An address is an important identification factor to verify a person’s identity. Proof of address is required whenever an individual tries to open a bank account or sign up for other services. This proof of address verification is also vital for KYC/KYB and AML compliance to mitigate fraudulent activities.
Proof of address is also used to ensure that certain services can be offered to certain customers living in a particular geographical area. Other than compliance, address verification is also important for reducing fraud and unwanted activities online. Before the growth of digital banking services, proof of address used to be verified manually. Manual verification leads to a poor customer experience, and the process is not secure. There is a lot of friction in manual verification and delays for customers.
Customers trying to open a new account or sign up to new services have to locate, scan and send pages of address documents in the required format. With the growth of digital banking services, it has become easier to onboard a customer, but the manual process creates unnecessary friction and takes more time. A variety of documents have to be collected and verified, and different documents require different verification methods. All these complications and lack of ideal technology are potentially weak points that can lead to an increased rate of forgery and theft.
Now that the technology can provide online instant verification, manual verification methods are inefficient, and better proof of address verification methods is needed.
What is a Proof of Address?
Proof of address is evidence that a person lives at a particular residence that matches their mentioned address. The address provided by customers needs to exist in reality to support the proof that the specific person lives there.
In financial services, some particular services are only available to people living in certain areas. Restrictions like these might result from legal or regulatory requirements, and some may be based on company policies. Verifying address information through proof of address documents is crucial for companies providing a variety of financial services.
There are a variety of documents that can be used for address proof verification. However, the most common way to verify an address is by using documents that provide address details. Each service has different requirements for document type; here are the most common documents for verifying address:
- Utility Bills
- Tax return documents
- Bank Statements
- Credit card bills
- Rental Agreement/Tenant Agreement
- Employment letter
Common Problems with Proof of Address Documents
The proof of address verification process is a complicated and slow process. Technological solutions such as DIRO’s online document verification can verify address documents in an instant and verify if a document is authentic or not. Without the use of DIRO’s technology, some complications come with proof of address document verification.
- No Proof of Address Template
Consider how many types of services offer document verification for proof of address. Imagine the sheer number of various organization types, document types, formats, and information, and the problem of determining the authenticity of the documents is a tough process. Based on the use case, there may be countless document types and different verification methods for all of them.
- Poor Customer Onboarding Experience
Digital services have changed customers’ needs, and they want instant access to services they want to sign up on. Customers don’t have the time required to wait for days to sign up for the services. Complicated processes can lead to an increase in the customer dropout rate.
Part of the issue is the lack of the right kind of technologies for the verification of addresses. Another issue is dealing with physical documents in the digital industry. Organizations that require you to scan documents and upload them for signing up to new services can create unnecessary friction.
- Cost of Handing Documents
Manual verification of documents is costly as the costs can all add up over time. Processing a couple of dozens of applications each month is doable manually, but verifying thousands of documents each month is almost impossible. There are additional costs of record-keeping, rechecks, and other document handling costs.
- New Proof of Address Processes
Fortunately, new technologies like DIRO’s online document verification offer address verification that speed up onboarding automate address verification and offer a better compliance process. Different technologies offer different solutions that improve workflow and overall user experience.
- Address Verification
One common process for verifying identities is using address verification. Customers submit their address information, which is then matched against government databases, credit bureaus, and various other data sources.
Address verification helps in making sure the address information provided by the customers is real. Having an address verification is an important step for verifying customer identity.
Proof of Address Verification Best Practices
Every organization that needs proof of address needs to sign customers up for new services and verify the details. It is crucial to understand what is ideal for your customers and your organization requires a crucial understanding of how the industry works.
One ideal solution for verifying proof of address is by employing DIRO’s online document verification solutions. The technology allows you to verify documents instantly and provides 100% verifiable credentials, and provides court-admissible evidence with forensic data.