Recent findings from PYMNTS Intelligence, in collaboration with Trulioo, indicate that identity operating models now have implications far beyond regulatory compliance and fraud prevention. The structure of KYC, KYB, and emerging KYA capabilities materially influences operating costs, onboarding performance, customer experience, and an institution’s ability to scale partnerships and enter new markets.
The publication highlights three implications for senior leadership.
First, internally managed identity operations carry substantially higher unit costs than hybrid or externally enabled models, with average review costs of $26 per consumer KYC review and $51 per KYB review, compared with $17 and $29 for hybrid models and $11 and $20 for externally enabled models, suggesting a significant impact on cost efficiency as onboarding volumes increase.
Second, false positives have become a meaningful commercial issue, with 43% of firms operating internal identity teams reporting false-positive friction, as unnecessary friction and declines affect conversion, customer acquisition returns, and competitive positioning. Third, hybrid operating models appear to provide the strongest strategic balance, combining governance and oversight with access to specialized technology, broader data sources, and improved performance outcomes, including lower KYA incident rates, with internal teams reporting a 53% KYA incident rate compared with 28% for hybrid models.
Taken together, these findings position identity verification as a strategic enterprise capability rather than a narrow compliance function. For senior executives, the operating model chosen for identity should be evaluated as a decision that directly shapes growth, efficiency, partnership strategy, and long-term competitiveness.
Source: pymnts.com
