Onboarding Friction: KYC vs. Operational Reality
Curious if others are seeing an increasing disconnect between the KYC/AML hurdles new counterparties are facing, particularly smaller prop firms or those looking to onboard non-traditional liquidity sources, and the actual operational benefits for larger institutions. It feels like the paperwork and verification processes have become so front-loaded and intensive that it's actively stifling new deal flow, especially for firms trying to gain access to more nuanced product offerings or competitive spreads. Are we genuinely improving risk profiles, or just creating a higher barrier to entry that ultimately limits optionality in the market? Would be interested to hear about specific bottlenecks or successful strategies for navigating this without compromising compliance.
Definitely seeing that disconnect. We've had a few promising smaller partners just give up due to the sheer volume of compliance requests, which feels counterproductive.