As recently designing the KYC and onboarding through the web application process in several south European markets, I researched what similar experience the challenger banks are creating. Working directly with the European market I have looked into challenger banks apps and digital products mainly from Atom, Revolut, Starling, N26, Monesse, & Monzo. My main point of interest was their KYC process and how each of them deals with local regulations and user experience on this user tedious but highly regulated process.

KYC (Know Your Customer) requirements

As various internet sources say, KYC is the process of identifying and verifying the identity of a customer, understanding the relationship between the customer and the bank, and assessing any financial crime risks associated with that customer.

You can think of KYC as a kind of user identity and verification process. The major part is automized by the technology, but in some cases neobanks declare they ask human intervention if their Machine learning algorithms are not capable to identify some corner cases. The majority of the banks declare they check the following:

Email address, First name, Last name, Country where you live, Date of birth, Password, Phone number (can be from any country, but not a virtual number like Google Voice), Mailing address (to send a physical card).

AML (Anti-money Laundering) laws

More recently, in response to major events such as the global financial crisis KYC have evolved to include a more detailed understanding of risks such as sanctions, politically exposed related parties and ultimate beneficial ownership in the case of legal entities.

Anti-money laundering could be understood as a user check required by international legislation to prevent suspicious transactions by the users of the financial institution. The major AML checks every bank declare they do are the screening against PEP (politically exposed persons) & Sanctions list (i.e. terrorist or criminals lists).

For this, they analyze and request (some of them at the process of application, Monzo declares of having a continuous screening process) user data: gender, job title, and industry, city of birth, nationality, tax residency & tax ID number where you’re tax resident.

Traditional banks

At the majority of high street banks, KYC starts when you open a new account. You go into a branch are asked to answer questions like “What do you do for a living?” and “How do you intend to use your new account?” While this helps banks fulfill their KYC requirements, it can also lead to an inconvenient and time-consuming experience for you. According to a report by Thomson Reuters, an average new customer onboarding times have risen from 28 days in 2016 to 32 days in 2017.

Challenger banks

European challengers banks such as Monzo, N26, Revolut, Atom, Starling, and Monese offer full in-app processes, which make account opening almost instantaneous. They have embraced new technologies for online identification purposes, such as video-identification or photographing ID documents, accompanied by a verification payment and all of them claim that account opening takes between 3 to 10 minutes.

Challenger banks though each of them declare their unique and super simple KYC or user onboarding process, comparing them to each other, I found so many significant differences neither from UX nor from legal interpretation perspective. Here I have to mention that we can split customer onboarding to the following steps: Know your customer or KYC and Anti-money Laundering or known as AML.

Below I Have extracted some unique features or approach to KYC implementation per each of the challenger-bank.


KYC is an ongoing process, that begins when you sign up for a Monzo account and continues throughout the course of our relationship. At some point it can ask you a few questions or for some extra information like the range your salary falls into, or whether you have any kids or other dependants. You could also be asked to give a clearer picture about a particular transaction if it is much higher than your regular ones like a transfer £20,000 into your Monzo account because you plan to pay down a deposit for your new house. Similarly, about the transactions related to cryptocurrencies as a few have been using their Monzo accounts to trade them.

Monzo does not require to provide your address because verification is possible through your birthday instead.


N26 is a pan-European bank and anyone can open a N26 Bank account, as long as they are resident in the EU or EEA. In order to open an account, you need a mailing address in one of the countries where N26 operates.

KYC process requires the user to find a few minutes in a quiet place with good lighting conditions to have a quick video call — you will be interacting with a human being to verify your identity behind the device (mobile phone). Video verification possible between 8 am and midnight German time. During the call, you will be asked to verify a few details from your registration form, as well as typing in a code sent to the phone number you registered with. You will also be asked to show your ID document to the camera in different angles so that the agent can verify that it’s legit.


Revolut uses the room that is provided by legislation to allow customers to open restricted accounts without the need for identification, limiting transactions to a total of € 250. If transactions exceed this limit you go on standard Revolut KYC process.


Anyone can open an account from the EU area. A lot happens in the background as automatically there is a crosscheck of thousands of data points and reliable partners to obtain matches on your full name, registered to that address. These data sources are updated on a very regular basis so it does not take long for records to show. You can open an account based on a former address, as that address will be linked to your credit history. This differs from most banks, which only use credit data from their native country.

Also, the bank makes use of the customers’ ‘social footprint’ to help add color to their account application — it’s only ever used as an auxiliary method, but thus far has proved to be incredibly effective.

They also use geo-location to perform additional checks on their customers. Monese is able to map whether a Monese customer is in an unusual location during the sign-up process, which contradicts the information they are telling them.

If Monese still isn’t satisfied after all that, they conduct a Skype interview with the applicant to try and fill in the blanks.


As the bank is using native applications for both iOS and Android devices they get access to all the features of those phones.

Also when you apply for an account, they carry out some checks at a UK Credit Reference Agency. The initial checks leave a soft footprint on your credit file, and the overdraft check leaves a hard credit check footprint. If they need additional proof of address information they get in touch via the app.


Atom Bank has launched its app with voice and facial recognition security, as well as PIN security. Atom uses US-based systems such as Chexsystems, relying on historical knowledge of the customer’s financial history (such as when they most recently opened a bank account, and who their current mobile phone provider is) to ensure the customer is who he says he is.


“The banks who are succeeding are offering identity capture and biometrics that allow customers to verify their identity remotely. Banks that don’t adapt now risk new customers abandoning the application process altogether in favor of a challenger bank using this technology.”

John Devlin author UK Bank Accounts: A Survey of True Digital Capabilities in Customer On-boarding

Digital Product Management