KYC in Fintech And Neobanks – Digital Onboarding in 2026

You open an account at a neobank. You upload a photo of your ID, take a selfie, wait a few seconds – and you’re in. Behind that seemingly simple experience lies a complex procedure that every financial institution is required by law to implement: KYC, or Know Your Customer.

In 2026, digital onboarding is the norm – but its legal and technical requirements are stricter than ever. New EU regulations, a growing wave of biometric fraud, and customer expectations around speed are putting fintechs and neobanks under real pressure: how do you stay compliant without destroying conversion?

This guide answers that question. We’ll walk through the legal foundations, the key elements of KYC procedure, the technologies that support it – and the common mistakes that, if avoided, will save you time, money, and trouble with regulators.

Key Takeaways

• KYC is a legal obligation, not a voluntary practice – it applies to every financial institution, including fintechs and neobanks, regardless of whether they hold a banking licence.
• The legal basis is the Polish AML Act of 1 March 2018, supplemented by EBA and FATF guidelines and EU regulations including eIDAS 2.0 and MiCA.
• KYC protects against money laundering and terrorist financing – inadequate procedures risk fines, loss of licence, and severed relationships with banking partners.
• In 2026, fully remote onboarding is the standard: selfies, video, e-documents, automated screening, and real-time decisions.

What Is KYC and Why Does It Matter for Fintechs

KYC (Know Your Customer)  is a process covering customer identification, identity verification, risk assessment, and ongoing relationship monitoring. The KYC procedure is an integral part of the AML framework, whose purpose is to prevent money laundering and terrorist financing.

In practice, this means that before a financial institution enters into a relationship with a customer, it must confirm that the person is who they claim to be. Identity verification involves collecting personal data, including a national ID number, and checking an identity document – a national ID card or passport. Since 1 September 2023, the mObywatel app has also been recognised as a valid identity document in Poland. A driving licence may support the process but does not generally replace the primary document.

The obligation to hold up-to-date customer data applies when opening bank accounts, payment accounts, payment cards, crypto wallets, and BNPL services. Data must be minimal, secure, and processed in compliance with GDPR.

Legal Foundations of KYC for Fintechs and Neobanks

The key piece of legislation is the Polish AML Act of 1 March 2018 – the Act on Counteracting Money Laundering and Terrorist Financing. It governs the application of financial security measures, customer due diligence, required documentation, and the consequences of being unable to complete verification.

Provision / Regulation	What It Covers
Art. 34–35 of the AML Act	Obligation to identify and verify customer data and establish the source of funds.
Art. 41 of the AML Act	Refusal to enter into a relationship or account freeze when verification cannot be completed.
Obliged entity	Banks, payment institutions, currency exchange offices, virtual asset service providers, and other entities defined by the Act.
EBA, FATF, eIDAS 2.0, MiCA	EU and global guidelines shaping the requirements for remote KYC processes.
FATCA and CRS	Requirements relating to customer tax residency, reported to local tax authorities.
Reporting threshold	Transactions above €15,000 must be reported to the General Inspector of Financial Information (GIIF).
AML procedure updates	Required at least once every two years.

Key Elements of the KYC Procedure in Digital Onboarding

KYC is not a one-time checklist, but a continuous cycle: data collection, verification, risk assessment, ongoing monitoring, re-KYC, and archiving. That cycle consists of:

• Customer Identification Programme (CIP) – collecting and confirming identifying information.
• Customer Due Diligence (CDD) – verifying documents, biometrics, and registry data.
• Ultimate Beneficial Owner (UBO) identification – establishing who actually stands behind a given entity.
• PEP and sanctions screening – checking against global databases: UN, EU, OFAC, and adverse media.
• Purpose of relationship and source of funds analysis – assessing why the relationship exists and where the money comes from.
• Ongoing transaction monitoring – detecting unusual patterns and responding to suspicious activity.

Customer Identification and Verification (CIP / CDD)

Identification is the collection of data; verification is confirming that the person is who they claim to be. Typical data points for an individual customer include: first name, surname, national ID number, nationality, address, and document number. For companies, additional requirements apply: tax identification number, company registry number, details of representatives and owners.

In 2026, verification is carried out via a document photograph, selfie, video, NFC read, or e-document. IDENTT automates the entire process – document authenticity verification, face-to-document matching, and liveness detection – allowing a new customer to complete the procedure in a matter of seconds.

Risk Assessment, PEP, Sanctions, and Terrorist Financing

Once identity is verified, the institution must carry out a risk analysis. Factors taken into account include: the customer’s country of origin, industry, product type, acquisition channel, connections to PEP and sanctions lists, and transaction history.

The outcome of the analysis determines which of three levels of security measures applies:

Level of Measures	Applies To	What It Covers
Simplified	Low-risk customers	Basic identification and document verification.
Standard	Most relationships	Full identity verification, PEP and sanctions screening, purpose-of-relationship analysis.
Enhanced (EDD)	High-risk customers	Additional confirmation of source of wealth, in-depth transaction analysis, intensified monitoring.

