Fintech in Argentina: 7 reasons up to 40% of conversions are lost to poor KYC (and how to fix it with Didit)

Key takeaways (TL;DR):

In Argentina, fintechs lose up to 40% of conversions due to slow, fragmented, or confusing KYC flows.

Poor onboarding doesn’t just hurt UX—it lifts CAC, reduces revenue, and raises exposure to fraud.

Complying with UIF shouldn’t create friction; with risk-based, intelligent flows you can comply better and convert more.

Didit unifies document, biometric, and AML checks in a single flow, cutting times to seconds and improving approval rates.

Argentina’s fintech boom is real: 2024 ended with 340+ active companies per the Argentine Fintech Chamber, and digital credit already serving 6+ million users.

But there’s a silent trap almost everyone falls into: a KYC (Know Your Customer) process that’s slow, frustrating, or poorly integrated can cost up to 40% of conversions.

Fintech users expect an instant, mobile-first experience. If identity verification takes more than a minute, the selfie fails, or they have to re-upload their ID multiple times, they drop off.

And in a context where digital fraud is growing 20%+ YoY (UFECI report, 2024), product teams can’t afford to choose between security and conversion—they need both.

This article explains why it happens, how it impacts revenue, and what founders and product teams can do to turn KYC in Argentina into a competitive edge with Didit—an identity verification platform built to remove friction, meet Unidad de Información Financiera (UIF) requirements, and increase conversion.

Why KYC in Argentina throttles conversion (the 7 key reasons)

Fintech adoption in Argentina is booming, but every bit of friction during signup translates into lost customers. In a market where switching apps is one tap away, identity verification can’t feel like red tape—it must be a natural part of your product flow.

Poorly designed verification destroys 25–40% of conversion in fintechs. In Argentina, document and regulatory complexity amplify the effect.

Three main factors collide:

1. Strict UIF regulation with resolutions that require a risk-based approach.
2. Document fragmentation, with multiple DNI formats still in circulation.
3. Rising digital fraud, forcing tighter controls without breaking the user experience.

In this environment, bad KYC doesn’t just slow acquisition—it slows growth.

1️⃣ Too many steps and screens

Every extra screen is a chance to abandon. Flows that duplicate forms, split ID capture from the selfie, or ask for data already entered increase user fatigue.

2️⃣ Slow response times

Checks that take longer than 60–90 seconds erode trust. In international studies, slow onboarding accounts for 45%+ of customer losses in financial services.

3️⃣ Low accuracy in reading and validation

OCR errors, glare in photos, or overly sensitive liveness checks multiply retries. After three failed attempts, abandonment is almost guaranteed.

4️⃣ No fallback or smart escalation

Without guided retries, alternative uploads, or fast manual review, legitimate users get pushed out of the flow with no way back.

5️⃣ Disconnected vendors and blind metrics

Integrating multiple vendors without an orchestration layer creates inconsistencies: each one “approves” or “rejects” with different criteria, making it impossible to pinpoint friction.

6️⃣ One-size-fits-all policies with no risk-based approach

Applying the same level of scrutiny to everyone contradicts UIF’s principles. Low-risk users need less friction; high-risk users need more checks. Not differentiating kills conversion.

7️⃣ Confusing communication and microcopy

Technical or ambiguous messages cause avoidable errors. Clear prompts like “Avoid glare on your ID” or “Look straight at the camera” help reduce drop-off.

Business impact: revenue, CAC, risk, and fraud

The impact of bad KYC goes far beyond UX—it directly hits your financial model, mainly across revenue, customer acquisition cost (CAC), and fraud.

• Lost revenue: Anyone who starts signup already trusts you enough to share data. If they drop because of friction, that trust turns into loss. Lifting completion by even a few points can mean thousands of new accounts or active loans.
• Inflated CAC: When 40% of leads don’t complete verification, effective CAC doubles and drags on your metrics.
• Reputational risk: Missing step-by-step KYC metrics makes it harder to justify improvements to compliance teams or investors. Frustrated users erode trust and leave negative feedback.
• Fraud and losses: Digital fraud rises year after year. In 2024 there were 34,000+ complaints for cybercrime, many tied to identity theft. A weak verification flow not only loses conversions—it opens the door to fraud.

