TL;DR
- Commercial client onboarding is everything a bank does between a business applying and that business making its first payment: checking the company and its owners, approving credit where needed, opening accounts and giving the client's finance team access.
- It's slow and expensive. Deloitte found it can take more than 16 weeks and cost a bank $20,000 to $30,000 per client.
- Slow onboarding costs banks clients. Fenergo found that 70% of financial institutions lost clients in the past year because onboarding took too long.
- Most of the wait goes on chasing documents, retyping details and cases sitting between teams. Only 4% of banks have automated most of their KYC work.
- Speed shapes which bank a business picks as its main one. In Datos Insights research, fast and easy onboarding ranked above a previous relationship and attractive credit terms.
- Banks get clients live sooner when they ask for information once, let software handle the routine checks and save their specialists for the unusual cases.
- Onboarding is done when the client makes its first payment. That's when the client starts doing business and the bank starts earning.
A business can pass every check and have its credit line approved. Then it waits again, because nobody has set up who in its finance team can log in, send payments or approve them. In most commercial banks that setup happens in a separate back-office tool that shares nothing with the systems used for the checks or the accounts. So someone starts again from a blank screen. The bank has said yes, and the client still can't make a payment.
According to Deloitte, the onboarding process for commercial clients can take over 16 weeks, with banks investing as much as $20,000 to $30,000 per client.
Clients don't wait that long quietly. In a survey of 600 senior decision-makers, Fenergo found that 70% of financial institutions lost clients in the past year because onboarding was too slow, up from 67% in 2024 and 48% in 2023.
We think commercial client onboarding is slow for one structural reason. Banks run it as a chain of separate checks, owned by separate teams, each holding its own copy of the client's data. It should be one workflow on one client record that ends at the client's first transaction. Faster KYC tools help. They don't remove the handoffs.
What is commercial client onboarding?
Commercial client onboarding is the process a bank uses to take a business from first application to an active relationship. It covers verifying the company and the people who own and control it, screening them against sanctions and AML lists, and assessing credit when the relationship includes a facility. It also covers opening accounts, setting up the client's users and entitlements, and switching on the payments, treasury and card services the client signed up for.
It shares a name with retail onboarding and little else. A consumer is one person with one ID. A commercial client is an entity with articles of incorporation, a beneficial ownership chart, financial statements, several authorized signers and sometimes a string of subsidiaries. Each of those adds documents, checks and another team that has to approve something.
Two terms come up constantly. KYC (know your customer) applies to the individuals involved: owners, directors and signers. KYB (know your business) covers the entity itself, from its legal registration to who ultimately controls it. Neither is a one-off check at the door: both carry on through periodic reviews for as long as the client banks with you.
What regulators require at onboarding
In the US, the FinCEN Customer Due Diligence (CDD) Rule sets four core requirements for banks taking on a legal entity. The bank must identify and verify the customer, and identify and verify the beneficial owners of the company opening the account. It must understand the nature and purpose of the relationship to build a customer risk profile. And it must conduct ongoing monitoring to report suspicious transactions and, on a risk basis, keep customer information up to date. For beneficial ownership, that means any individual who owns 25% or more of the entity and one individual who controls it.
Requirements vary by jurisdiction. KYC due diligence can be complex, McKinsey found, because banks write many client contracts individually to comply with variations in local regulations. The ongoing monitoring requirement is why onboarding data has to stay usable after day one. Fenergo's 2025 research found that automation of periodic KYC reviews averages only about a third across the firms it surveyed.
What documents commercial client onboarding requires
In a typical corporate onboarding, McKinsey found, a case manager collects up to 100 client documents and information for 150 data fields. The exact list depends on the entity, the jurisdiction and the products, and it draws on six kinds of information:
- Company formation documents, such as the articles of incorporation and proof of legal registration.
- Ownership details, usually a chart showing who owns the business and who controls it.
- Identity documents for the owners, directors and the people allowed to sign for the company.
- Financial statements, which the credit team reviews when the client wants a loan or credit line.
- What the relationship is for, which the bank uses to judge the client's risk.
- Products and users: the accounts, currencies and services the client wants, and who in its finance team can view, pay and approve.
