Emily Clarke

Why Address Verification is so Important for KYC/AML Checks

Know Your Customer (KYC) and Anti-Money Laundering (AML) checks play a big part in reducing financial crimes. Not only are these checks legally required, but they also protect businesses.

Criminal activity runs rampant in many industries, but the financial sector has the highest risk. Performing these checks allows businesses to analyze and mitigate risks.

There are aspects to KYC/AML processes. However, address verification is one of the most important.

What is Address Verification?

An address verification service can use multiple forms of client-provided documentation. Most systems use artificial intelligence to compare data and quickly analyze potential risks.

The goal is to spot fraudulent data and potential criminal activity before affecting a business. Many fraudsters will combine fake and authentic address information. During a manual check, the technique often goes unnoticed, allowing criminals to continue their pursuits looking like genuine customers.

Address verification goes deeper than surface level to spot fakes.

How Address Verification Works

From a client's perspective, the process is straightforward. They must take a photo holding a document that can prove their identity. The second step is to upload a document that has a residential or business.

Once the individual provides all the required documentation, the address verification service can analyze the information. It cross-references information and uses advanced technology to analyze risks. Typically, these systems can verify addresses using government-issued IDs, passports, bank statements, utility bills, and other official documentation.

Why is Address Verification Necessary?

So many financial institutes focus their attention on identities and the potential use of fraudulent personal data. However, verifying that clients live or operate their business from a specific address can provide more insight than most realize.

Providing a legitimate address is a baseline requirement for most financial services and business accounts. If a client can't even do that, it's a major red flag.

Some lines of business need address verification for protection. For example, rental companies can verify addresses to ensure that properties are accurately represented.

Ultimately, address verification is an essential element for KYC/AML checks. It can help protect your bottom line and avoid working with potential criminals.

Author Resource:-

Emily Clarke writes about identity verification and business verification service. You can find her thoughts at ID verification service blog.