LibraryblogThe KYC pain points gaming companies must overcome

The KYC pain points gaming companies must overcome

Why online gaming firms need a step-change in player verification - and how automated age verification and identity checks are developing.

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Chris Hooper
Director of Content at
March 29, 2023
On this page
Taking the KYC pressure off players
Why Veriff
Why innovation is the answer to KYC in gaming
The KYC benefits of switching to IDV

Customer verification is an ongoing challenge for gaming companies who must deliver super-slick digital player interactions while also complying with strict Know Your Customer (KYC) and global AML  regulations. Across jurisdictions, gaming firms have to:

  • 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 high-risk list.
  • Protect against money laundering and other financial crimes.

It’s a delicate balancing act. If the player onboarding process is too long-winded, slow or cumbersome compliance costs rack up and players will go elsewhere. If the process isn’t secure, gaming sites endanger their player’s data and risk being used by criminals to launder money.

With the continuing rise of online gaming and gaming, it is vital for industry operators to understand, implement and enforce player KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance. As such, to verify players, block money launderers and other bad actors, provide a secure player experience, and adhere to regulatory requirements, like age verification, EDD and location/source of funds checks, companies must implement effective KYC and AML processes.

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.

Chris Hooper

Online casinos are often seen as prime targets for money laundering activities, due to regular high volume transactions which often involve large sums of cash or virtual currency. Resultantly, these businesses must have robust systems in place that can identify suspicious activity quickly. This can take place using identity verification checks on all players during the onboarding process, verifying personal details such as full name, address, and date of birth. Additional player background screening can include adverse media searches or the sanctions watch list, which must be passed for the player to access services.

The consequences of failing to abide by legal requirements can be dire. In recent news, for example, the Australian authorities imposed a whopping A$100m fine on a gaming operator and revoked its operational licence 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.

Taking the KYC pressure off players

Outdated KYC processes can add a significant amount of friction to onboarding, potentially causing players to abandon the sign up, choose not to play, or use a rival service. However, identity verification (IDV) enables operators to onboard players quickly, securely, and with a seamless UX. 

For instance, online IDV company Veriff provides enhanced Biometric Authentication. This offering confirms that a returning player is genuine by using biometric analysis to identify and mitigate fraudulent activities, such as account takeover and identity theft, eliminating user friction in the process.

Totally powered by automation, Biometric Authentication is straightforward. A player takes a selfie, which is checked for liveness and realness in real time, and then the selfie is compared to a previously verified face and identity. Veriff then sends the player back to the gaming operator’s service and provides the authentication decision in about a second.

This enables operators to replace legacy knowledge-based authentication (KBA), one-time passwords, and email authentication. Facial biometric authentication is easier for the player and more secure than legacy solutions, ultimately streamlining the player’s journey and optimizing UX. 

Fast decisions

A 98% check automation rate gets customers through in about 6 seconds.

Simple experience

Real-time end user feedback and fewer steps gets 95% of users through on the first try.

Document coverage

An unmatched 10K+, and growing, government-issued IDs are covered.

More conversions

Up to 30% more customer conversions with superior accuracy and user experience.

Better fraud detection

Veriff’s data-driven fraud detection is consistent, auditable, and reliably detects fraudulent forms of identification.

Scalability embedded

Veriff’s POA can grow with your company’s needs and keep up with times of increased user demand.

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 11,000 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.

The KYC benefits of switching to IDV

The KYC process is an important part of any gaming company’s operations because it helps them to identify possible risks associated with certain players or transactions. This includes verifying the identity of new players through document checks, for instance. 

Gaming operators have an obligation towards ensuring safety when dealing with player funds – both from external threats like terrorism financing but also internal ones like bad actors attempting illegal activities, such as using legitimate accounts under false identities. The application of stringent regulatory frameworks such as those outlined by FATF combined with strong KYC processes enable gaming firms to protect themselves against criminal behavior, while maintaining trust among its client base thus enabling smooth functioning and growth over time.

Forrester recently analysed the impact of a company partnering with Veriff, calculating factors such as return on investment and impact on fraud risk. The research revealed that:

  • The company could save $11m over three years, thanks to efficiencies linked to automation. 
  • Revenue lost to fraud was cut by 20%, saving the company $7.4m over three years. 
  • It also enjoyed player experience benefits valued at $18.4m by Forrester over three years, and a total return on investment of 195%.

It is clear that gaming companies have significant pain points to overcome as they continue to innovate. When it comes to onboarding, players expect speed, convenience, and peace of mind. Governments and regulators on the other hand will increasingly scrutinise the industry and demand legal and regulatory compliance. Gaming operators must do all of this while protecting precious margins by increasing the speed and efficiency of their KYC processes. 

Leading IDV solutions deliver all of these requirements and more, however, reducing online gaming risk and converting more players through an onboarding process that takes just seconds.

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Discover more about how IDV is helping businesses to optimize their KYC processes.