Address Verification Service in Banks and Other Sectors

Address Verification Service in Banks and Other Sectors

Since the increase in fraudulent activities, the banks, and other sectors are shifting towards solutions to validate their clients. Many online sectors have already deployed advanced identity verification solutions and address verification for legitimate client onboarding. Without verifying customers, the probability of illicit activities increases significantly. Thus, there is a pressing need for online address verification services to deter fraudulent activities.

Address verification is the procedure that validates the business or residential address of a client before they open up an account or make any transactions. It helps banks and other financial sectors to check that only legitimate users make transactions and that the payments are carried out securely. Checking that the address was given by the client exists actually is crucial to validate the identity of the client.


Documents Required to Verify Address

It is worthy to note that the address verification system accepts only those documents which are not old than three months. If someone submitted documents much older than the mentioned period, the verification system rejects them automatically. Below are the documents required to validate address of the client:

  • Identity card
  • Employer letter
  • Passport
  • Driver’s license
  • Bank statement
  • Envelope
  • CPR smart
  • Insurance agreement
  • Utility bill
  • Tax bill
  • Rent agreement

All the above-mentioned documents constitute Proof of Address (short for POA) and they should be upgraded too. As the authenticity of the document is checked, OCR software is used to extract the name, insurance date, and address mentioned on the document. During the verification of address, the software scans and authentications the complete name of the client present on the document. In case the document is photoshopped, the system quickly detects it. The advanced address verification system that uses artificial intelligence or other neural networks can also detect folded edges in the provided document. This is how verifying address helps banks and other sectors prevent fraudulent activities.


Why is Address Verification Service Required?

As the world has gone online, the need for robust address verification has increased. There are a lot many reasons why any firm whether it is a bank or e-commerce needs an address verification service. Let’s look at how verifying an address benefits businesses.

Fraud Prevention

One of the many reasons why banks, e-commerce or any other firm needs to verify the addresses of their clients is to avoid fraud. With digitization, fraudulent transactions returned shipments, and many other crimes have increased dramatically. This damages the reputation of the firm. Moreover, having no verification solutions in place, the companies have to pay non-compliance fines. Thus, all these issues can be resolved by adopting strong identity and address verification systems.


Greater Customer Experience

Every firm strives hard to enhance their client experience as customers are the true asset of any firm be it a bank, e-commerce, or any other institution. Robust address verification services not only provide a seamless experience to the clients but also help them carry out their transactions in no time. Moreover, having the correct address help firms communicate as well as deliver parcels in the set time. So, when clients are satisfied, they talk about the company with their friends’ circle. This builds the company’s credibility and in return generates great revenue for the firm.


Compliance With FATF Recommendations

The FATF recommends firms run identity verification tests to check that the particular individual is not a threat to the company. Verification checks not only are an important factor but also for the company’s integrity.  Having address verification services in place, would not only enables firms to authenticate their clients but also make them stay compliant with the KYC/AML standards. Moreover, the regulatory authority has also introduced 6AMLD which has made regulatory compliance even more complex. Thus, it is critical for banks and other companies to deploy identity verification services including address verification if they really want to adhere to KYC/AML compliance. It will help them prevent heavy non-compliance penalties and also build its positive image in the competitive market.


Final Thoughts

It’s not only the banks that require address verification but there is a dire need for these services in the e-commerce and other sectors to avoid fraudulent transactions, chargebacks, and other illicit activities. As technology is progressing, so do the fraudsters. They are coming up with sophisticated methods to dodge verification solutions. Thus, robust verification solutions that use artificial intelligence and other neural networks can be the gateway to tackling heinous financial crimes in this digital world.