The bank can find much of this in public sources or already holds it. McKinsey advises banks to pull in public data automatically, reuse what they already know about the client and remove duplicate questions from forms. It also tells them to check whether every document they ask for is really needed under local and global rules. Corporate clients know what happens when banks skip this. They give the same information three times, then get emails asking for documents they've already sent.
The commercial client onboarding process, step by step
Every bank draws the stages a little differently, but the work falls into six of them. The delays come as much from the gaps between stages as from any single step.
1. Application and data capture
The client, or a relationship manager working with it, starts an application with company details, ownership information and the products it wants. Company lookups fill in what the bank can already find. A few early questions screen out applications that won't qualify before anyone spends an afternoon on them.
2. Checking the company, its owners and the watchlists (KYB and AML)
The bank checks the company, finds its beneficial owners and verifies who they are. It screens everyone against sanctions and anti-money-laundering (AML) watchlists and scores the risk. The documents arrive as PDFs, scans and email attachments in all sorts of formats. This is where most of the manual effort sits. Fenergo estimates that a commercial bank doing KYC on 83,800 medium-risk clients a year spends $175 million on those reviews, or $2,089 per case. According to the banks McKinsey surveyed, KYC checks and account opening together take up more than 40% of the time a client spends in onboarding.
3. Credit assessment, when the relationship includes lending
If the client needs a credit line, a term loan or trade finance, the bank analyzes its financial statements, assesses the credit risk and sends the application for approval.
4. Account opening and product setup
The bank opens the accounts in its main account system, with the products, currencies and pricing agreed with the relationship manager. Some banks now open the account before KYC finishes. Of the banks McKinsey surveyed, 40% let clients open an account instantly and get an account number while KYC is still pending.
5. User access and permissions
Operations teams set up who at the client can log in, what each person can see, how much they can pay and who has to approve. Banks call these entitlements. A single client often needs 15 to 20 users across several accounts. It's manual work with real stakes: give the wrong person approval rights and the bank has opened a security gap.
6. First payment
The client logs in, makes its first payment and starts using its cash management and treasury services. This is the day the relationship starts earning for the bank, and the only finish line the client recognizes.
Why commercial client onboarding takes 16 weeks
Four problems account for most of the delay, and each makes the others worse.
1. Too many approvals before the client can bank
Commercial onboarding is tailored to each business, so the paperwork and sign-offs grow with the client's complexity. When every step needs input from several people, the process stretches to weeks or months before the client can use what it signed up for.
Complex commercial loans add more. Detailed credit analysis, pricing reviews and several rounds of approval each add weeks of their own.
2. Paper forms and retyping by hand
Many banks still rely on paper documents and typing data in by hand, which slows processing and adds errors. In McKinsey's research, half of all banks have no tech solutions for many onboarding processes. Many of the tools that do exist were custom-built and don't connect to each other.
Reviewing one set of commercial documents and keying the data in by hand can take an analyst 45 minutes. Every gap or typo becomes another request back to the client, and every request adds days.
3. Systems that don't talk to each other
In most commercial banks, onboarding information lives in one system, account data in another and user permissions in a separate back-office tool. None of them share information automatically. The client feels this as repeat requests: the same incorporation papers and ownership details, sent to a different team each time. The relationship manager feels it as having no single view of where the case stands.
In Fenergo's 2024 research, 86% of banks named poor data management and disconnected processes as a reason clients abandoned onboarding.
4. Compliance run as separate manual checks
Banks must follow strict KYB and AML regulations. Many still run compliance in ways that make a business submit the same documents to several departments. Only 4% of banks have automated most of their KYC workflows, according to Fenergo's survey of more than 450 executives at corporate, institutional and commercial banks.
Manual compliance checks also leave blind spots that expose banks to fraud and regulatory penalties.
The strongest objection to speeding any of this up is that compliance should take time. A bank that onboards a commercial client in days, the argument goes, must be cutting corners. In our view the judgment calls take up a small share of the time. Most of it goes on chasing documents, retyping data and cases sitting in a queue between teams. Automating that work gives specialists more time for the decisions that need them. A standard company with a simple ownership structure in a well-known country can move straight through. Clients with ties to public officials, complicated ownership or links to high-risk countries go to a specialist, with the documents, checks and risk score already gathered.
What slow onboarding costs a commercial bank
The direct cost is the $20,000 to $30,000 per client that Deloitte measured. The bigger costs show up elsewhere.
