Small businesses make up 99.9% of all U.S. companies, and yet most onboarding flows still aren’t built with them in mind. For many small business owners, signing up for financial services feels more like applying for a corporate loan than joining a modern platform.
Fast-growing fintechs are changing that. They’re rethinking onboarding from the ground up as they prioritize speed, simplicity, and compliance in equal measure. These companies understand that every point of friction is both a potential drop-off and an opportunity to build trust.
The best ones strike a balance: They reduce unnecessary hurdles without lowering their guardrails. And in doing so, they both earn more small business customers and keep them longer.
It all starts with a KYB system designed for nuance, accuracy, and ease of use. Here’s how top-performing fintechs stand out.
They tailor onboarding flows to real-world business types
There’s no such thing as a “standard” business. A freelance designer working as a sole proprietor doesn’t look anything like a multi-employee LLC or a growing ecommerce brand. Leading fintechs recognize these differences, and they build onboarding flows that reflect them.
Instead of funneling everyone through the same rigid process, these fintechs segment flows based on business type, risk profile, and ownership structure. A sole proprietor might see a simplified experience that gets them through in minutes. A higher-risk entity like a small cannabis brand, on the other hand, might be asked for more documentation — but only what’s truly necessary.
Successful fintechs are designing flows that are rigorous without being punishing and that meet businesses where they are.
They reduce manual reviews with smarter automation
Nothing slows down onboarding like a manual review queue. They're expensive, time-consuming, and often inconsistent. The best fintechs use smarter automation to avoid them whenever possible.
Instead of asking applicants to fill out long forms or upload hard-to-verify documents, they tap into trusted data sources to pre-populate fields and verify details instantly. This reduces friction, lowers error rates, and speeds up decision-making.
They also bring in real-time context to avoid false positives. For example, ENGS Commercial Finance — an equipment financing provider for small businesses — uses Middesk to automatically pull verified entity data during onboarding. That automation has enabled “touchless” approvals for small-ticket financing, helping ENGS say yes faster and more confidently while saving over 50 hours by cutting out manual processes.
They unify risk and product goals through shared data
At top fintechs, compliance and product teams aren’t at odds, because they’re working from the same playbook. That’s possible because they share the same data and view of the customer.
Rather than dealing with fragmented tools or misaligned risk models, these teams collaborate around unified business identities and shared risk scores. That alignment allows them to act quickly, uphold standards, and minimize unnecessary back-and-forth during onboarding.
It’s an approach we’ve seen more fintechs adopt in recent years: using a single source of truth — often powered by Middesk — to break down silos and streamline operations.
They also think beyond onboarding and invest in ongoing monitoring
Onboarding is just the beginning. Businesses are always evolving, and, as a result, risk profiles are always shifting. Ownership can change overnight. So can addresses, business activity, control personnel, or registration status. That’s why the best fintechs build in systems to keep tabs on their business customers after they’ve been onboarded.
With continuous monitoring in place, these fintechs don’t have to overcorrect with overly broad and rigid standards up front. They can allow for a smoother initial experience because they know they’ll be alerted to anything suspicious later on, whether it’s a sudden change in ownership or a flagged news article.
This kind of perpetual approach to KYB helps fintechs stay compliant without stalling their growth. It also means fewer surprises down the road that can distract them from their mission and eat up time and money.
Turn onboarding into an opportunity
If you treat onboarding like a checkbox, customers will notice. But if you use that moment to show small businesses that you understand their needs, you can set the tone for a long-term relationship.
Fast, flexible, and risk-aware onboarding is more than a conversion play. It’s a trust signal. Done right, it helps fintechs attract the right customers, avoid the wrong ones, and build durable businesses in the process.
Strong KYB doesn’t have to mean slow onboarding. With the right systems in place, you can verify good actors quickly and accurately without letting bad actors slip through.
Sole proprietorships make up the largest share of U.S. businesses, yet most KYB systems are still optimized for corporations and LLCs. Download our guide to closing the sole proprietorship verification gap, and learn how to earn their trust and their business.
