The growing number of fraudulent activities has directed organizations towards strong procedures for verifying individuals. Many sectors even have implemented identity as well as address verification systems for authentic customer onboarding. Without verifying identities, the probability of criminal activities in the business would significantly increase. Hence, to ensure that your organization stays safe from all kinds of fraud and criminal activities, there is a dire need to verify address.
What is Online Address Verification?
Address verification is a procedure to authenticate the address of a customer before they make any transactions. This checks that the users who got in touch are legitimate and that the transactions are carried out securely. Checking that the provided address really exists is important to prove the client’s identity.
Why Does Any Business Need to Validate Address?
The need for robust verification is increasing day by day. Below are the reasons why any organization needs verification of address.
Fraud Prevention
This is the most important reason why any platform requires address verification. Whether it is an e-commerce sector or a financial institution, all need to verify addresses to avoid fraud. Chargeback frauds are increasing and many online businesses are falling prey to it. Due to this type of fraud, the financial losses have reached almost 30 billion dollars. It means that your platform is also at risk and you should take some precautionary measures before it gets too late. If you belong to the financial or any other e-commerce sector, address verification would surely help you to not only mitigate identity thefts but also help you in managing better reputational risks.
Lower the Number of Returned Shipments
Another big loss of many businesses is the returned shipments and when you do not have authentic address details, this issue would occur now and then. Approximately 30% of all the sales are returned. And you know that the returned shipments cost billions of dollars. This demands a solution and such an increasing number of returned sales can be reduced and controlled by an effective address verification system.
Improve Customer Experience
Every business demands to provide a better customer experience and in the case of online businesses, the demand is even higher. Thus, through verifying address of the client, you could have an up-to-date record of your clients. This would help in effective communication with your customer and lead to quick delivery services.
Better Comply With FATF Suggestions
As per the FATF suggestions, all organizations are obliged to perform identity verifications. This would not only ensure the security of your customers but also maintain the integrity of your company. Adding address verification systems would not only help the organization to verify identities but also ensure that the organization is following all the KYC and AML regulations. Moreover, the regulatory authorities have introduced 6AMLD, which has made compliance even tough. However, an address verification system helps your online business to comply with the guidelines effortlessly.
Which Sectors Need to Address Verify?
There is no doubt that each sector needs address verification services but finance and e-commerce sectors need them the most. Here is why verifying an address is important for both sectors.
Finance Sector
Financial institutions need to verify addresses so that they can ensure that the client exists in reality or not. Many criminals use fake addresses and forged identities to create an account. The accounts are then used for illegal purposes such as terrorist financing, account takeover, and money laundering.
E-Commerce Industry
As we know the e-commerce industry loses a lot of money every year because of chargeback fraud and returned shipments. When the fraudster gives fake addresses, how any service or goods is delivered to the authentic address. It becomes really impossible. Thus, address verification services provide an additional layer of security to reduce ongoing fraudulent activities.
Final Thoughts
Account takeovers, chargebacks, and other illegal activities have become so common these days. Each entity must curb such crimes, however, scammers have become smarter than before and have developed sophisticated strategies for their bitter intentions. Running old identity verification procedures is not effective anymore. The address verification could make the KYC procedure even stronger. It would help businesses to reduce criminal transactions and chargebacks.
Shufti Pro’s Artificial Intelligence-powered address verification solution is what your platform needs to verify address of the client and that is how you can avoid fraud and secure your business. Through different AI models, Shufti Pro makes the customer onboarding process efficient and convenient.
