AI Meets Addressing: Solving the Puzzle of Global Location Data

From Verbal Directions to Silent Journeys

Imagine this: You're in a new city, suitcase in hand, tired from a long flight. You open your ride-hailing app, type in the name of your hotel, and within minutes, a car pulls up. No need to explain directions, no need to know the local language. You sit back, watch the city blur past the window, and arrive exactly where you need to be.

Or maybe you're at home, waiting for a parcel. You ordered something online just yesterday, and now you’re tracking its journey in real time – from warehouse to dispatch to your doorstep. You didn’t have to call anyone, give directions, or worry about missed deliveries. All you did was enter your address.

These everyday moments – simple, seamless, and often taken for granted – are powered by something incredibly fundamental: your address. Get it right, and everything works effortlessly. Get it wrong, and the ripple effect is enormous. According to the Universal Postal Union's Think Tank Brief No. 2 (2025), improving address accuracy can increase first-attempt delivery success rates by up to 23%, while poor addressing can slash success by as much as 14%.

The Power of an Address: More Than Just a Location

At first glance, an address is just a string of text – a location, a destination, a point on a map. But in today’s digital world, it’s much more than that. It’s a gateway to services, a key to identity, and a critical piece of data that powers logistics, navigation, and personalization.

We often don’t think twice about entering our address when signing up for a service, ordering food, or booking a ride. But why is it needed almost everywhere?

Because an address connects us to the physical world – it tells systems where we are, where we want to go, and how to get there.

The shift is powered by good addresses – complete, accurate, and deliverable. Apps and services rely on them to guide drivers, deliver packages, and locate points of interest (POIs). But what makes an address “good”?

The Anatomy of a Good Address

A good address isn’t just correct – it’s complete and contextually valid for its country. It includes components like Premise, Thoroughfare, Locality, Postal Code and many more. Most importantly, it’s deliverable – meaning it can be used to reach a real-world location.

This is where address verification becomes essential.

On the surface, it seems simple – just checking if an address is valid. But behind the scenes, it’s a complex process. Consumers may not realize the challenges involved: parsing free-text entries, handling missing components, and adapting to country-specific formats. And without good addresses, the consequences can be frustrating – failed deliveries, lost packages, and poor customer experiences.

The Challenge of Address Data

One of the most common problems is that users often don’t know how to enter their address correctly. They might skip essential details, use informal naming, or follow a format that doesn’t align with their country’s standards. Even with the best technology, if the input isn’t right, the output won’t be either.

This is why verifying address data is so challenging – it’s not just about format, it’s about how people interact with addresses, and how those addresses behave in the real world.

And then there’s the evolving nature of Point of Interest (POIs) – cafes, clinics, and co-working spaces that pop up and disappear within months. Unlike traditional addresses tied to buildings or homes, POIs are more dynamic. They can change names, relocate, or shut down entirely. Yet, users often rely on POIs when entering their address, especially in regions where formal addressing is less common.

For example, someone might enter “Le Meridien Hotel near KL Sentral” instead of a full street address. While this may be understandable to a local, it poses a challenge for systems trying to verify and geocode that input accurately. And when POIs are used as delivery destinations, outdated or ambiguous entries can lead to failed deliveries or misrouted drivers.

To handle this, we need flexibility. Address formats change. Expectations shift. And our systems must evolve with them. We also need solutions that are scalable and require minimal human intervention – so we can focus on building even more innovative and impactful experiences.

Embracing AI: The Rise of the AI Parser

Traditionally, address verification relied on rule-based parsing and reference data matching. But as the world grows more dynamic, we’ve embraced Artificial Intelligence to stay ahead.

Enter the AI Parser – a powerful tool that understands context, adapts to new formats, and intelligently maps unstructured input to structured components. It’s the backbone of modern address verification, enabling us to match even the messiest entries with precision.

So, what exactly is an AI Parser?

At its core, AI Parser is a machine learning-based approach to parsing unstructured or complex address formats. Parsing is the process of breaking down an address into its components – Thoroughfare, Locality, Postal Code and more.

Why is this important? Traditional parsing methods, often rule-based, rely on predefined patterns. They work well for standard addresses but struggle with variations, informal formats, or incomplete entries. This is where AI shines.

How AI Parser Solves the Challenge

By learning from vast datasets, AI Parser can handle diverse address formats and adapt to country-specific nuances. It improves parsing accuracy and enhances verification levels on tools like the Loqate Verify Engine, which powers global address validation.

For example, consider this address:

UNIVERSITY TEKNOLOGI MALAYSIA, JALAN KUALA LUMPUR, KUALA LUMPUR, 54100, MALAYSIA

A traditional parser often relies on rules and weight-based logic. In this case, it might confuse "JALAN KUALA LUMPUR" (a Thoroughfare) with "KUALA LUMPUR" (the Locality). The result? The Thoroughfare could be misclassified or split incorrectly, leading to inaccurate parsed address components.

AI Parser, however, learns from patterns across millions of addresses. It understands that "JALAN KUALA LUMPUR" is a Thoroughfare and "KUALA LUMPUR" is the Locality, even when both share similar tokens. This context-aware approach ensures accurate parsing which is critical for address matching, delivery success and customer experience.

In short, AI Parser is not just a technical upgrade – it is a smarter, scalable solution for a world where addresses are anything but simple.

Conclusion

Addresses may seem simple, but they are the foundation of countless digital experiences – from ride-hailing to e-commerce to logistics. As the world becomes more dynamic and address formats more complex, traditional rule-based systems can no longer keep up.

AI-powered solutions like the AI Parser are transforming this space by bringing adaptability, accuracy, and scalability to address verification. By intelligently parsing unstructured inputs and learning from patters, AI ensures that businesses can deliver with confidence and customer can enjoy seamless experiences.

Good addresses power great journeys – and with AI, we’re making sure those journeys stay effortless, no matter where in the world they begin. Want to see how AI is shaping the future of commerce? Read The Rise of Agentic Commerce: How AI will transform Buyer Behaviours.

References

UPU Think Tank Brief. Growth in trade logistics and e-commerce through enhanced data management