The address of an individual is an essential factor in identifying a person’s identity. For example, proof of residence documents is often asked by bank officials when opening a bank account. Government authorities also ask to confirm the residency address to help them with KYC compliance and prevent illegal activities.
Proof of residence documents also ensures that services can be provided to customers even within a geographical location. Furthermore, address verification also helps businesses combat fraudulent activities, for instance, social media applications may want to restrict their users to only resident communities to avoid their users having a bad experience when they are bombarded with advertisements.
Manual Vs. Digital Verification of Proof of Residence Documents
Providing proof of residence documents is a cumbersome process when performed manually because of poor account opening processes. Relying on manual address verification for residency documents paves the way for human errors and creates needless friction.
Customers are responsible for locating, scanning, and sending pages of documents in the specified format. The process must be a seamless onboarding process rather than take days to complete due to manual address verifications. Due to the diversity of document formats and providers, they could generate failure spots for forgery or theft. In an age of instant gratification, depending on manual verification of physical papers is inefficient and requires consideration of more efficient processes.
Why is a Proof of Residence Document Required for Address Verification?
Proof of residence document establishes that a customer or user holds an actual physical address that corresponds to their declared address. It is essential to have a real address so that supporting documentation can be presented that the individual is still living there today. Address verification aids multiple businesses in combating chargeback fraud which is the most prevailing fraud when the address of an individual is not verified.
Certain financial services are provided only to inhabitants of that jurisdiction. For instance, cryptocurrency exchanges in Europe may choose not to accept US consumers in order to avoid being sanctioned by the Securities and Exchange Commission for dealing in unregistered securities.
These types of restrictions may be imposed as a consequence of legal or regulatory obligations, or they may be imposed as a result of company policy. Verifying geographical information via proof of residence document enables these firms to provide services online while adhering to all applicable regulations and internal policy/procedural requirements.
There are numerous ways to demonstrate your location, including a letter of proof of residency. However, the most typical method of establishing a location is to provide documentation indicating the address, issued within a time frame of 3 months, and the account holder’s identity documents such as his ID card, passport, or driving license along with a picture.
What Documents Count as Proof of Address?
Each institution has its own set of permissible documents for document verification; however, some popular examples include a utility or a tax bill, bank statements, credit card documents, tenancy agreements, or employment letters.
The Process of Address Verification
Luckily, new technologies have to speed up the process of proof of address when onboarding customers. The automated address verification delivers enhanced compliance while preventing fraudulent activities from taking place. Just like all other identity verification processes such as biometric facial recognition, and age verification, address verification implements multiple technological advancements in the smartest way. It helps create smooth workflows by making it the most captivating address verification service.
When identifying an individual and authenticating them, it is necessary to perform address verification. Customers must submit their address details that correlate with the already stored records with utility companies, government agencies, credit card facilities, and multiple other legal sources.
All businesses that require proof of address must carefully analyze what is best for their consumers and business. It is essential to adopt facilities and technologies to determine which technologies are appropriate and how to combine them into a holistic solution. Therefore, address verification provides various advantages to the financial industry. Hence, businesses must adopt such software that complies with ongoing regulations.