Just-In-Time (JIT) Onboarding

🔹 Definition

Just-In-Time (JIT) Onboarding refers to a flexible identity verification approach in which customer due diligence (CDD) or full KYC verification is delayed until the moment it’s actually needed, such as when a customer initiates a regulated activity (e.g., sending funds, accessing a service, or making a purchase). This method aims to reduce user friction, increase conversion rates, and improve user experience during sign-up or app registration—especially in fintech, crypto, and digital marketplaces.

JIT onboarding must still comply with regulatory requirements, but allows for progressive data collection and verification based on customer actions and risk level.

🔹 Frequently Asked Questions (FAQs)

Q1: How does JIT onboarding work?

• The user registers with minimal information (e.g., name and email)
• The platform delays full KYC checks until a trigger event, such as:
  • First deposit or withdrawal
  • Reaching a transaction threshold
  • Initiating a regulated service
• At the trigger point, the system requests identity documents or other verification steps

Q2: What are the benefits of JIT onboarding?

• Higher customer conversion by reducing onboarding friction
• Streamlined user experience for low-risk activities
• Efficient allocation of compliance resources by risk-tiering users
• Encourages progressive compliance, balancing regulation and usability

Q3: What are the regulatory risks of JIT onboarding?

• Risk of non-compliance if KYC is not performed before a regulated activity
• Potential exposure to fraud or money laundering if users exploit the delayed verification window
• Must ensure real-time monitoring and enforcement at the trigger points
• Jurisdictions may differ in tolerance for delayed KYC, so legal review is essential

Q4: Where is JIT onboarding commonly used?

• Fintech apps offering wallets, P2P transfers, or investment tools
• Crypto exchanges with tiered verification levels
• Marketplace platforms allowing guest checkout but requiring KYC for high-value sales or payouts
• Neobanks offering savings or debit accounts with initial usage limits

Q5: How can platforms stay compliant while using JIT onboarding?

• Define clear thresholds and trigger conditions for verification
• Integrate automated eKYC tools that activate instantly when needed
• Implement real-time transaction monitoring and risk scoring
• Ensure data is encrypted and retained in line with privacy and AML laws
• Document policy rationale and obtain regulatory guidance where possible