Gambling

THE FUTURE OF KYC IS NOW

15/11/2021

Stringent legislation concerning player identification places a great responsibility on gambling providers. We would like to give you an insight into this topic showing everything that this responsibility involves and how operators solve this problem.
iGaming is one of the most profitable industries in the entertainment world. It has long ceased to be a privilege for those with big bucks and is now available to anyone with a gadget and internet access. You don’t have to travel to God-knows-where to be able to play some casino game. 

The COVID-19 pandemic that still rules the ball has caused people to use the internet more frequently than ever before. These days about 4.66 billion of the world's population actively surfs the net. At the same time, about 80% of people on the earth are smartphone users. Given these facts, it's hardly surprising that online casinos have become one of the most popular pasttime activities. 
The boost in the industry has led to a 12.3% growth compared to last year's figures. This made operators think of additional measures to ensure that they comply with regulatory requirements and are still able to provide maximum privacy to their users. This is why the protocols, known as KYC (Know Your Customer) and designed to protect the transparency of the data, were imposed on all online casinos. 

iGambling and Compliance
Online gambling businesses have always been taking care of creating both an attractive and safe space for their customers. By way of providing an enjoyable gambling experience, operators earn thousands of loyal patrons who, in turn, earn them huge profits. The global legislative authorities have put in place strict regulations regarding the safety of both consumers and betting providers. The laws such as KYC are needful measures that help fight illicit financial activities, fraud, and money laundering.
KYC makes it easier for operators to recognize and specify their users. This also enables them to handle their customer databases without breaking regulatory requirements. 
It is well-known fact that iGaming is an industry (which worth, by the way, is of over $70 billion) that represents a tasty tidbit for dishonest people. Gambling and betting have always attracted criminal elements who wanted to clean their dirty cash in casinos and other gaming establishments. In addition, wagering is an age-restricted area, and so its providers need to check everyone who wants to play but may appear to be under the required age.

iGambling and a player authentication
Under the above-mentioned KYC, anyone who wishes to use an online casino needs to register on the website or app. Registration involves the proof of identity, and that is a compulsory provision and must be strictly adhered to.  Most regulators require users to provide a certain part of their personal information such as a player’s name, address, age, and sometimes, even his or her income source. The operator, in his turn, needs to follow certain rules for storing this sensitive data. 

Compliance with KYC protocols allows casinos to detect financial crime, fraudulence, ID theft, or suspicious gambling behavior.  KYC processes help to identify “risky profiles” that belong to the users with certain KYC criteria. KYC also prohibits gambling websites to accept money from new entrants before the completion of their ID verification.

This gives us grounds to say that KYS are protocols based on common interests and mutual benefits. On one hand, the operator complies with all the provisions of KYS and provides its players with an exceptional user experience. On the other hand, compliance with laws earns the provider a solid reputation, loyal clientele, and also secures his license. A failure to comply leads to losing all the above benefits.
Let’s take a peek at the ways online gambling providers deal with KYC requirements and try to understand how effective are these and other laws and what state are they going to reach in the near and distant future?

Features and outcomes
When it comes to legislation, there has always been a pattern when the authority of one country takes the initiative, and others follow its example. The UK Gambling Commission seems to take the lead in the respective area a bit more often than the bodies of other countries.  This is exactly what happened several years ago when UKGC decided that the initial verification of every entrant ID would greatly improve the situation. 

The practical side of the matter
Thanks to our living in the digital world the electronic processing of user information has become a process of everyday routine. Once a player’s identity is verified he or she is not only allowed to play online but also deposit and withdraw funds without any additional ID information. But let’s have a closer look at the process. The contemporary technology based on comprehensive metadata analysis and AI-powered features allowed to accelerate the authentication and eliminate possible errors. Face identification techniques help the neural networks verify the player’s selfie. Facial recognition together with other technologies aiming to identify the person provides a complete picture of each player.  This kind of verification helps operators to decrease the number of under-aged young people who are ready to go any length for playing, including the use of their parents’ documents.KYC also involves principles of CDD and EDD. The first one is an acronym for a process called Customer Due Diligence and applies to the procedures of verification of the customers’ IDs. The second term stands for the Enhanced Due Diligence that suggests more scrutiny for people and businesses engaged in risky activities, which, in this particular case, means players and gambling operators. 
Not only Artificial Intelligence helps accurately process huge amounts of data for a short period of time. Speedy and precise processing is greatly important for the areas involving large volumes of money, which is exactly what a gambling industry is.  EDD processes and systems help to detect suspicious financial transactions and timely report them to the casino management. 

Thus, thanks to the usage of biometric systems, gambling website becomes a reliable and safe place for a player. Gaming providers usually closely work with other platforms, which, in their turn, also use biometric systems. Specifically, linking fingerprints to the personal profile allows a user to skip a couple of steps including a tedious process of password creation. 

Let's take an example scenario to illustrate the above. One of the Swedish companies specializing in the development of payment systems has recently introduced a program called Pay-N-Play. Using it, all new entrants have to do is to deposit some amount of money and start playing while their financial institution verifies their ID. 

What else can be done?
Unfortunately, criminal elements are developing together with technology. Casino abusers are getting more and more refined and make up the hips of deceptive tricks. This is why online operators need to keep their eyes very open and implement modern technologies into their everyday practice in a timely and accurate manner. 
This is a reason for a greater involvement of software developers in the understanding of legislative solutions such as KYC, which will help them to become heavy multitaskers ready to bring iGaming into the forefront of technology.  This is not only a visual recognition, we are talking about, but also smiling, blinking, dropping a jaw, and other facial movements that will ensure higher accuracy and security of authentication.  All these scientific developments will help operators prevent players from using high tech for cheating, such as logging a video recording instead of the live shooting.  

Is it the time for a new era? 
On the one hand, KYC practices have proved to be an important tool; on the other hand, it still needs further improvement. European governments do not want to fix at the achieved results. This is why European Commission is going to introduce a uniform program called e-ID. It would allow all European citizens regardless of their county safely submit their personal data. The main aim of launching this one-size-fits-all platform is to reduce the costs of the European casino owners and ensure minimal risk and friction for both operators and users.

These days we can see how new technologies such as retina and fingerprint scanners, face and voice recognition systems are turning our life into episodes from a sci-fi film. It’s difficult to imagine what might be next, but one thing is certain: we seem to be on the threshold of a new era. The following example perfectly illustrates this statement.
Over the past few years, microchip technology has gained wide popularity in Sweden. It is also called a Radio Frequency Identification, or RFID, and is already used by many Swedish companies. Using radio waves for authentication seems to be a great and beneficial idea, but it is too early to speak about its worldwide dissemination. Some experts reckon that RFID would greatly simplify the verification process; others think that the time is not yet right. Even if the new technology is able to waive cards, keys, and passwords away, this is a topic that involves a lot of controversial questions.

What is the Future of ID verification?
The technological progress is so rapid that it is still questionable, what kind of future will be for ID verification in the coming years. But it can be said with confidence that there is a staunchness of the legislative bodies relating to the subject. This is why they are so set towards stringent laws such as KYC and anything of that ilk. 
Another thing that we know for sure is that internet casinos have to do their utmost to satisfy both their patrons and the laws. This is the safest way to earn an extensive customer database and ample revenue.