How open finance can help prevent synthetic identity fraud in account opening

Fraud doesn’t just drain revenue — it breaks trust. Once confidence is shaken, businesses risk losing customers for good. To stay ahead, organizations need to prove they can protect people, act transparently and deliver real value. Open finance can help power that shift, bringing stronger identity verification, richer contextual insights and faster ways to detect and mitigate fraud earlier.

In this post, we’ll explore how open finance can help organizations spot fraud sooner, verify identities faster and build the trust consumers expect.

New-account fraud is when fraudsters use stolen, fake or manipulated identity information to open accounts with financial service providers, e-commerce sites or utilities. By posing as real customers, they can slip past digital security checks — either by impersonating someone outright or piecing together stolen and forged data to create a synthetic identity that looks real enough to get through.

That process, called synthetic identity fraud, is among the fastest-growing types of financial crime in the U.S., and it’s one of the most difficult to detect. To an organization’s validation filters, the thief may look like a genuine applicant with a thin credit file.

Synthetic identity fraud costs businesses up to $40 billion globally every year, and those losses are expected to continue rising as AI makes cybercrime easier and cheaper at scale. With affordable generative AI tools, scammers can mass-produce fake documentation, phishing messages, synthetic voice clones and deepfake videos to manipulate victims into approving fraudulent transactions. This has fueled a surge in deepfake-driven scam activity, which is now more than 20 times more common than it was three years ago.

That’s where open finance comes into the picture.

Permission-based data sharing gives organizations a sharper view of account behavior and identity signals, helping them spot synthetic identities and other fraud attempts earlier — before they gain momentum. Open finance data can power AI cybersecurity tools to check whether the details a potential customer enters during onboarding — including name, address, email and phone number — match the records held by their bank. Following appropriate consumer permission and disclosure, account ownership verification and identity signal analysis can support faster checks with less customer friction.

Mastercard Open Finance offers a networked product suite that applies consumer-permissioned data, device intelligence and predictive scoring to help fight fraud at scale and turn data sharing into a force for trust. Drawing on insights from more than 100 million connections with financial institutions, Mastercard Account Owner Verification can almost instantly verify account details, including routing and account numbers, to mitigate fraud and transform the user experience. This enables massive savings: one financial institution reduced its fraud losses by $100,000 within three months of instituting Account Owner Verification.

Organizations that adopt open finance are already reaping the rewards, in better fraud protection and stronger customer relationships. According to a survey conducted by Mastercard, 60% of these companies can now generate real-time insights about risk and customer engagement, and 57% have strengthened their security and fraud protocols.

Open finance helps financial institutions and organizations protect consumers without sacrificing digital experiences. As trust becomes a key competitive differentiator, ecosystem players like Mastercard are helping turn data sharing into a force for growth that can benefit businesses and consumers.

Trust is the engine of open finance. Trust that data will be handled responsibly, [in line with applicable data protection laws and open finance frameworks, with clear consent, defined purposes ]and that consumers will receive meaningful value in return, is what motivates people to grant access to their financial data.

“Nothing is possible without trust,” said Jess Turner, executive vice president and global head of open finance and developer experience at Mastercard, during Mastercard’s 2026 Open Finance & AI Summit. “Now, it’s more fundamental than ever. Consumers have to trust you with their data. They have to trust that they own it, they control it, they benefit from it, and we will protect it.”

For companies adopting open finance tools, building that trust is becoming a defining competitive edge, but it also remains a significant hurdle. Privacy and security concerns are the biggest barriers to broader consumer adoption of open finance. Nearly half of global users have misgivings about how their financial information is shared. A third worry that their data will be hacked, and 18% fear losing control of their data.

Transparent, digestible communication about open finance is the most powerful tool for reassuring skeptical customers. Businesses can allay consumers’ concerns by clearly and succinctly explaining the benefits and offering straightforward descriptions of fees, risks and how the company uses data. They can also outline their security safeguards at critical moments, such as when the consumer is about to click “share.”

When businesses get this right, consumer confidence will drive a trust flywheel. As people feel more secure sharing their financial data, institutions can use that information to fuel advanced AI systems that operate behind the scenes to help fight cybercrime faster and with less friction for genuine customers. In other words, consumers’ confidence will ultimately strengthen protection: the more comfortable users are sharing data, the more secure the experience becomes.

Explore Mastercard Open Finance account opening use cases to see how permissioned data, Account Owner Verification and identity insights can help reduce risk while keeping onboarding fast and seamless. Or request a demo to learn how Mastercard Open Finance can support your fraud prevention strategy.