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Online Address Verification – A Proven Way to Eliminate Financial Fraud

Even with the growth of digital trends, the banking sector must continue to be wary of fraud. Although consumers are more inclined to use digital tools to enhance customer service, the crime rate highlights numerous weaknesses in the banking system. E-commerce websites and meal delivery applications are becoming incredibly common in this digital age. For the purpose of avoiding financial errors, KYC compliance mechanisms must be in place. One of the most important KYC elements is the procedure for verifying addresses for secure financial transactions.

The Financial Times reports that forged online address verification and KYC have been the main causes of the 39% increase in fraud rates. To accomplish their evil intentions, criminals use illegal means.

What is an Address Verification System? 

Businesses are very concerned about their financial security, and digital models provide ways to validate addresses for better data security. Prior to any transactions being made, address verification system as a primary means of confirming the customer’s address. Regardless of whether the address is accurate or not, it is imperative to provide identification. In order to avoid being the victim of illicit tricks, address verification has become necessary. 

Significance of Address Verification

Companies in the financial sector recommend online address verification for security purposes. A client’s data is incomplete without an address, and if an error occurs, both the organization and the digital onboarding customer are held liable. Among the most important KYC components is understanding the significance and peculiarities of address verification as well as the relevant papers. The digital age does not allow for the acceptance of crimes. Almost every industry, including travel, hotels, services, and businesses, needs accurate consumer data, especially current address information. In the event of any unfavorable circumstance, such as a credit card delinquency or cybercrime, for instance, the objective is to get in touch with the fraudster. 

Verifying an Address – Complete Checklist 

Financial platforms are multiplying on a regular basis, and digitalization is a primary focus for them. It is critical to understand the list of documents required for correct address verification. A passport, identity card, driver’s license, insurance policy, utility bill, bank statement, rent agreement, tax bill, and other documents were on the list. All of these documents need automatic verification for proof of address confirmation. OCR software is used in systematic proofreading. The program validates the papers for accuracy and precision. While checking, it extracts the person’s name for validation. The AI-powered program recognizes whether a document has been edited or fabricated right away. Additionally, the identification that lists the business address should be no older than three months. It implies updating all the data on a regular basis to facilitate ongoing oversight. 

Benefits of Customer Address Verification 

Businesses are broadening the scope of their protocols in order to reap significant benefits. The following are a few advantages.

Reduces the Crime Rate

It is vital to understand that organizations are seeking reliable address verification methods due to rising fraud. According to Bloomberg, online address verification exposes the bulk of refunds, and a digital verification service provider provides 100% verification to prevent malicious actions. It serves as a metaphor for the necessity of meticulous verification in the multibillion-dollar insurance, banking, and other financial industries. 

Reducing Wrong Shipments

The company is ready to handle frequent package returns in the event that a customer has a bad experience. In 2021, fraudulent returns of packages will increase by 78%, according to The Financial Times.

Improved Customer Experience 

Companies concentrate on consumer expectations in addition to corporate purposes. A user-friendly experience requires precise customer information, including an exact address. It is necessary to maintain an up-to-date customer database to thwart fraudsters and enhance the user experience. 

Complying with Rules Regulatory Organizations 

In terms of regulatory compliance precautions to fight against money laundering and terrorism funding, the FATF is ranked as the top organization in the world. The implementation of the address verification feature ensures corporate security. Even though not all of the functions have been completely implemented, the FATF is tightening the restrictions for non-compliant partners. Compliance with online address verification regulations is a major problem for the World Bank, the IMF, and other financial organizations. 

Final Thoughts

To fight malicious activities, all company partners should be on board. To ensure KYC across all industries, strict legislation must be imposed in both developed and developing countries. The global financial dynamics are shifting as a result of technological innovation. The financial industry is embracing address verification more and more. Today’s digital systems no longer support traditional verification, because of the management and risk associated with transaction information. The use of AI models ensures the security of the financial platform and the effectiveness of the process. To guarantee efficiency, businesses use AI models for the procedure and the safety of the financial platform. 

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