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A Go-To Guide to Proof of Address Verification in 2024
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Customer identity verification is significant in today’s digital world – from buying products online to transferring funds in nanoseconds, proof of address validation plays a crucial role in this. As global industries and consumer expectations evolve, companies need robust, swift, and fully-automated identity verification solutions – and one key aspect of customer onboarding is proof of address verification.
While verifying customers’ identities, address validation is one of the highest priorities during the IDV process and shouldn’t be neglected. Generally, the digital PoA verification process generally involves gathering valid and recent documents containing the individuals’ addresses. The information and the image on the documents match the data the customer provided during form submission. In addition to this, third-party or government address databases may offer businesses more assurance that the address exists.
All regulated industries require proof of address as a part of KYC compliance. For instance, financial institutions ask customers to provide PoA to verify bank accounts. Additionally, federal, local, and state government agencies may ask citizens to provide additional documents as proof of address to receive benefits, register to vote, or get a driving license.
There is a long list of documents that can be used as proof of address; however, acceptable PoA documents typically vary in countries. Proof of address examples include:
In case a customer is under the legal age, they can provide proof of address with their parent’s or guardian’s name. However, it’s noteworthy that customers need to provide different documents for proof of address other than they submitted earlier for identity verification.
Gathering and verifying customers’ addresses is one of the key components of a customer identification program [CIP], along with collecting personally identifiable information. Businesses are required to know your customer and anti-money laundering regulations, which require proof of address as part of a risk-based approach to verify customers’ identities and fraud prevention.
But, even when it’s not a regulatory obligation, going the extra mile to gather and authenticate customers’ addresses can help businesses mitigate the risk of fraud and financial losses.
In some situations, businesses may mandate their customers to visit a branch or office to submit documents proving the authenticity of their provided address. Conversely, companies may also send a code to their newly onboarded customers to verify that an individual genuinely lives there. Once the client receives the code, they can use it to finish the onboarding or online access.
However, these practices are insufficient to sustain today’s digitized world. Instead, businesses need to regularly turn to online proof of address processes, including fully automated address and document verification solutions that can swiftly detect and validate customers’ addresses. With the advanced tools backed by optical character recognition technology, companies can automatically gather, scan, extract, and verify address information while determining that the provided proof of address is not forged, altered, or modified.
A proof of address verification process includes:
However, it’s noteworthy that businesses can set custom rules for proof of address checks, for instance, whether they want exact matches or partial matches; it all depends on the business requirements. In addition to this, companies can also decide what they will do if the address is a partial match or a mismatch. They can either initiate manual review or request customers to provide new address documents – requiring enhanced address verification checks or simply declining customers’ applications.
Other than utility bills or identity documents, geolocation can also be used as proof of address as it’s a more convenient, time-saving, and hassle-free alternative to acquiring customers’ physical documents. However, regulatory authorities have not yet wholly accepted geolocation-based PoA compared to traditional document-based verifications; companies can still practice this check as a complementary measure during the know your customer and customer due diligence procedure. However, in the Finanсial Action Task Force (FATF)’s Guidance on Digital Identity and Opportunities and Challenges of New Technologies for AML/CFT, the regulatory authority has mentioned geolocation-based proof of address, which emphasizes the importance of geolocation checks.
Using Geolocation verification checks businesses can identify:
However, businesses must obtain customers’ consent before asking for or accessing geolocation data to meet GDPR’s data privacy and protection laws and standards.
For frictionless, swift, and uninterrupted proof of address verification, some key considerations need to be met while submitting a PoA document. Key practices include:
While there are tens of best practices to master the art of proof of address verification suggested by global lenders and experts, it’s worth noting that acknowledging the potential challenges that arise with PoA documents. Common issues include:
Proof of address is a key component of the KYC compliance program as it fast-tracks the identity verification process by detecting bad actors, mitigating fraud, and verifying the true location of customers. Although verifying proof of address is a regulatory obligation, businesses can choose from multiple options on how they want to verify their customers’ addresses.
Sending postcards with verification codes or asking customers to visit for in-person checks can be costly and hectic and is not an option that can be practiced as it can’t meet today’s customers’ evolving demands. Whereas digital proof of address procedures are often more robust, secure, and accurate – your business still requires tailored PoA solutions that can uplift customer experience.
Shufti Pro offered a tailored approach to proof of address verification, powered by state-of-the-art document and address verification solutions. Your businesses can swiftly gather customers’ proof of address documents and customize the verification checks according to experience-tailored data extraction approaches to meet business requirements. With Shufti Pro’s KYC journey builder, you can set your own rules and data points along with the type of proof of address your business wants to accept. Our address verification solution is powered with rigid document authentication checks leveraged with our in-house OCR technology – a perfect solution for businesses seeking to verify customers’ addresses, fight fraud, and improve user experience with no effort.
There are tens of documents that businesses accept as proof of address. Some of most comment PoA are as follows:
Proof of address must include the following information:
Proof of address cannot be older than three months (except for rental agreement).
Yes, bank or financial statements count as proof of address, as they have customers’ addresses on them. However, if you are providing bank statements as PoA, you need to make sure that they are no more than 3 to 4 months old and should contain the transaction history of the last 12 months.