Capex vs. Opex: Four Ways to Reduce Customer Onboarding Expenses


With inflation at a four-decade high and fraud costs and volume higher than ever for financial services, it’s a difficult time for CFOs around the world. According to a study by LexisNexis® Risk Solutions, the cost of fraud has increased up to 9.9% for financial services and mortgage lenders in the U.S., compared to the pre-pandemic era. As a result, evaluating your capex vs. opex strategies is key to reducing expenses for digital onboarding.

As KYC breaches increase, a major concern for CFOs is allotting additional IT spending for tools to their balance sheet. Businesses must minimize customer onboarding risk, ensure steady growth of revenue and boost significant cost-savings for customer acquisition. Rethinking your digital customer onboarding with platforms like Instnt provides ample opportunities to optimize capital expenditures and operating expenses without hurting the customer experience.

Capex vs. Opex: Accelerate the Customer Onboarding Process 

A study by Mckinsey stated that 40% of customer onboarding time is dedicated to the Know-Your-Customer and account opening processes. Unfortunately, most banks are still nascent in modernizing their onboarding. Due to disjointed tools and increased human intervention, the KYC and account opening processes remain lengthy. 

In the new digital age, however, Gen Z and young millennials are impatient, seeking faster and more efficient digital onboarding experiences. Yet, the customer journey tends to be the easy target for identity fraud and fraud loss. Financial services in turn are often cautious when it comes to this process. 

For example, financial services have a more stringent document verification process. Since document verification is often handled manually, the process can be error-prone, requiring more time to verify IDs and subsequently onboard new customers. By then, the arduous process has often done its damage, frustrating customers. 

Unfortunately, every additional five minutes in document verification for KYC and AML processes ends up triggering customer abandonment, increasing the customer acquisition costs. As a result, your operational expenditures for sales and marketing campaigns increase. You will also find yourself dedicating more internal resources to manage the onboarding efforts. 

How to Reduce Operating Expenses

As you seek to decrease operating expenses for the onboarding processes, you also want to ensure you maintain adequate customer retention. Leveraging a fully-managed service like Instnt Accept™, an AI-powered technology platform, is essential. 

Instnt produces single sign-up low-code platform to embed in your system, providing customers with a frictionless account-opening experience. With predictive analytics, Instnt detects threats and prevents malicious bot transactions. Via Instnt Access™, customers can seamlessly onboard in just one click without the risk of fraud loss. 

For example, when Alchemy’s clients' credit unions struggled to adopt digital initiatives that would improve the onboarding experience for  Gen-Z and mobile-first customers, Instnt transformed their digital dreams through API integration. As a result, the credit unions saw a 50% increase in digital signups.


Protect Your Customer Identity 

Identity theft is a significant bottleneck for financial services. According to LexisNexis® Risk Solutions’ report, for every $1 loss, it costs U.S. financial services $4 and lending services $4.40. Further, the loss due to identity theft is expected to grow to $635 billion by 2023 according to a study by Aite-Novarica. 

There simultaneously exists a strong regulatory need to provide identity protection and risk compliance. Failing to do so may incur heavy financial losses and non-compliance fees as well as reputational damage. As a result, financial services must set aside compliance funds to spend on risk and compliance activities every year. In the present time, when compliance costs have increased by 60% for financial services, prioritizing operating expenses vs capital expenses is key to optimizing cash flow. 

With Instnt, you receive more than simply a document verification tool. Instnt’s AI platform identifies risk, protects customer identity and prevents fraud loss. By facilitating KYC checks and account monitoring, Instnt can easily detect digital behavior, device risk, and fraudulent payment activity. Financial services will thus avoid heavy fees for non-compliance and reduce their investments in fragmented tools. You can save operating and capital expenses while delivering an elevated user experience, adding value to customer services. 


Reduce False Positives and Fraud Loss 

Successful customer onboarding must leverage efficient ways to prevent the intensity of false positives. With the high propensity of fake profiles passing as real people, cybercriminals can easily attack the fabric of financial service mechanisms to sniff off funds. 

The best way to eliminate unintentional rejection of authentic applications and onboarding friction is by tapping into the fraud and risk management tool. Instnt’s performance-based charge model is best at evaluating fraud risks, including malware, botnets, bots, synthetic identity, and remote access trojans to minimize the risk of fraud loss. Instnt possesses unique fraud risk assessment and management competencies to reduce the likelihood of upcoming threats while making it easier to onboard 10x more good customers and save on operating costs.


Embrace Strategic and Unified Collaboration

Digital customer onboarding is not only the responsibility of a customer success team. Most banks or financial services involve multiple teams, from marketing to sales to compliance. As these teams work across fragmented tools, they often have no single point of data, which delays the onboarding process. If the certain scope of digital onboarding requires manual KYC or AML verification, it leaves room for errors, frustrating customers and causing revenue leakage. 

Instnt has proven itself as a revenue engine tool that removes friction. It helps automate document verification tasks while accelerating customer onboarding by reducing the frequency of manual and repetitive actions. Instnt also enables users to create customized workflows to manage the onboarding process through a single and unified platform. It eliminates the need to toggle between multiple tools, unifying customer data and providing a single view of the onboarding status. Additionally, embedded alerting helps escalate real-time notifications to manage critical onboarding issues. Instnt helps you optimize resources and reduce operating costs through labor savings.


It is key to prioritize operating expenses vs capital expenses to optimize cashflow. Instnt efficiently manages your capital expenditures for customer onboarding. As a cloud-native AI-powered platform and pay-per-customer model, it does not seek upfront investment, which CFOs would otherwise need to add to their annual financial record in the case of on-prem technology platforms. 

With Instnt, you can also save more on capital expenditures by not paying for maintenance and infrastructure costs or licensing fees. Instnt takes care of these costs for you. You can carefully choose an opex model to save on day-to-day operating expenses. What’s more? By deploying Instnt into your system, you can gain $100M in fraud loss insurance per accepted customer. 

Are you seeking a digital platform that carefully promotes fraud loss and risk management for customer onboarding? Instnt Accept™  facilitates seamless customer onboarding and provides frictionless customer experience, ensuring cost-efficiency through optimization of capex and opex models. 

Want to learn how Instnt can help you? Schedule a free demo today


  1. Service Now - Successful customer onboarding in banks
  2. Deloitte - Calculating real ROI on intelligent automation (IA)
  3. Mckinsey - A new approach to fighting fraud while enhancing customer experience
  4. Mckinsey - Winning corporate clients with great onboarding 

About the Author

Instnt Inc. is an AI managed customer acceptance platform founded and operated by serial entrepreneur Sunil Madhu, founder, and former CEO of Socure. Instnt is on a mission to bring frictionless inclusion and continuous identity assurance experiences for businesses and their customers through proprietary artificial intelligence technology, open standards, and a collaborative effort in the identity governance industry. Instnt powers various financial institutions, lenders, fintechs, banks, and credit unions across North America. For more information, please visit