How to fix it: the Argentine fintech KYC blueprint with Didit

The goal isn’t to verify more—it’s to verify better. For years, KYC was an unavoidable bottleneck: fragmented flows, multiple vendors, and product teams stuck balancing compliance and conversion.

Didit changed that. Our platform turns a regulatory process into a smooth, user-centered experience—combining intelligent automation, technical flexibility, and full UIF compliance.

The result: verification that takes seconds, not minutes—reducing friction without compromising security.

One flow, multiple checks (no vendor switching)

Traditionally you needed separate providers for ID document checks, biometrics, and watchlists. With Didit, it all happens in a single flow.

Whether you integrate the KYC API or use verification links (no-code), each step runs logically—from document validation to facial comparison (1:1 Facial Match and liveness).

This unification simplifies the user experience and gives product teams full control and traceability.

No redirects, no intermediate screens, no context lost. The impact is immediate: fewer drop-offs, more approvals, and consistent data to analyze your onboarding funnel.

Risk-based, adaptive KYC

The most efficient fintechs are risk-adaptive: verification intensity varies by customer and product risk. Complying with UIF doesn’t mean asking (or analyzing) the same from everyone.

Didit makes this model easy: tailor the verification flow to risk so each company can add the checks needed to truly know each customer before starting a commercial relationship.

This approach meets regulation, reduces friction, and improves approval rates without losing control.

Responses in seconds, not minutes

In KYC, time is the top predictor of abandonment. That’s why speed is a core product KPI at Didit: verifications process in under 30 seconds, even during traffic spikes.

Under the hood is a machine learning and AI engine that analyzes documents, evaluates biometric patterns, and runs fuzzy-logic checks against watchlists, sanctions, and PEPs.

When manual review is required, teams are notified in real time to keep the experience fast and consistent.

Users feel in control and see immediacy—two conversion drivers.

UX that converts: mobile-first and clear microcopy

Over 80% of fintech users in Argentina start registration on mobile. Desktop-only KYC slows and frustrates users.

Didit is designed mobile-first, with guided, real-time capture, visual feedback, and clear messaging at each step.

Client tests show this attention to detail reduces abandonment by 15–25%, especially during selfie and ID upload.

Verification stops feeling like an audit and becomes a smooth interaction aligned with the product promise.

Cost control

With margins tighter than ever, your cost model matters as much as approval rate. Didit removes monthly minimums, lock-in contracts, and inflexible licenses.

Thanks to our free, unlimited KYC plan, to which you can add whatever capabilities you need, fintechs can build fully customized verification flows, scale safely, and pay only for what they use.

Combined with fewer manual reviews, this enables savings of up to 70% versus traditional vendors (per real Didit implementations)—without sacrificing quality or compliance.

Business case: what improvements to expect

Over 4,000 companies worldwide already use Didit, and these are some of their success stories. Common outcomes include:

• Cost reductions (70–90% in some cases).
• Fewer support tickets and faster reviews.
• Higher conversion rates.
• Significant reduction in manual tasks.

It’s not just about meeting regulation—it’s about using technology to comply better and convert faster.

Conclusion: Convert more, comply better, grow faster

A fintech’s success doesn’t depend only on product or acquisition. It hinges on the ability to convert users without friction and comply precisely.

KYC—once a legal checkbox—is now a driver of trust and growth. Every second you save, every bit of friction you remove, every user who completes signup without frustration… flows straight to revenue, reputation, and operational efficiency.

Didit was built for exactly this: to help fintechs verify without slowing growth. Our technology turns compliance into competitive advantage—integrating security, speed, and experience in one flow.

The future of finance isn’t just about innovating—it’s about scaling trust.

And that starts with truly knowing every customer, from the very first click.