Too many fintech start-upsups treat compliance as an afterthought, managing onboarding through email threads and manual document reviews. It works at first. Then it breaks. Maxim Kon, a veteran compliance consultant in the fintech and crypto sectors, has seen companies stall at the exact moment they should be scaling. In this deep dive interview, he outlines how startups can evolve from makeshift onboarding to robust digital compliance, what regulators are getting wrong, and why the future of compliance lies in AI, automation, and risk first design.
In Maxim Kon’s day to day work, he straddles two very different worlds. On one side are small B2B startups serving a handful of institutional clients. On the other, fast scaling fintechs processing tens of thousands of new retail users daily.
The former group often relies on human led, manually coordinated compliance processes. They might have ten to twenty clients a year, so they believe they can handle everything with a small team, Kon explains. No tools, no workflows. Just emails and spreadsheets. And for a while, that is fine. But even onboarding one institutional client can take weeks, he continues. They keep emailing back and forth. Documents are reviewed manually. There is rarely a clear structure. You end up with two people wasting their time chasing details, and the client experience is terrible.
In contrast, high volume platforms face an entirely different challenge: scale.
If you're onboarding ten thousand people a day, manual is not an option. You would need an army of compliance officers, says Kon. The only way it works is with automation. You use software to handle the bulk of the process and only flag edge cases for manual review. Here is the surprising part. Both types of companies often have compliance teams of similar size. The difference is not headcount. It is how well they have systematized their compliance process.
Kon emphasizes that compliance is not a back office cost. It is a key part of the revenue engine.
Most founders underestimate how much money they are losing because of bad compliance workflows, he says. If it takes you two months to onboard a client, that is two months of delayed revenue. That is capital that could be working for you.
He shares an example from his work with OTC brokers and asset managers. They hire top tier salespeople to bring in clients. But then onboarding takes forever. You have compliance officers manually emailing directors for notarized documents. In the meantime, your client gets frustrated. Your competitor who might be less thorough but more efficient, onboards them in a week. It is not just about the internal costs either. Poor onboarding can destroy trust. Even in B2B, experience matters, Kon says. If your process is clunky and slow, it signals to the client that you are not serious about modern workflows.
A key insight Kon shares is that companies delay digital investment too long.
In the start-up world, you are building an MVP. You want to test your product, prove demand, and launch fast, he says. So you start with the most basic compliance process. And that is fine for now. But the problem is what happens next. The moment your client volume picks up, the logical instinct is to hire more compliance staff. That is where things go wrong. You scale people before you scale processes.
Instead, Kon suggests a mindset shift. Start manual, but with the bigger picture in mind. Define your compliance requirements clearly. Then design processes that can be automated. Do not think about adding headcount. Think about adding capability. He emphasizes that most inefficiencies stem from poor process design, not lack of tools.
Too many compliance teams operate reactively. They do not define their document requirements up front. They do not ask for all the needed information at once. So clients get stuck in endless email loops. Once the process is structured, introducing tools becomes significantly easier. Automation works best when the rules are clear. If your team is confused, your clients will be too. And software will only make it worse.
There is a lingering belief in B2B fintech that user experience is secondary. Kon strongly disagrees.
Just because your client is a business does not mean they enjoy a poor experience, he says. Everyone expects speed and clarity, whether you are onboarding a retail investor or a hedge fund. He gives the example of a digital onboarding portal versus email communication. With a portal, you guide the client through a structured journey. They know what to upload. They see their progress. They can complete it in one sitting.
Compare that to email. Documents get lost. Instructions are unclear. Turnaround time drags out for weeks. It is exhausting for both sides. This matters not just for efficiency, but for competitive advantage. In fintech, switching costs are low. If another provider offers a smoother onboarding, your client will go with them. Compliance becomes a differentiator.
In high volume environments, having visibility into your funnel is critical. Kon explains how data driven compliance can dramatically improve outcomes.
With ten thousand clients entering your funnel daily, you must understand where they drop off, why, and what it costs you, he says. Are clients from a particular country failing document verification Is it because the ID they use does not match your format Are you asking the wrong questions Are you triggering unnecessary false positives
He worked with a client whose onboarding drop off rate was over forty percent. They were rejecting users based on machine readable zones in ID documents that do not exist in that country. The issue was not fraud. It was poor localization.
By analysing the funnel and adjusting requirements dynamically based on user profiles, they reduced false positives and increased successful verifications without compromising risk thresholds. That is the power of treating compliance as a data problem. It is not just about checking boxes. It is about optimizing flows.
Despite the promise of digital compliance, Kon says regulations in some countries are actively holding back innovation.
In Switzerland, in most cases FINMA still requires a bank transfer to complete onboarding, even for digital first platforms, he says. This makes no sense in crypto. Or for global clients without Swiss bank accounts. He walks through the four approved methods for identification under Swiss AML law. In person onboarding, mail based with notarized copies, online identification, or live video interviews.
Video calls are expensive and slow. You need someone on call twenty four seven. And they are not necessarily better at verifying documents than a machine. Even when online ID checks are allowed, they come with caveats. You still need to collect utility bills to prove address. But PDF bills are easy to fake. And you cannot rely on modern alternatives like geolocation as a replacement of old methods like utility bills, even though they are more secure.
The result Kon says Swiss based fintech's are forced into outdated processes. Many default to targeting only domestic B2B clients as a workaround. The compliance requirement is written in a way that blocks global scale. It is costing Switzerland a competitive edge.
Looking ahead, Kon sees a shift from KYC to KYR: Know Your Risk.
It is not enough to know someone’s name and date of birth. You need a complete picture of their context, behaviour, and risk profile. He envisions AI driven systems that analyse dozens of factors in real time to produce risk adjusted onboarding flows. Instead of one rule set for everyone, you create dynamic journeys. A low risk client flies through. A flagged profile triggers manual review or additional steps. And that is where digital identity comes in. We have had the same model for thousands of years: a piece of paper from your city hall. But in a digital world, we need reusable identities that are portable, verifiable, and secure.
Kon is particularly excited about blockchain based solutions.
They are not tied to a single government. They are interoperable across platforms. Once verified, your digital identity can unlock multiple services without repeating KYC each time. This applies not just to people but AI agents. Soon, your virtual assistant or AI agent will not just schedule meetings. It will execute transactions. It will need its own identity. And you will need to trust that it is really yours.
Kon closes with a final insight. Compliance cannot be siloed. Too often, the compliance team works in isolation. They are seen as the people who say no, he says. But compliance should enable business, not kill it. He encourages companies to align compliance with commercial strategy.
If your compliance process delays onboarding, you are delaying revenue. If your risk model is too rigid, you are rejecting good clients. And if your team is burned out chasing false positives, they are not adding value. The future, he says, lies in collaboration between compliance, product, sales, and tech. Compliance people need to become data people. Product people need to understand regulation. And founders need to see compliance not as a barrier but as a lever for growth.