Address Verification- A Pillar of Strength in KYC
Process
Digital Address verification provides a defense line against different frauds for many
businesses and plays a vital role in Customer Due Diligence.
Financial crimes are clamping up at a fast pace with every passing day. As per the UNODC
(United Nations Office of medicine and Crime) Report, the annual amount of money laundered
is around two to five of the worldwide GDP. These increasing fraudulent activities are
becoming a major point of concern for businesses and regulatory authorities as fraudsters are
coming up with new tricks. Regulatory authorities have strict compliance regimes to regulate
all financial crimes to trace and tackle cybercriminals. Customer Due Diligence by KYC and
AML compliance is the main compliances introduced by the regulatory authorities and is
mandatory for banks and financial institutions. Address verification plays a vital role in order
to validate the originality of a person.
An Insight to Address Verification:
Fraudsters are using faux and some real information to make up an anonymous identity. To
attenuate the danger and threat of fraudsters Online Address Verification solutions play a
significant role. Since it helps in authenticating and matching the address of people with the
address on their documents it helps a lot in tracing the cybercriminals. By eliminating the risk
of false addresses, the address verification system verifies whether the person actually is who
he/she claims to be or not. The person is asked to provide his address and if the address is
mismatched the verification is rejected. Every type of business whether they are financial
organizations, e-commerce businesses, online marketplaces, or online gaming and gambling
sites need to conduct customer due diligence.
Steps of Digital Address Verification Process:
The address verification process has three key steps listed as following:
● The individual is asked to upload an image of his original documents or ask to show
them live in the camera to match it against the image on the ID document.
● The document containing the correct address information is required to be uploaded to
match the knowledge.
● Then the address is analyzed, and results are provided to the back-office for further
evaluation using both artificial and human intelligence.
Documents Required for Address Verification:
The address is verified from the following documents:
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ID Cards
Driving License
Passport
Bank Statement
Utility Bills
The address is one of the prominent elements that makeup customer identity. It includes both
residential and official addresses. It’s imperative to possess a clean and up-to-date database to
authenticate their identity and minimize the probabilities of any fraudulent practice. Law
enforcement agencies can locate criminals via their addresses.
How is Address Verification related to KYC?
Thanks to the strict KYC/AML regulations, businesses have no option but to verify their
customers so as to see their authenticity and minimize any kind of risk involved. The recent
technological advancement has led to the introduction of online KYC screening solutions that
includes address verification. There are different methods employed to digitally verify
identities nowadays related to the sort of business and its requirements. The commonly used of
those include Facial Verification, Document Verification, Address Verification, 2 Factor
Authentication, and Consent Verification. The accurate address verification is crucial for
businesses operating online to successfully deliver the product to the customer to increase
customer satisfaction and to prevent fraudulent activities. Businesses should adopt an effective
and efficient address verification technique to make checkouts more frictionless by decreasing
product delivery risks and frauds. So address verification adds a pillar of strength to the KYC
process by authenticating a person's true identity by using information on the original
documents.