Some clients leave before they're live. Fenergo puts average onboarding abandonment at around 10%, and those are businesses that had already picked the bank. The ones who stay start earning for the bank later. Every week a client spends in onboarding is a week without its payments, deposits or treasury business.
Speed also shapes which bank becomes the client's main one. In Datos Insights research on why businesses choose their primary bank, easy and fast onboarding (36%) ranked above a previous relationship with the bank (31%) and attractive credit terms (29%). Those last two are what banks have always competed on.
How banks speed up commercial client onboarding
The banks that move fastest treat onboarding as one journey from application to first payment. It's also one part of wider commercial banking modernization, which covers treasury, lending, trade and relationship management too. The same client file should serve all of them.
1. Ask clients for information once
The bank captures the client's information once and reuses it across services, teams and channels. That's how we built our onboarding software. A client applying online and a banker helping a client in a branch fill in the same application, so nothing gets typed twice. The details then carry through to every product the client takes. A CFO and treasury team go through onboarding once for payments, lending and treasury management. And the bank starts with a clean, complete picture of the client when it's time to offer more.
2. Let software do the reading and retyping
AI that reads documents and runs KYC checks takes the manual reading and retyping out of step two. Today's AI can sort incorporation papers, ownership charts and financial statements and pull out the details that matter, whatever the layout. The analyst's job moves from typing to checking. BCG found that institutions applying AI in bottlenecked areas like onboarding have realized efficiency gains of up to 60%.
In the onboarding software we build, AI does the first read of each document. It checks what the compliance rules require, pulls out the financial figures and passes anything unusual to the right person. Identity checks, ownership checks, watchlist screening and risk scoring run automatically alongside it.
3. Let simple cases finish on their own
Simple rule-based automation stalls the moment it meets an unusual company structure or a missing document, and the case drops into a manual queue. A better design lets routine cases finish on their own. The unusual ones go to a person with the documents, screening results and risk score already attached. A live view of every case against its deadline then shows operations leaders where work is piling up, so they can act before the client notices.
4. Fit the process to the client
Banks can shape onboarding around the type of client and the products it wants. They pre-fill forms with details they already hold, so an existing client only confirms what's there.
That keeps onboarding short for a small business opening an operating account. A multinational setting up complex treasury services still gets the thorough version.
5. Connect to the software clients already use
Older bank systems often make it hard to plug in new tools, which leaves information stuck in separate places and work done twice. Open connections (APIs) link the bank's onboarding to the client's accounting and finance software, so details flow across without being retyped.
A business applying for a loan, for example, doesn't have to send several financial reports. The bank can pull in what it needs automatically. In the same Datos Insights research, connection to a business's own systems, such as its accounting and treasury software, was the top reason businesses gave (40%) for choosing a primary bank.
6. Show clients where their application stands
Digital banking lets clients handle parts of onboarding themselves. They can upload documents, track the status of their application and set up account settings. That cuts waiting time and frees bank staff for the work that needs them.
Clients also see where they are in the process and what's left, with no need to chase an update.
Clients and bankers work in the same place too. If a banker needs more information to approve a loan, they send a request through the bank's portal. The client gets a text message and uploads the documents right there, with no email chain to follow.
7. Set up users as part of onboarding, not after it
User setup is where an approved client most often waits for no good reason. An AI assistant can pull the client's current details, suggest who should get which permissions based on how the business is organized and catch errors before they go live. A manufacturer with 12 subsidiaries needs a different setup from a professional services firm with three partners. The assistant offers the right template and flags the decisions a person should make. When user setup draws on the same client file as the company checks, the client can make its first payment the day its accounts open.
Business lending: from loan application to approval
When the relationship includes credit, onboarding and the loan application run side by side, and the client feels them as one wait. Banks call the lending side loan origination. It covers the application, the analysis of the client's financial statements, document review, the credit decision and approvals. Each step can involve different teams and systems. In the same Datos Insights research, 37% of businesses named easy and fast credit processes as a reason for choosing their primary bank, one point ahead of onboarding speed.
Doing the analysis by hand means an analyst retypes the income statement, balance sheet and cash flow statement into the bank's credit template before anyone can assess the risk. When software pulls those figures out automatically, credit teams start from the numbers.
