Fraud is fluid and sophisticated, but electronic identity verification (eIDV) can make a real difference, even as fraudsters refine their tactics. While many financial organizations leverage eIDV technologies, they often overlook the quality of their data as a key element in building a great eIDV solution. Excellence in data quality transforms eIDV from a basic verification tool into a powerful fraud prevention mechanism, supporting more comprehensive know your customer (KYC) and know your business (KYB) initiatives.
Address Verification Is a Cornerstone of eIDV
Address verification, in particular, plays a pivotal role in ensuring that verified information corresponds to a specific individual. As a core component of data quality, address verification requires specialized tools, which are not always offered by eIDV providers. However, advanced data quality solutions are available and can seamlessly integrate with existing eIDV systems. These tools enhance fraud prevention efforts without causing operational disruptions.
Address verification is more than just confirming the correctness of data or even verifying that a physical address exists. Name-to-address matching ensures that provided details — name, phone number, etc. — are linked to a specific address and individual. Properly handling these operations requires cross-referencing of multiple databases and sophisticated matching algorithms. The resulting precision enhances KYC and KYB compliance by ensuring data is accurate, complete and actionable.
This level of verification is invaluable for fraud prevention. By linking names to verified addresses, financial institutions can detect fabricated identities that rely on mismatched data, such as in synthetic identity fraud (SIF). Address verification also reduces friction during onboarding, fostering trust and improving the customer experience. However, achieving this level of precision is challenging due to the complexity of address verification processes.
The Complexity of Address Verification
Despite its benefits, achieving reliable address verification is no small feat. Over 200 postal address formats exist globally, requiring verification systems to process data from more than 240 postal authorities. Verification systems must reconcile these differences while meeting stringent accuracy standards with sophisticated operations such as parsing, standardization and matching algorithms.
Matching an individual to an address introduces additional challenges. For example, there might be multiple spellings or nicknames involved. Data tools must correctly determine that Bill, Billy or even Liam Brown at 50 Sunnydale Lane are in fact the same person. Variations can include different spellings of first and last names or different strings like Mr. John Smith or Dr. John Smith. These factors, along with vulgar or fake names, transliterations and cultural differences, must be accounted for seamlessly. Advanced eIDV solutions overcome these hurdles by incorporating data quality tools that verify phone numbers, emails and names in tandem with address data.
Key Technologies for Enhanced eIDV
When combined with data quality measures, eIDV can build on address verification by integrating various technologies for a layered approach to fraud prevention, such as:
• Geolocation tools. These verify that an applicant’s stated location aligns with their actual physical location. Verified addresses enable precise geolocation, allowing institutions to spot discrepancies and bolster security.
• Document verification. Identity documents like passports and driver’s licenses are analyzed for authenticity. Extracted address data can then be cross-referenced with verification databases, adding another layer of validation.
• Sanctions screening. Compliance efforts often involve screening applicant data against global sanctions lists. Accurate address verification ensures that flagged individuals or entities are correctly identified and blocked.
• Liveness checks and facial matching. While some eIDV providers include these features to verify that users are live individuals, they often lack the ability to extract and match meaningful address and name data — a critical process for document verification and sanctions compliance.
Stemming Fraud With Precision Tools
As fraudsters adapt, financial institutions must remain a step ahead by leveraging innovative tools. Modern eIDV solutions do more than confirm data accuracy. They validate that the data belongs to the individual in question. When paired with scalable data quality measures, address verification becomes the glue that binds all elements of fraud prevention together.
Matching verified addresses to individual names enables institutions to identify fabricated identities, mitigate risk and streamline customer onboarding. This precision not only enhances security but also improves the overall customer experience, building trust and satisfaction. Together, eIDV and advanced data quality tools provide financial institutions with a reliable, effective means to combat fraud, ensure compliance and optimize operations.
Previous