iGaming’s success story: KYC’s vital contribution
In iGaming, one constant remains: the battle against fraud. The industry is in the midst of a staggering growth trajectory, projected to soar to €140.05 billion between 2021 and 2026, boasting a remarkable compound annual growth rate (CAGR) of approximately 11% over this span. Yet, the more substantial its success, the more susceptible it becomes to fraudulent activities that threaten its very core.
Efficient user onboarding in iGaming should be accompanied by robust compliance and security protocols to ensure a secure and trustworthy environment. KYC and AML requirements play a pivotal role in thwarting illicit activities in the iGaming sector. By ensuring stringent identity verification and location validation, these platforms can deter fraudulent practices such as multi-accounting, credit card fraud, and chargeback fraud. Neglecting these essential measures may expose operators to severe penalties and jeopardise their licenses.
In 2021, the cumulative value of fines associated with these lapses surpassed an astonishing £40 million, a trend that continues to escalate, with the current year’s total fines already exceeding £44 million. Notably, the UK Gambling Commission (UKGC) wielded its regulatory authority by imposing a colossal £17 million settlement on a prominent British gambling platform.
The Vital Role of KYC verification
To address this multifaceted challenge, the iGaming sector has been compelled to adopt a crucial tool in its arsenal: Know Your Customer (KYC) verification. KYC is more than just an industry buzzword; it is the frontline defence against fraudsters, ensuring that legitimate players are welcome, while malevolent actors are kept at bay.
Balancing security and user experience
Know Your Customer (KYC) practices are the bedrock of player security and regulatory compliance. They primarily involve identity verification and due diligence, encompassing document, age, address, and payment verification, and often incorporate biometric data. These measures collectively aim to maintain a safe and responsible gaming environment.
However, challenges persist in the iGaming KYC landscape. Striking a balance between robust verification and a seamless user experience is paramount. Cumbersome KYC procedures can deter potential players. Furthermore, the industry operates across multiple jurisdictions, each with its own regulatory framework. Achieving consistency in KYC requirements poses a challenge.
Emerging fraud techniques and data privacy concerns further complicate the landscape. The international nature of iGaming calls for collaborative efforts to combat fraud and ensure compliance with varying regulations worldwide.
The non-negotiables of KYC
Regulatory compliance stands as a fundamental pillar, safeguarding both the industry’s integrity and the players’ trust. These elements collectively form the foundation of a secure and user-friendly KYC solution for the iGaming industry. As we have emphasised, several key elements are paramount in upholding this compliance, each serving a unique role in the ecosystem:
- Seamless Online ID Scan: automating identity document verification and biometric liveness checks ensures that only legitimate players gain access, preventing identity fraud and impersonation.
- AML Screening: the automation of sanctions, PEP, and adverse media checks guarantees compliance with anti-money laundering regulations across different regions, ensuring the platform remains clean from illegal activities.
- Address Verification: compliance with residency restrictions is essential to prevent players from accessing services in regions where it is illegal, ensuring the platform operates within the boundaries of the law.
- Phone Number and Email Verification: verifying contact details enhances security and communication, helping to maintain a safe and secure gaming environment while ensuring the right person is connected to the contact details on file.
- Information Gathering: efficiently collecting additional user data helps gain a comprehensive understanding of players, enabling personalised services and aiding in identifying potential issues like problem gambling.
- Customisation: tailoring the KYC process to the providers branding and user experience requirements is vital to strike a balance between robust verification and a seamless player journey, keeping users engaged without unnecessary hurdles.
Meet KYC TrustPath at SiGMA Europe 2023
With KYC TrustPath, you can be assured that these essential components, combined with advanced features, work seamlessly to safeguard your platform and enhance the user experience.
ZignSec specialises in identity verification and Know Your Customer (KYC) solutions. They offer services and tools to help businesses verify the identity of their customers, which is crucial for regulatory compliance and preventing fraudulent activities.
