Middesk launches Address Risk Insights for enhanced business verification

This tool is designed to enhance the assessment of risks associated with business addresses during onboarding and ongoing customer monitoring. It aims to help financial institutions and businesses identify potentially fraudulent or high-risk addresses, improving the security and compliance of customer approval processes.

Address Risk Insights addresses a significant issue in the business landscape: identity fraud. According to research by Sapio, nine out of ten enterprises and small businesses experience fraud annually. Onboarding illegitimate businesses can result in monetary losses, regulatory fines, and associations with illicit activities. The tool strengthens risk management by flagging addresses with known high-risk factors, aligning with compliance requirements under the Customer Identification Program (CIP) and Customer Due Diligence (CDD) frameworks.

The feature uses Middesk’s proprietary database of over 40,000 registered agents across the US, along with authoritative US government business data, international address records, and high-quality alternative data. It identifies fraudulent activities such as the use of registered agents, mailbox services, or other addresses not physically associated with legitimate business operations. By swiftly categorizing addresses into low, moderate, or high-risk levels, the tool aids businesses in making informed decisions during the onboarding process.

Address Risk Insights evaluates risk through several methods:

Risk-Based Verification: Validates the legitimacy of US and international business addresses.
Registered Agent Detection: Flags addresses commonly linked to fraudulent activities.
Mailbox Designations: Identifies high-risk locations such as private mailboxes or PO boxes.
Location Frequency Analysis: Detects multiple businesses using the same address, signalling potential fraud.

The tool is now available to existing Middesk customers and aims to modernize risk evaluation in line with evolving regulatory and security demands. Middesk serves over 500 organizations in fintech, banking, and insurance, providing comprehensive solutions for business identity verification and compliance.