The world is undergoing technological advancements which are changing the customers’ way of shopping. E-commerce and other online purchase sites are bringing innovations that are giving rise to various challenges. For instance, abandoned carts, chargeback fraud, and failed deliveries. This mainly happens when fraudsters use fake addresses to hide their identities and buy restricted products. Due to these activities, industries face poor customer service which leads to losses of over $1.6 trillion.
Therefore, industries need to employ automated solutions to validate addresses of customers. The AI-powered address verification solutions not only reduce the chances of inaccurate entries but also verify customers in real-time. Moreover, these help industries save manpower, time, and operational costs. The blog provides an overview of how the process works and benefits digital industries.
Address Verification System – Steps Involved in the Process
AI-powered address verification provides authenticity with a user-friendly interface. The process is easy which keeps the customers intact. This is because customers are more likely to drive away from processes that ask repeatedly for information or are complex in nature. The address validation process involves the following steps:
Filling in the Information
In the first step, the system asks customers to fill in their identity information in the form. This involves proof of address like street, postal code, and jurisdiction.
Submission of Identity Documents
In this step, the system asks for supporting documents as evidence for the address claim. The customers can either upload the documents directly or hold them in their hands. After submission, the system uses OCR technology to extract information from the documents and AI mapping facial features. These are later cross-verified with the photos on the documents.
Submission of Secondary Documents
These include utility bills, rental or ownership agreements, and insurance details. These documents act as a second proof of address which later aids in authentic address validation.
Verification and Presenting Results
The system extracts required address information and cross-verify it within the databases. It also validates the address by using geolocation. After successful verification, the results are presented in front of customers as well as stored in the database. If the verification shows fraudulent information, the business restricts access to customers and reports it to regulatory authorities.
Address Verification System – Benefits for Online and Physical Businesses
According to Shufti Pro News, fraudulent threats are dramatically skyrocketing, exposing businesses to various consequences like identity theft, chargebacks, operational costs, and reputational damages. Moreover, all these lead to non-compliance and ultimately hefty fines. Therefore, the need for accurate and efficient verification of address is also increasing. Industries like e-commerce, retail, and other online or physical stores are the most in need of robust verification solutions. This is because of the following reasons:
Reduce the Chances of Failed Deliveries
Businesses are facing numerous financial losses due to failed deliveries and returned shipments. This is primarily due to fraudulent delivery information and lack of adequate mechanisms to verify address. Furthermore, these lacks will lead to repeated losses in the near future. According to the stats by Wall Street Journal, e-commerce returns experienced an increase of 70% in 2020. This is why it has become necessary for businesses to employ better verification solutions to make sure they are delivering the products to the right buyers.
Fraud prevention is among the prime reasons why businesses need to employ address verification systems. From financial institutions to e-commerce platforms, customer verification along with their addresses is vital. For this, they need accurate customers and address validation solutions. This way they not only verify identities but also cross-verify the whereabouts of buyers.
Businesses are going digital which is increasing the need for better and improved fraud prevention solutions. If an imposter is a false address for delivery, the online verification will help businesses identify them in real-time and prevent chances of reputational damages.
Ensure Compliance with KYC Regulations
According to the regulations put forth by the regulatory authorities, businesses have to perform identity verification to make sure the customers are present in the real world. This is crucial for businesses to ensure the security of customers as well as safeguard the company’s reputation.
Therefore, Shufti Pro Funding indicates that businesses should incorporate online address verification. This way they ensure they are dealing with legitimate customers and shipping orders to the right addresses. Ultimately they can reduce the chances of chargebacks and failed deliveries. Furthermore, businesses can ensure guaranteed compliance with KYC regulations.
Improve Customer Experience
Along with fraud prevention and KYC compliance, providing a positive customer experience is also their responsibility. Customers facing failed deliveries and wrong-address shipments are likely to trust the business. Therefore, businesses need accurate and less-time consuming solutions to validate addresses. This will also help them maintain an updated record and ensure a better client experience.
Industries like e-commerce, retail, and others are facing numerous threats because fraudsters use credentials to hide their identities. So much so, that they are using fake addresses to skip the identity verification checks. This helps them purchase the restricted products as well. However, with accurate and robust address verification in place, businesses are less likely to fall into traps.