Harnessing the power of identity insights for smarter account opening

• Account opening is a high-stakes process that sets the tone for experience throughout the customer lifecycle. 
• Fraudulent digital account creation attempts remain a top concern, making early fraud prevention decisions critical. 
• Platforms can benefit from additional identity insights to make smarter decisions and approve trusted users faster while flagging risky ones.

Account opening is a pivotal point in the customer lifecycle. It’s the first moment a user interacts with a platform, and the moment businesses start building — or losing — trust.

The challenge is striking the right balance between security and seamless onboarding. Customers want low-effort account creation, and they won’t hesitate to walk away if the process feels complicated. Case in point: 90% of businesses see some form of customer abandonment during onboarding. [1]

Still, fraudulent digital account creation attempts remain a persistent challenge. AI tools are helping fraudsters scale their operations, with some using generative AI to mass-produce synthetic identities using a blend of real and fabricated information. By 2030, losses from synthetic identity fraud are expected to reach $23 billion, according to Deloitte.

In this landscape, businesses need a balanced approval flow to keep onboarding running smoothly. If a platform sends every applicant through the same verification process, teams may waste valuable time and money reviewing fraudulent users. On the other hand, if an identity verification process is too rigid, platforms may reject legitimate customers simply because their identity information seems incomplete. 

Smarter identity verification changes that dynamic. With comprehensive information at account opening, you can approve more trusted users, identify fraud earlier and start the customer journey off on the right foot.

If your business doesn’t calibrate identity verification correctly, issues at account opening spill into the rest of the customer lifecycle, creating avoidable challenges for internal teams:

Without accurate identity insights at account opening, you may spend resources on regulatory compliance for fraudulent transactions. For example, a platform might run costly KYC/AML checks or store personal data for GDPR compliance on an account that is later found to be synthetic or fraudulent.

A one-size-fits-all approach to verification puts unnecessary strain on operations teams and potentially wastes time and money.

When bad actors create fake accounts, it exposes your business to a range of costly abuses, including fraudulent reviews and purchases made with stolen credit cards. Fraudsters can also use fake accounts for inventory hoarding (reserving high-demand items so real customers can’t access them) or to commit rewards fraud by collecting incentives meant for legitimate users. 

This activity directly drives financial losses. When customers dispute fraudulent transactions, businesses often absorb the cost of the resulting chargeback. Global chargeback volume is projected to reach ​​​​324 million transactions annually by 2028, which means account fraud will only become more expensive. 

Users with limited digital history or thin files can appear suspicious, even when they’re completely genuine. For instance, people with minimal credit history or no long-term address records might be flagged during review.  

If your platform confuses trustworthy users with potential fraudsters, you may decline people who should actually be approved. Over time, repeatedly turning away potential customers slows growth and cuts into revenue.

Real-time identity insights provide context for your business to make smarter decisions at account opening. By understanding how digital identity inputs interact and are used over time, you can enhance trust and efficiency across the customer lifecycle in the following ways:

Real-time identity insights fill the gaps in traditional verification checks that can misidentify certain people as suspicious. Often, thin-file applicants are simply new to an area, students early in their financial journey or people who haven’t used credit cards often in the past.

Rather than automatically flagging these applicants as risky, a digital identification verification process can analyze multiple identity inputs, such as phone number, email address and IP location, with historical context to paint a clearer picture of a digital identity.

For example, an account opening that includes short, incomplete or tumbled address records could signal fraud. But if that account is associated with a longstanding email address and multiple identity inputs in their account opening registration have appeared together previously, it’s a strong signal that the account is not being created by a fraud actor.

Since identity insights can better inform businesses about the potential for risks early in the onboarding process, teams don’t need to spend time and money on compliance checks for fraudulent accounts that should never have entered the platform in the first place.  

And fewer fraudulent accounts means less fraud investigation and dispute work down the line, further reducing operational drag for teams. 

Customers expect fast and intuitive account creation, but they also want to know that platforms are protecting their information. Seventy-seven percent of consumers prioritize security over speed when shopping online, and 90% say that the digital identity verification process influences their level of trust in an organization, according to Mastercard research. 

A smarter, risk-based verification flow helps you deliver speed and trust simultaneously. By analyzing patterns in real-time to detect the potential for fraud, you can move trusted users through onboarding with fewer interruptions, and route riskier accounts through additional checks as needed.

In a sea of similar onboarding experiences, contextual intelligence makes your platform stand out. A simple yet secure signup process builds early trust with customers and shows that your business is easy — and safe — to work with.

Curious how smarter user verification works in practice? Learn how Lyft used identity insights to get trusted riders on the road faster:

The challenge: As Lyft’s platform grew, so did the pressure on its onboarding experience. Too many users were abandoning the account signup process while internal teams were bogged down with manual work. Lyft needed a way to minimize false positives and unnecessary disputes without slowing trusted users from joining. 

The solution: Lyft partnered with Mastercard to integrate identity intelligence into its verification process. By referencing these insights at account signup, Lyft could validate account applicants more precisely, even with limited information. 

The impact: With identity insights, Lyft now moves trusted users through new account openings faster while catching fraud earlier.

The result is a simpler verification flow for both users and internal teams, designed to welcome more real riders to the platform.

“With support from Mastercard, we’ve improved how we validate users at signup, reducing complexity, protecting trust and moving real riders through more confidently,” says Zach Jalbert, Principal Program Lead, Identity & Integrity at Lyft.

Digital identity verification should stop fraudulent accounts from taking root, but it shouldn’t treat every digital interaction as a risk. Instead, leading platforms are strengthening their security and improving the customer experience with identity insights.

Mastercard Identity provides dynamic digital identity insights so your platform can verify identity with confidence. A responsive digital verification process means fewer hoops to convert trusted customers, less back-and-forth for your teams and a stronger defense to prevent fraud from reaching your ecosystem. 

Ready to transform account opening? Explore how Mastercard’s Identity Insights can help you welcome more customers and protect your platform as you grow.