Top 5 KYC pain points gaming companies must overcome

Customer verification is an ongoing challenge for gaming companies – charged as they are delivering super smooth digital player interactions while also complying with strict know your customer (KYC) and global AML regulations. Across jurisdictions, gaming platforms  must:

• Verify the player's age to ensure that they are legally allowed to access the service
• Confirm if the player has placed themselves on a self-exclusion list
• Protect against money laundering and other financial crimes

It's a delicate balancing act: if the player onboarding process is too long, slow, or cumbersome, then compliance costs rack up and players will go elsewhere. 

If the process isn't secure, gaming platforms put players' data at risk and may become targets for financial crimes, such as laundering money, committing fraud, or facilitating data breaches and unauthorized transactions by criminals.

With the continuing rise of gaming, it is vital for industry operators to understand, implement, and enforce KYC processes and AML compliance – while also adhering to regulatory requirements such as age verification, Enhanced Due Diligence (EDD), and location/source of funds checks.

However, this requirement can deliver several pain points for gaming businesses.

The top 5 pain points:

• Balancing compliance with user experience: gaming providers must ensure compliance with strict KYC and AML regulations, while maintaining a smooth and efficient user experience. A complex onboarding process can discourage players, risking business loss.
  
• Risk of financial crimes and regulatory penalties: gaming sites are prime targets for money laundering and other financial crimes. Failure to implement robust KYC processes can lead to significant fines, loss of operating licenses, and severe reputational damage, as evidenced by the A$450million fine imposed on an Australian gaming operator.
  
• Complexity and cost of compliance: the regulatory landscape for gaming companies is complex and varies across jurisdictions. Compliance requires significant resources and investment in systems capable of performing thorough identity verification, age verification, and continuous monitoring for suspicious activities.
• Need for fast and accurate verification: players expect quick and accurate verification processes. Traditional methods can be slow and error-prone, causing friction in the onboarding process. Advanced solutions like biometric verification and automated ID checks can streamline the process, but they require sophisticated technology and infrastructure.
• Maintaining security while enhancing user experience: ensuring player data security while providing a seamless user experience is also challenging. Providers must adopt innovative solutions that offer high security, without adding unnecessary steps for the user. This includes real-time feedback, fewer verification steps, and leveraging advanced technologies such as biometric authentication to enhance both security and user satisfaction.

Leveraging secure KYC processes: How online casinos can thrive in a changing industry

Firms that adopt safe and secure KYC processes have a golden opportunity to differentiate their brand in the eyes of the player – and excel in a sector that is innovating and growing rapidly.

Online casinos are often seen as prime targets for money laundering activities, due to their regular and high-volume transactions, often involving large sums of cash or virtual currency. As a result, these businesses must have robust systems in place that can identify suspicious activity quickly. 

Failing to follow legal requirements can have serious consequences. In recent news, for example, the Australian authorities imposed a whopping A$100m fine on a gaming operator and revoked its operational license for ‘failing to stop money laundering at its Sydney casino'. 

Companies that fall foul of this criminal activity face significant reputational damage, loss of business, and serious sanctions – including hefty fines – from gaming regulators. Firms that adopt safe and secure KYC processes, however, have a golden opportunity to differentiate their brand in the eyes of the player and excel in a sector that is innovating and growing rapidly.

Why innovation is the answer to KYC in gaming

Gaming industry standards are costly and complex and vary across the world, but player KYC and Anti-Money Laundering (AML) regulations remain high hurdles for operators to clear. Common practices include age and location verification and suspicious activity reports (SARs), but operators must ensure that they strike a balance between compliance and a frictionless user experience.  

It is crucial for operators to ensure that their players meet age requirements; allowing underage customers to get onboarded could result in substantial legal, financial, and reputational harm. To tackle this, Veriff’s age verification sends operators accurately extracted data to help them decide if the user is eligible to access services. This ensures that only authorized users or customers are accessing age-gated content and products, preventing liabilities and fraud. Additionally, Veriff confirms the liveness and realness of a range of IDs, with over 12,000 accepted documents, allowing for global companies to continue doing business with customers around the world. All of these processes allow for seamless customer experiences, and keep businesses safe. 

Veriff’s IDV solution goes one step further than its competitors, seeking permission to record players using their device’s camera during the verification process. This makes it even harder for criminals to provide fraudulent document data or fake live verification.