Know Your Customer and Address Verification: Paths to Progress

Insight of Address Verification

‘Address verification, commonly known as a type of document verification, helps in proving the identity of the customer.’

Experts term online address verification service as ‘the risk management tool’ which assists businesses by verifying not only IDs but also utility bills, passports, insurance documents, etc. Companies verify addresses to ensure authenticity and comply with national and international standards. To validate addresses that are genuine is not as elementary as it may appear because of the fraudulent changes that can readily be made in the documents. Hence, to verify an address has been a problem for years but to provide a solution to this menace, verification tools are effortlessly available. 

Know Your Customer (KYC): Association with Identity Verification 

Authentic information leads to the legit identification of a customer ultimately, enhancing better communication. As per a report presented by KPIX San Francisco, more than 17,077 out of 37 million change of address requests were fake, received every year by the United States Post Office (USPS). In order to minimize this threat, compliances have been introduced by the regulatory authorities for banks and other institutions. KYC, a part of Customer Due Diligence (CDD) regime, is one of them. Verification of address in accordance with KYC is used by many businesses, firstly to comply with the strict regulations and secondly to identify the customers as well as risk associated with them. In order to carry this out, industries use address verification systems for facile identification. 

Digital Address Verification

To prevent risk and threats of address frauds, addresses are digitally verified by using artificial intelligence technology from the documents that are provided by the customers. If a mismatch of the information is detected the verification is rejected. To avoid these scenarios, businesses ensure complete due diligence of their clients, whether it’s online market, e-commerce, banks or other financial industries, healthcare or real-estate sector. 

Quoting an example of the Airbnb, a rental company, witnessed an influx of fake owners. Airbnb did not authenticate whether the owners lived at the place they had mentioned or not, leading to fake property ownerships and customer dissatisfaction. 

According to the identity theft reports received by FTC in 2020, 406,375 were from the people whose information was manipulated for government benefits or documents including the insurance. 

Documents Used for Verification

Backdated and incomplete customer addresses can cost industries fortunes. By verifying addresses, customers can be identified. This verification process is conducted by matching documents with the existing ones. 

  • Employment letter attesting to the current residency 
  • Credit Card Bills
  • Ownership of the property documents 
  • Utility Bills
  • Financial Statements

All of these documents should be older than three months. Different companies have different requirements for the documents depending on their standards. Any document can not be verified for both verifying an address as well as identification, if one is used for address verification, the other will be asked to verify identity. Alternative documents includes;

  • ID Card
  • Driver’s License
  • Passport

Also Read How you can get attest your documents and why it is required?

Industrial Use Case of Address Verification Systems


Property related verifications are the most tricky one because of the readily available softwares for forgery of documents and faking of the identity. Customers present fake documents with minor changes in the real ones to avail benefits including unemployment benefits, loans for construction and more. Government documents fraud was the type which faced an increase in 2020 of 1,663 % from 2019. Address verification systems here can help out the businesses the most by providing real time verification of addresses within mere seconds.

Financial Sector

Banks and other financial firms face the most identity scam ranging from credit card frauds to opening of new accounts by showing fake address documents. They ask customers to submit their documents which are then matched with the information contained in the databases, provided by the authorities. 

E-commerce Marketplace

The online retailers are at risk of chargeback frauds which are caused due to inaccurate addresses or fraudulent orders. The companies caused millions when dealing with international customers. If the address is verified beforehand, the cost can be saved and hence customer satisfaction ensured. 

Altogether Now

Validating addresses refers to the assurance of your customer residential status whether they live at the same place as they claimed or not. The accuracy of address is also verified through online address verification tools which provide in-depth authentication. Regulatory authorities have set-up some legit standards, businesses have to comply with, inclusive of the identification of customers as well as their address verification. This ultimately helps the businesses to ensure onboarding and customer satisfaction which indeed is a prerequisite for the businesses to prosper. Companies verify addresses of their customers by asking for documents which are latest, including ID cards, utility and credit card bills so much so their employment letters and financial statements. 

manu bhadouria

I'm Manmohan Bhadouria, a digital marketer with a strong SEO background. I love writing blogs and stories, and exploring new places and adventures is my passion. I have a soft spot for all kinds of animals.

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