The Part of Fintech Nobody Talks About Until It Breaks

Most people who build fintech products think about Know Your Customer, or  KYC, the wrong way.

They hand it to the compliance team, draw a box (or circle) around it in the org chart, and treat it like something they have to do because the law says so and not like a product decision that needs to be made. And that works fine … until you scale, and then it breaks and does so expensively and in a way that everyone can see.

I learned this when I was building KYC operations at Buzzer. We were getting new users fast, and we would have been overwhelmed with verification requests had we not had the right systems and structures in place. And I don’t just mean a document showing what our policies are. I mean an actual system with rules about how to review capacity, what to do when something isn’t clear, and how to make sure we are following the law.

What really surprised me was how much of it turned out to be a product problem in disguise.

Every decision you make about KYC affects how many users you can get. Make it too difficult to sign up, and you lose or miss out on users at the top of the funnel. Make it too easy, and you risk getting in trouble with the law, facing sanctions, and (in the case of a payout scenario) a situation that ends with you losing your operating license. 

That's not a problem for the team in compliance, but more of a product problem that has to do with compliance, and it should be treated as one.

This big challenge we had was making sure we could handle verification requests at scale without sacrificing quality. Thousands of verification requests isn't a number you can manage manually with just good intentions. You need to know exactly how many reviews a KYC officer can do per hour, what happens when something isn’t clear, and who is in charge. You need to have documentation that holds up to an audit.

But more than any of that, you need to make a deliberate decision about where you're willing to make things harder for users. And where you're not.

Some platforms get this wrong by defaulting to caution in ways that hurt their own growth. They ask for too much information too soon, and treat users like they are a problem before they even do something wrong. The ones that get it right are those that treat verification like a greeting: “We need to know who you are before we move your money. Here’s why we need to know and here's how quickly we'll get this done.”

This way of thinking about KYC is what guided how we built our system. Not every platform follows suit with this approach. Those that do tend to have someone in charge who understands both the compliance and product sides of things, and can ask both sets of questions at the same time. 

Getting this balance right isn't a one-time fix. Rather, it's a continuous loop between compliance, product, and UX. Platforms that win are those that treat KYC as dynamic, not static. Embed compliance thinking from day one, and you avoid fines, all while unlocking faster growth.

And that right there is where the real work is.