A connected process gives lending teams one view of the application, the evidence needed, the decisions still open and where approval stands. Relationship managers can follow progress without piecing the case together by hand.
Our software for onboarding and lending to business clients covers credit lines, term loans and trade finance, with financial statement analysis, credit risk assessment and approval steps built in. It reuses the details the client already gave during onboarding. The work behind the scenes, from collecting evidence to passing on unusual cases and lining up approvals, runs through software that keeps every client case moving between teams. The bankers who talk to the client and the teams who process the work see the same case, so nothing gets lost in the handover.
How to measure commercial client onboarding
If time to approval is the only number on the dashboard, the bank will keep improving the wrong finish line. A dashboard that covers the whole journey tracks six numbers:
- Time from application to account opening.
- Time from application to first transaction.
- Abandonment rate, by client segment and product.
- Number of times the bank goes back to the client for more information.
- Cost per onboarded client.
- Share of low-risk cases that complete with no manual work.
Leading banks also tell clients up front how long onboarding will take for each product, McKinsey found, through service-level agreements or simpler checklists. They track time to revenue as a key measure, and it can run from 30 to 100 days.
Faster onboarding means stronger relationships
Commercial clients judge a bank first by how quickly it lets them start banking. Banks that keep onboarding as a 16-week relay between teams will keep losing clients to fintechs and other banks that move faster.
None of this means replacing the systems a bank already runs. We build software that sits on top of them. It links the client's online banking, the onboarding checks, loan approvals, user setup and treasury services, so a case moves from application to first payment without being passed back and forth. Banks can start with the stage that slows clients down most and add the rest at their own pace.
A good first step is to pull the last 20 commercial clients you onboarded and measure how long each took from application to first transaction. That's the wait your clients actually lived through.
Learn more about how Backbase helps banks get commercial banking clients live and transacting sooner.
FAQ
What is commercial client onboarding?
Commercial client onboarding is how a bank takes a business from its first application to a working relationship where money is moving. It includes checks on the company and its owners (KYB and KYC), sanctions and anti-money-laundering screening, and a credit assessment when the client wants a loan or credit line. It ends with the accounts open, the client's users set up and its payments and treasury services switched on.
How long does commercial client onboarding take?
Deloitte found that onboarding a commercial client can take more than 16 weeks, and McKinsey found the average onboarding for a new corporate client can take up to 100 days. Fenergo's 2025 research found UK corporate banks average more than six weeks, the slowest of the markets it surveyed. The timeline depends on how complex the business is, which products it wants and how much of the work is still manual.
What documents are required for commercial client onboarding?
Banks typically ask for the company's formation documents, such as its articles of incorporation, a chart of who owns and controls it, and ID for owners, directors and people allowed to sign. They ask for financial statements when the client wants credit. They also ask what the relationship is for, plus details of the products and users the client needs. McKinsey found a typical corporate onboarding involves up to 100 client documents and 150 data fields.
How much does it cost to onboard a commercial client?
Deloitte puts the cost at $20,000 to $30,000 per commercial client. KYC reviews are a large share of it. Fenergo estimates that a commercial bank doing KYC on 83,800 medium-risk clients a year spends $175 million on those reviews, an average of $2,089 per case.
What is the difference between KYC and KYB in commercial onboarding?
KYC (know your customer) checks the people connected to the client, such as owners, directors and authorized signers. KYB (know your business) checks the company itself, including its registration and who ultimately owns and controls it. In the US, the FinCEN CDD Rule requires banks to identify and verify anyone who owns 25% or more of the business and one person who controls it. Commercial onboarding needs both, and both continue through regular reviews after the account opens.
How can banks speed up compliance without compromising accuracy?
Automation makes KYC and AML checks faster and more accurate at the same time. Software that reads documents leaves fewer gaps and typing errors. Routine low-risk cases can finish with no manual work, and specialists get the complex or high-risk cases with the evidence already gathered.
How does AI improve commercial client onboarding?
AI reads commercial documents and pulls out the details that matter, whatever their layout. It checks what the compliance rules require and sends unusual cases to the right person, and it can suggest which of the client's people should get which permissions based on how the business is organized. BCG found that institutions applying AI to bottlenecked areas like onboarding have realized efficiency gains of up to 60%.
