Why has the average time to complete KYC verification on Coinbase doubled over the last month?

Introduction

The doubling of average KYC verification time on Coinbase over the last month is a critical issue that demands immediate attention. This sudden increase in verification duration not only impacts user experience but also poses potential risks to regulatory compliance and business growth. I'll approach this problem systematically, focusing on identifying the root cause, validating hypotheses, and developing both short-term fixes and long-term solutions.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might have been a recent system change. Has Coinbase implemented any updates to the KYC process in the last 1-2 months?

Why it matters: System changes often lead to unexpected performance issues. Expected answer: Yes, there was a recent update. Impact on approach: If yes, we'd focus on the new system; if no, we'd look at other factors.

• Considering user segments, I'm curious about the distribution. Is this increase in verification time consistent across all user types, or are certain segments more affected?

Why it matters: Helps identify if the issue is universal or specific to certain user groups. Expected answer: The increase affects some segments more than others. Impact on approach: If segmented, we'd focus on the most affected groups; if universal, we'd look at system-wide issues.

• Given the importance of data accuracy, I'm wondering about our measurement systems. Have there been any changes to how we measure or define KYC completion time?

Why it matters: Ensures we're comparing apples to apples and not facing a data anomaly. Expected answer: No changes in measurement methodology. Impact on approach: If changed, we'd need to reassess our data; if not, we can trust the current metrics.

• Thinking about external factors, has there been any significant increase in new user sign-ups or changes in user demographics over this period?

Why it matters: A surge in new users or shift in user base could explain increased processing times. Expected answer: Some increase, but not proportional to the KYC time increase. Impact on approach: If significant changes, we'd focus on scaling issues; if not, we'd look more at internal processes.