Companies Enforcing Address Verification Method to Shun Criminal Fraud

Address Verification

The rise in digital trends is a positive sign, but fraudulent activities are worrisome for the financial industry. People are more inclined to digital apps for a better service experience, but the crime rate indicates the density of the loopholes in the financial structure. E-commerce platforms or food delivery apps are generally used more in this digital era. KYC compliance mechanisms are necessary to avoid financial mishaps. One of the most important features of KYC is to verify addresses for safe and secure business transactions. 

Financial Times reports a 39% rise in the fraud rate mainly associated with KYC and forged online address verification being promoted on a large scale for fraud purposes. The article would bring close attention to the significance of address verification for crime reduction. 

 

What is the Address Verification System? 

Businesses are largely concerned with financial security, and digital models provide mechanisms to validate address for enhanced data security. Verifying Address is basically about checking the address authentication of the customer before making any transactions. The right address is important to prove the identity, whether it is valid or invalid. With time, verification of address is indispensable to keep the dirty tactics at bay. 

 

Significance of Verification of Address

Organizations and financial industries are recommending address verification now for safety purposes. Without address details, customer details are incomplete and in the case of any lapse, not only the digital onboarding customer is responsible but the company also. One of the most important features of KYC is to understand the value and attributes of address verification and the relevant documents. There is no space for crime acceptance in the digital world. Every industry, like travel, food, services, corporate, etc., demands complete customer data, including updated address details to approach the fraudster in case of any unwanted situation like credit card default, cybercrime, etc. 

 

A List of Documents for Verifying an Address 

Financial channels are increasing day by day, and digitization is at the top of their agenda. For a proper address verify, it is important to know the list of the documents required for the address verification. The list of documents included a passport, identity card, driver’s license, insurance agreement, utility bill, bank statement, rent document, tax bill, etc. All these documents require digital verification for a valid proof of address verification and OCR software is used for systemic proofing. The software intelligently checks the validity of the documents. While checking, it extracts the name of the individual for verification. If the document is forged or photoshopped, the AI-enabled software indicates it immediately. Furthermore, the address documents should not be more than three months old. It means that all the details are required to be updated for constant monitoring. 

 

The Merits of Customer Address Verification 

Businesses are expanding the scale of their protocols for large benefits. There is a bundle of address verification merits which are discussed below. 

 

Curtails Crime rate

It is important to understand why businesses are inclined to address verification approaches, and it is because of rising fraud. Online address verification detects maximum chargebacks and, according to Bloomberg, reveals that a digital verification service provider ensures 100% verification to avert fraudulent actions. It signifies the need for robust address verification in billion dollars banking, insurance, or other financial industries. 

 

Reduction in the Rate of Returned Shipments 

Customer bad experience ends in losses for the company, and no organization is ready to sustain consistently returned shipments. The Financial Times reveals a surge in the number of returned shipments of 78% in 2021. It is estimated that $760bn of products were sent back. 

Enhanced Customer Experience 

Businesses prioritize customer expectations, including business goals. Proper customer details, including a valid address, are mandatory for a better customer experience. For enhanced user experience, an updated record of customers is necessary to avoid fraudsters. 

 

Compliance with Regulatory Bodies 

FATF comes first in regulatory compliance procedures to curb money laundering and terror financing. Installation of the address verification feature ensures business security. All the features are not fully implemented, but FATF is tightening restrictions on non-compliant stakeholders. The World Bank, the IMF, and other financial institutions are showing serious concern about online address verification compliance policies. 

Final Thoughts 

All the stakeholders should be united to combat fraudulent activities. Developed and developing parts of the world need to implement strict regulations to ensure KYC in every business sector. Rising digitization is changing the global financial dynamics. Address verification is becoming more common in the financial sector. Manual verification is not immune to the system anymore because it risks sensitive data and transactions. AI models are used to ensure the efficacy of the process and to secure the financial platform. 

 

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