Lob's website experience is not optimized for Internet Explorer.
Please choose another browser.

Arrow Up to go to top of page
Address Verification for Financial Tech Companies: Improving Accuracy, Efficiency, and Customer Satisfaction
June 18, 2018

Address Verification for Financial Tech Companies: Improving Accuracy, Efficiency, and Customer Satisfaction

Author Avatar
Guest Author

We launched Lob in 2013 with the goal of revolutionizing the way we send and receive mail. Our original product, the print & mail API, streamlines the operation of sending physical mail, automating the tedious parts of the process while giving customers even more control, oversight, and personalization than offered by traditional methods over the content delivered.

We learned a lot in the first years after launching, and as our customer base grew, so too did the number of pieces of mail returned to our office as undeliverable (which is not surprising considering an audit report conducted by the USPS in 2014 estimated that 6.8 billion pieces of mail per year are undeliverable as addressed).

It occurred to us that smarter mail required sophisticated dispatch. In an effort to better understand how we could reduce our company’s returned mail, we began gathering our own data on undeliverables. Our findings revealed a problem much larger in scope than we had initially anticipated: 7% of addresses entered in our print & mail API were undeliverable as addressed, and 12% of addresses entered were missing an apartment or suite number.

Our customer experience and internal costs depend on our ability to verify addresses before shipping out mail, so we decided to build our own address verification API in order to drastically reduce the number of mail items returned to us. After speaking with a number of customers looking to incorporate address verification into their own businesses, we decided to release our API to the public as a separate product in 2017.

Address verification has since become essential to countless companies, particularly in financial technology, from businesses issuing physical cards to corporations verifying consumer identities under Know Your Customer (KYC) regulations.

The cost of KYC compliance is not insignificant. Financial technology companies like Current, which offers a debit card and accompanying app designed specifically for teens, verify each new customer individually. Current CTO Trevor Marshall uses Lob’s address verification API to help his company simplify the process of ensuring compliance: “We use Lob in front of our KYC service to catch any mistakes made by our customers when inputting their address,” he explained. “This increases our KYC first-time acceptance rates, making for a better customer experience. KYC is expensive, so Lob also saves us money.”

For companies issuing credit cards, every envelope returned not only means paying the price of re-shipping cards but paying the price of customer support and a bad customer experience. The overall cost of re-issuing cards, in time and money, grows to be significant at scale.

During the six months prior to incorporating Lob’s address verification API, a card issuer spent over two hours a day during high-volume enrollment periods manually correcting faulty addresses from returned cards and processing re-shipment. Customer satisfaction took a hit as well, since a misentered address led to a disproportionate delay for customers waiting on cards, who were notified long after enrollment that their card had been sent back to the company.

Incorporating address verification not only helps eliminate the margin of error during the initial address input, but improves the customer experience as a whole. And in financial tech specifically, consumer trust is critical. With this much value on the line, your business shouldn’t hinge on a typo. Address verification ensures accuracy from start to finish.

Continue Reading