As we all continue to practice social distancing, online transactions and interactions are quickly replacing most personal contact. Payment processors, restaurants, and all types of businesses are suddenly forced to become expert online vendors and adapt their KYC and other security procedures at lightning speed.  

This is especially true in the online gaming space. As social distancing keeps people from gathering in Casinos and Racetracksmore people than ever are stuck at home with time on their hands.  We expect this to translate into a surge in iGaming traffic and participation  

This increased digital traffic comes at the cost of any opportunity to visually identify their customers and verify their documents in person, or even individually process them on a case by case basis.  There is no real “face-to-face” in online gaming. 

We’ve already seen legislation that will enable venues to open new and more diverse online offerings. As they welcome these new virtual players with open arms, do they have the ability to adequate verify identity and age checks over the internet?   

 

New players mean new risks 

Legal gamblers are not the only ones sitting home with time on their hands. Underage computer users around the world are stuck at home and free from school obligations and may try to take advantage of these new games to fill their time. 

This surge of traffic and variety of new offerings creates an opening for opportunistic bad actors. They might seek to use this surge of traffic to hide money laundering activities or other financial crimes.   

With the strain of verifying so many new users, is the iGaming world able to face these unique threats?  

What does online KYC really mean? 

Part of what makes this new digital space so difficult for businesses to navigate is confusion around what identity verification over the internet really means, and what is required by regulations. 

When it comes to online KYC, there are really three different processes happening: Identify, Verify, and Authenticate. Keeping those concepts separate and distinct reduces internal confusion about what you’re doing and whether in fact you have met your regulatory obligations for KYC (or not). 

Identify – obtain the defined data elements from the customer per the CIP (Customer Identification Procedure) regulations i.e. Name, DOB, Address & Govt Issued ID #. 

Verify – validate, through documentary (or digital) means some or all the elements gathered so that the entity can form a “reasonable belief that it knows the true identity of the customer”. 

Authenticate – as it pertains to providing access to an entity’s services, the exchange of information between the customer and the entity that confirms the customer identity is known to the entity. 

 

Don’t bet on luck… 

Ultimately, this is a complicated process. Having a partner that can anticipate concerns and help audit and optimize your online KYC system is important. At GDC, we can help you develop the digital infrastructure to handle this new traffic, maintain high-security standards, and reduce friction in the onboarding process to create a better experience for those coming to play legally.