PEP and sanctions screening is not a one-time exercise – lists are updated continuously, and alerts must be handled in accordance with AML procedures and internal KYC policy.

Transaction Monitoring and Customer Data Updates (Re-KYC)

KYC does not end when an account is activated. Ongoing transaction monitoring is mandatory and serves to detect suspicious financial activity. Customer data must be updated at least once every two years; for high-risk customers, more frequently.

Events that trigger re-verification include: an expired identity document, a change of address or personal details, large transfers, the appearance of new countries or currencies in transaction history, and suspicious patterns of activity. A customer who refuses to update their data may lose the ability to carry out transactions.

Digital Onboarding in Fintechs and Neobanks – How It Works in Practice

A modern, compliant onboarding process runs as follows:

1. The customer opens the app or web form.
2. They enter their personal data, national ID number, and contact details.
3. They submit a photograph of their identity document along with a selfie or video recording.
4. IDENTT verifies the authenticity of the document, matches the face to the document, detects signs of life, and runs PEP and sanctions screening.
5. The system assigns a risk profile and makes a decision.
6. The customer signs the agreement electronically.
7. The product, limits, and accounts are activated.

API or SDK integration allows the entire process to be embedded within the client’s own application. A/B testing helps identify steps that generate drop-offs. The goal is full regulatory compliance with the minimum number of steps on the customer’s side.

KYC for Individual Customers and Businesses (B2C / B2B)

Process Element	B2C – Individual Customer	B2B – Company / Business
Identity document	National ID card, passport, mObywatel	Registration documents: national company registry or foreign equivalents
Biometric verification	Selfie or video recording	Selfie/video of company representatives
Additional data	National ID number, home address, purpose of relationship	Tax ID, company registry number, industry, country of operation, ownership chain
Ultimate Beneficial Owner	Not applicable	Full UBO identification required
Bank account verification	Optional	Often required as an additional confirmation step
Process complexity	Low – completed in seconds	High – may require tracing the full ownership chain

IDENTT enables separate B2C and B2B onboarding flows to be built within a single environment, simplifying process management and reporting.

Technologies Supporting KYC in 2026 – How IDENTT Automates It

The growing volume of financial services makes manual verification too costly and too slow. IDENTT brings together in a single solution: OCR, artificial intelligence, facial biometrics, liveness detection, address verification, PEP and sanctions screening, fraud scoring, and a full audit trail.

• Document verification from 190+ countries – the system recognises national ID cards, passports, and other identity documents, checking their structure, MRZ zone, expiry date, security features, and forgery patterns.
• Face-to-document matching – facial biometrics compares the photograph in the document against the customer’s selfie or video, eliminating the risk of someone presenting another person’s document.
• Liveness detection – detects attempts to bypass the system using photographs, recordings, masks, and deepfakes, directly addressing the growing trend of biometric fraud.
• Address verification (proof of address) – supports utility bills, bank statements, and tax documents as confirmation of the customer’s place of residence.
• PEP, sanctions, and adverse media screening – automated checks against UN, EU, OFAC, and global press sources, with the ability to set alerts for the AML team.
• Dynamic risk rules and compliance alerts – continuously updated rules allow institutions to respond to changes in the regulatory environment without system downtime.

Automation does not remove the human from the process but it prioritises cases that require attention, explains the reasoning behind decisions, and allows AML analysts to focus on the cases that genuinely need them.

Common KYC Challenges in Fintechs and Neobanks – and How to Overcome Them

The biggest operational challenges are: finding the right balance between regulatory requirements and UX quality, a high rate of false positives, handling customers from multiple countries, illegible documents, and manual verification queues that block scalability.

The solution lies in centralising customer data, automating risk-based decisions, and, above all, bringing product, UX, and AML teams together from the very first stage of process design.

IDENTT acts as both a technology and an advisory partner: it helps translate legal obligations into a concrete, working process that reduces financial risk without blocking business growth.

FAQ – Common Questions About KYC in Fintechs and Neobanks

Does every fintech and neobank in Poland have to apply KYC procedures?

Yes – if it provides financial services: accounts, payments, loans, currency exchange, or crypto services. The absence of a banking licence does not exempt an entity from KYC obligations when the product functions as a financial service.

Is it possible to complete full KYC entirely remotely in 2026?

Yes. Regulators accept remote onboarding, provided it includes strong document verification, biometrics, liveness detection, PEP and sanctions screening, and secure data archiving.

How often does customer data need to be updated?

At least once every two years, and also whenever there is a significant change in the customer’s data, document, behaviour, or risk profile. For high-risk customers, updates are typically more frequent.

Can KYC procedures differ for customers from the EU and outside it?

Yes. Customers from third countries or high-risk jurisdictions may require additional documentation, questions about the source of funds, and more intensive transaction monitoring.

Does advanced KYC always reduce conversion?

No. A well-designed process built on IDENTT’s automation can shorten onboarding time, reduce manual errors, and improve conversion without lowering the level of security.