The evidence points to three principles for reducing abandonment. First, minimise what the user has to do: methods that require no documents, no photographs, and no app downloads remove the most common abandonment triggers. Second, use familiar interfaces: verification that works through systems the user already knows and trusts reduces the resistance that drives drop-off. Third, complete the check quickly: the average user abandons at under 19 minutes, so any verification step that adds minutes rather than seconds to the journey is a measurable conversion risk.
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