When interacting with agencies, banks, and authorities, users sometimes have to produce ‘proof of address’ to ensure effective communication and regulatory compliance. But what exactly counts as ‘proof of address’? To put it simply, proof of address usually is a document verifying a person’s residential location. It is most often requested during customer onboarding but in some instances, it is also used as an enhanced due diligence measure (”Re-KYC”) if the customer is meeting a specific threshold.
Key Criteria for Valid Address Proof:
- It must be clearly connected with the customer's name.
- It reflects the customer's current residential address.
- It is issued by a reputable and recognised institution.
What qualifies as valid Proof of Address?
Various documents can serve as proof of address, including utility bills, bank statements, mortgage contracts, and more. Which document types are valid depends on the regulatory requirements and your risk policies.
Why is Proof of Address Important for Verification?
Collecting an address, along with a user's first name, last name, date of birth, and government ID number, is a key step in verifying a customer's identity, a process known in the US as Customer Identification Program (CIP) but more commonly as Know Your Customer (KYC) in Europe. This is especially crucial for businesses like banks, financial institutions, and iGaming which follow strict Know Your Customer (KYC) and Anti-Money Laundering (AML) rules. These businesses often need proof of address to ensure they're taking the right steps to identify new customers and prevent fraud.
Having a verified address is not just about following rules; it helps businesses communicate with customers, understand their financial behaviour better, and protect against fraudsters. It's also critical for companies that are only allowed to work in specific places, making proof of address a necessity for operating legally and effectively.
Problems with Proof of Address Documents
No Proof of Address Template
The variety of documents that can serve as proof of address can be challenging to automate. Determining authenticity and accuracy becomes a hard problem to solve with thousands of potentially acceptable documents from various organisations.
Poor Onboarding experience
The majority of application drop-offs occur when customers are asked to produce identity documentation. The lack of standards creates confusion, and the need to handle paper-based documents in a digital environment can be frustrating and inefficient.
Costs of document handling
Manual checks are costly and time-consuming, especially when handling large volumes of applications. Re-KYC and other handling costs add to the inefficiency.
Elevating Address Verification with Technology
Recent steps in Optical Character Recognition (OCR) and AI technology have helped streamline address verification, offering secure, real-time validation, and keeping manual checks to a minimum. Put simply, state-of-the-art proof of address software achieves this by converting an image into a machine-readable text format. Combined with facial recognition, and data verification, these solutions provide swift and secure identity verification.
Cross-match with Data Verification
Certain organisations employ data verification methods to identify malicious entities and potentially fraudulent activities. These services verify the existence of an address without offering address proof. ZignSec's data verification delivers metadata concerning the address, assisting in the straightforward validation of its authenticity and classification.
For a fully automated solution, consider ZignSec’s Proof of Address Software, covering 180+ languages. Offering a seamless, secure, and efficient verification process, it is an ideal choice for modern businesses requiring accurate and quick address validation.