Thu. Jul 11th, 2024

An address is a crucial identifier for confirming a user’s identity. When creating a bank account or other public account, address verification is frequently needed to demonstrate residency and aid in Know Your Customer (KYC) regulation and fraud prevention.

Address verification is also used to verify that services are only offered to clients who live inside a certain geographic area. Aside from ensuring compliance, address validation also aids in the prevention of fraudulent or undesired online activity. To prevent spammers and marketers from spamming their neighbourhoods, social media sites or neighboring apps may seek to limit users to residents exclusively.

Obtaining proof of address has traditionally been a time-consuming, manual procedure that occurs in a bad account opening encounter. Using manual inspections to confirm residency paperwork exposes consumers to the risk of human error, as well as extra resistance and delays.

Users must find, scan, and deliver pages of documentation in the appropriate format. Due to manual inspections and practices, what should be a quick onboarding experience takes days (or even weeks). Because there are so many different types of documents and suppliers, document inspection standards might vary greatly, posing a risk of fraud or theft. Manual inspections of physical papers are inefficient in today’s world of instant satisfaction, and better techniques must be developed.

What is proof of address?

Address verification is confirmation that a person’s declared address corresponds to their real physical address. The genuine address must be provided, as well as proof that the individual is currently residing there.

Some financial institutions are only accessible to inhabitants of that region, or involvement is somehow limited based on the user’s location. For instance, cryptocurrencies in Europe may refuse to allow consumers from the United States in order to avoid SEC punishment for dealing in unlicensed commodities. According to Shufti Pro Funding, the amount of capital loss each year is 1.6 trillion US dollars because of faulty customer service. 

These limitations could be the consequence of legal or legislative obligations, or they could be the result of corporate policy. The use of address validation to verify address data allows these firms to provide services online while also ensuring that any regulations or internal policy/procedural needs are met. According to Shufti pro news, 18% of addresses provided by the clients are prone to mistakes. 

Proof of residency document is one of the many ways to present geographical evidence (Affidavit of Residence). Nonetheless, supplying documentation that validates address, dates of business, and the user’s name on the account is the most usual technique to help verify the location. Each business has its own set of approved documents, however here are some examples:

  • Utility bill
  • Bank statement
  • Employment letter
  • Credit card bill
  • Tax bill
  • Tenancy agreement

Problems with traditional address verification method

No Template

Consider how many various types of methods might be able to provide residency proof. When you consider all of the numerous organizations, as well as the varying styles, forms, and content, it’s easy to see how difficult it is to determine the legitimacy and integrity of a residence document. Hundreds of possibly acceptable papers may exist relying on the use case, with little to no resemblance or guidelines from which to draw conclusions.

An Unpleasant Customer Onboarding Experience

A potential client wants to join up and use the service as soon as possible. They don’t want to start searching through folders for a document, then sending it in, scanning it properly, and waiting for it to be accepted. According to one study, asking clients to present identification documents resulted in 50% of applicant drop-offs.

Document management costs

Aside from the potential for substantial errors and delayed processes, the costs of performing manual inspections can soon build up. While evaluating a few dozen applicants per month is manageable, processing hundreds or even thousands becomes a time-consuming and expensive task. Expenses for archives, resends, and other documentation handling are important factors to consider.

Innovation in Proof of Address Procedure

Technological advances, luckily, provide proof of address methods that expedite digital onboarding, streamline address validations, and aid in greater compliance and fraud protection. It’s not a wizard tech that helps build the most strong evidence of address functionality, as it is with other effective identity validation procedures. Instead, it’s a blend of multiple innovations in smart frameworks.

Address Verification is the Future

The use of address verification is a basic practice in identification verification. Clients provide their address details, which are then compared to data from credit agencies, utility organizations, government authorities, and other resources.

Verification of address ensures the right hierarchical alignments of address data for further evaluation. Address verification system can generate a fit or no-fit signal if the consumer has lived at that location for a long time. It’s worth noting that the effectiveness of this type of match is contingent on the database being requested having up-to-date address details.

Address verification services assist companies by streamlining their onboarding process and minimizing the need for manual paperwork which saves a lot of time and money. 

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