Proof of Address is a document that verifies a person’s residence address. It is an essential requirement in the Know Your Customer (KYC) process for banks, financial institutions, and other regulated entities in India. It is critical in identifying and verifying customers’ identities and preventing fraudulent activities such as money laundering and terrorist financing.

India is home to over 1.3 billion people, making it the world’s second-most populous country. With such a large population, it becomes a challenge for banks and financial institutions to identify and verify their customers’ identities. Therefore, the Reserve Bank of India has made it mandatory for banks and financial institutions to obtain this from their customers before opening accounts or providing financial services.

Why is proof of address important? 

Banks and financial institutions can ensure that their customers are who they claim to be and that their addresses are genuine.

Moreover, address proof is necessary for complying with the regulatory requirements set by the Reserve Bank of India. The RBI mandates that all banks and financial institutions must follow the KYC norms and maintain records of their customers’ identities and transactions. The KYC norms require banks and financial institutions to verify their customers’ identities and addresses to prevent fraudulent activities.

Apart from the regulatory requirements, it is also essential for ensuring the accuracy of customer data. It helps banks and financial institutions to update their customer records and maintain accurate information. This, in turn, enables them to offer better services to their customers and enhance their overall experience.

In India, it can be established through various NIDs and supporting documents. All individuals should submit at least one acceptable proof of address document. These documents must be valid and up to date to be considered as proof of address. In addition, the address on the document should match the address provided by the customer. Every business has its own requirements/guidelines when it comes to documentation checks, but the most common documents verification solutions are listed below:

• Electricity bills verification
• Bank account verification
• Aadhaar verification
• Residence permits or certificates verification
• Tax documents verification
• Insurance statements verification
• Official salary documents verification
• Driver License verification
• Passport verification

For example, the utility bill must be issued in one’s name to match the government-issued identification. Also, the submitted document needs to have a date (usually, it’s three months) for validity reasons.

Problems Solved in KYC Process

It serves as evidence of the customer’s residence and helps businesses to verify their identity and assess their potential risks. Address proof is a mandatory requirement for the KYC process, and failure to comply with KYC norms can result in legal action, including fines and penalties.

• Compliance: Compliance is a significant problem faced by businesses in the financial sector. Businesses are required to comply with various legal and regulatory requirements, including KYC norms. It helps businesses to comply with KYC norms by verifying the address of their customers.
• Risk Management: KYC helps businesses to assess the potential risks associated with their customers, including money laundering and terrorist financing. It helps businesses to establish the physical address of their customers and assess the potential risks associated with them.
• Fraud Prevention: Fraud prevention is a critical problem faced by businesses in the financial sector. It helps businesses to prevent fraudulent activities by verifying the address of their customers. This helps to prevent identity theft, money laundering, and other fraudulent activities.

AuthBridge’s AI-powered verification solution helps detect document tampering or any discrepancy to reduce fraud and makes address verification easy. Our digital address verification leverages the power of image recognition, GEO-tagging coordinates and liveness detection technologies to verify the identity and physical address of employees, customers, vendors and business partners and ensures seamless verification.

Some important features are listed below:

• Detailed address capturing with GEO coordinates
• Minimal paperwork and enhanced onboarding experience
• Data security compliant and integrable with leading HRMS tool.