Why is seamless, safe digital account opening key to faster FinTech growth?

By Puja Sharma

Digital account opening is central to onboarding new customers and growing a business. Open Banking for account opening draws on the safe exchange of consumer-permission data from open banking and identity data network leveraging industry standards, Machine Learning, and fraud prevention programs

Innovations in finance and payments are unlocking new experiences for consumers and FinTechs alike. As of 2022, 78% of adults in the U.S. prefer to bank via a mobile app or website. As more people open accounts and manage their finances online, digital transaction volumes are projected to reach nearly $15 trillion by 2027. With that growth comes more sophisticated fraud, such as account takeover and synthetic identity fraud, impacting consumers and businesses.

Open Banking for account opening draws on the safe exchange of consumer-permission data from open banking and identity data network leveraging industry standards, Machine Learning, and fraud prevention programs. This helps FinTechs and banks confidently know who their customers are and that they own their linked accounts, promoting secure digital account openings for the following:

• Digital wallets
• New bank and/or investment accounts
• Distributions
• Account-based payments

To further its vision of providing safe, simple, and smart choices in payments and financial services, Mastercard is launching an enhanced Open Banking for Account Opening solution. This innovation integrates account owner verification with identity insights into a single API (Application Programming Interface) to help businesses meet their customers’ needs for security and transparency.

“At Mastercard, trust is our business. Our digital identity and open banking networks instill confidence in both sides of an interaction. By securing our online ecosystem, we are delivering on our promise to bring more people and businesses into the digital economy,” said Chris Reid, EVP, of Identity Solutions, Mastercard. 

Mastercard Open Banking for Account Opening verifies a consumer’s account ownership and identity in real time. It also prefills account and routing data, minimizing errors. The result is a simpler, faster, and safer way to open a new account for the 93% of consumers likely to use digital payments this year. For financial institutions and fintech, such as MoneyLion, a Mastercard partner, it means a single, simple solution to verify an individual opening a new account while minimizing friction and risk of fraud.

“At MoneyLion, we see people turn to digital financial services every day for a simple and frictionless user experience. We must deliver service excellence from the beginning of our customer relationship by providing an experience that streamlines the account opening process,” said Dee Choubey, Co-Founder and CEO of MoneyLion. “We are proud to work with innovative and industry-leading partners like Mastercard to offer cutting-edge digital account opening solutions for our suite of financial products that let us prioritize convenience, security, and accessibility for our customers.”

“Digital account opening is central to onboarding new customers and growing a business. Mastercard is uniquely positioned to help FinTech and banks onboard customers safely and seamlessly to accelerate growth while protecting themselves and consumers from the risks of fraud and false declines,” said Jess Turner, EVP, of Global Open Banking and API. 

Partnering with FinTech innovators, Mastercard is supporting them in expanding their customers’ choice in financial experiences through secure digital account openings.