It feels like particularly in finance, that startups who disrupt traditional players do so without a full understanding of all the corner cases and none of the regulatory accountability which is why those traditional finance players were so expensive in the first place.
Kinda depends on how you define "accountability" of course, but rejecting paying customers is usually frowned upon in business. You want your KYC processes to be conservative enough not to get fined, but not so conservative that you lose out on potential revenue.
If you're too far off on either side, you either get fined by whatever regulator you fall under, or you get fined by the stock market because your competitors are more profitable.
If you are closing 1% of your accounts every year, then you'd better be growing at more than 1% per year just to break even. If you don't have an appeal process, you'll eventually restrict everybody: Given enough time, some business/person will eventually do a weird transaction that flags them out.
There are international mechanismis for verifying that countries enforce AML stuff like KYC, but no mechanisms for measuring either how effectice it is nor what it's negative effects are.
Not even corner cases. I worked for a fintech that launched a dda-ish product that had 16 digit account numbers, issued sequentially, with no check digits. At launch there didn't seem to be a CS process for dealing with pretty obvious "customer mistyped account number and sent their money to some else's account." problem.
