Data Enrichment & Validation

Address Verification for Compliance: Finances, Utilities, and More

December 29, 2020
Author
Inkit Team

If you are engaged in the industry that collects personal information, you will need to verify and protect it. It’s the only way to ensure the necessary level of security and avoid tremendous penalties. According to IBM, the US is the most expensive country in terms of data breaches with an $8.64 million cost per breach. The worldwide average is around $3.86 million.

To impose data security fines and control law-abidingness, generations of governments have worked on universal and industry-specific regulations. Now, these laws limit the processing of customer information and oblige organizations to run data verification checks.

Address information is one of the types of data that requires regular validation. Addresses are used to complete KYC verification checks for AML compliance, ensure the accuracy of utility bills, and contribute to compliance with other core laws.

That’s what we’re going to talk about today. Learn more about the partnership with an address verification service business for compliance in the blog post about:

  • Address verification for compliance by industry: financial services, mortgage lenders, utilities, and others
  • Three key benefits of address checks for compliance
  • How to verify proof of address with Inkit

Address Verification for Compliance by Industry: Financial Services, Mortgage Lenders, Utilities, and Others

Inkit, as an address verification service provider, cooperates with organizations from different industries. Today, anyone from an online retailer to a large enterprise needs to check customers’ data.

customer data

Still, there are some fields in which data validation is a must to stay regulatory compliant. Without internal checks or the help of an address verification service business, these companies will breach the law.

Financial Services

These are the main customers of an address verification service business. Financial institutions have to comply with a range of anti-money laundering acts, including the Bank Secrecy Act (1970), Money Laundering Control Act (1986), Money Laundering Suppression Act (1994), Money Laundering and Financial Crimes Strategy Act (1998), Suppression of the Financing of Terrorism Convention Implementation Act (2002), and others. All these regulations are centered around the same idea – financial institutions must adopt risk-based procedures to detect, prevent, and report any money-laundering activities and fraudulent transactions.

Such fraud prevention requires reliable identity verification. When you know how to verify proof of address, it’s easier to validate customers and notice any suspicious behavior. That’s how KYC verification checks and the cooperation with an address verification service business helps financial organizations meet the AML requirements.

Note. KYC verification check (Know Your Customer check) is a mandatory process in banking during which the identity of a customer is verified. KYC verification checks happen periodically and when an individual opens an account. They allow financial institutions to ensure the risk of fraudulent activities with credit or debit cards is low.

Besides, financial organizations regularly deliver bank statements, which is another reason to adopt address verification and run KYC verification checks. Smooth communication is essential for building transparent customer relationships.

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Mortgage Lenders

Just like financial organizations, mortgage providers are also subject to anti-money laundering laws. To stay compliant, they need to perform occupancy verification and file suspicious activity reports for specific types of loans. For example, USDA, FHA, and VA borrowers must provide proof of address to show they use newly purchased properties as their primary site of residence.

To work with these categories of customers while staying compliant, mortgage lenders need the address verification process. Therefore, many of them partner with an address verification service business to verify the occupancy through address and KYC verification checks.

Utility Companies

Utility services live by deadlines. Since the average billing period ranges from 20 to 30 days, they have very little time to deliver utility bills by mail. The failure to reach the destination within the stated time results in late payment fees and disputes.

To remain compliant and provide better customer service, utility companies need address verification as a part of the KYC process. The accuracy of contact information will enable them to always send communications to the necessary recipients at the right time. With advanced software like Inkit, it’s even possible to fully automate utility bill printing, mailing, and record keeping.

E-commerce

Although e-commerce isn’t as strictly regulated as banking, online businesses often utilize AVS checks. An address verification service (AVS) is a tool that compares the billing address provided by a buyer with a street address on file of the issuing bank. If the addresses match, the buyer can proceed with the checkout, and the transaction is considered safe. AVS checks are essential for regulatory compliance as they help to prevent fraud and chargebacks. Without them, online transactions are much riskier.

online shopping

This procedure is currently applied to the addresses of cardholders coming from the US, Canada, and the United Kingdom. The supported credit card brands include Visa, MasterCard, Discover, and American Express.

Apart from the listed industries, many other fields also need to know how to verify proof of address to stay compliant. For example, healthcare organizations often cooperate with address verification service businesses to enhance printed mail accuracy and protect confidential communications.

Overall, any company that deals with customers’ personal information would benefit from the address verification process. Find out more about the specific advantages of the address verification service business for compliance below.

3 Key Benefits of Address Checks for Compliance

#1. Address data is a reliable source of information

For KYC verification checks, organizations ask customers to provide a document with a physical address on it. Since the proof of residency is usually a driver’s license, bank statement, or utility bills, it’s not easy to cheat with addresses. Passport forgery is a crime few people would dare to commit. This makes address information a reliable way to verify customers’ identities and protect your company from fraudulent transactions.

#2. Address verification checks can be automated

Automation is the latest trend in KYC verification checks and other daily business processes. Thus, if you think about how to verify proof of address, consider automated solutions. Automated data processing will allow you to limit access to the customers’ data and better protect it. As a result, regulatory compliance also becomes easier.

#3. Address verification helps to meet multiple regulatory requirements at once

KYC verification checks and careful data processing are the cornerstones of most regulations. Therefore, if you have quality address verification and KYC procedures in place, you don’t need to worry about regulatory compliance. It enables you both to meet the requirements of the law and increase the security of your company.

How to Verify Proof of Address with Inkit

Inkit is a Reach Enablement Platform that automatically verifies address data, renders custom documents, and delivers them to the necessary destination.

retail

Once integrated with your system, Inkit will match street addresses and ZIP codes with the official USPS database to detect discrepancies. It also supports address autocomplete, preventing users from entering invalid addresses on websites or apps, and making your data records more accurate. Thanks to this, address data goes through several stages of verification.

The best thing about Inkit is that it covers different aspects of regulatory compliance. In addition to KYC verification checks, the platform automatically generates and delivers critical communications, like reports, bank statements, or bills.

Do you have any other questions about how to verify proof of address with Inkit? Contact us to discuss your needs.

Start verifying addresses today
Don't waste time and money dealing with lost shipments that never made it to your customers.
Start for free