iGaming Business magazine Fraud and ID Verification: Market Report | Page 2

FRAUD AND ID VERIFICATION: MARKET UPDATE
HOW FRAUD FITS INTO
THE BIGGER PICTURE
New fraud prevention tools such as device fingerprinting have the potential
to shift the function of fraud teams away from being simply cost centres
towards becoming an integral part of operators’ sales and marketing effort,
says Iovation’s Eddie Glenn.
Dramatic changes are occurring in the
online gambling industry, with new operators
cropping up even as existing operators
consolidate. This, along with strong market
growth and new operating geographies,
significantly increases the competitive
pressure on gambling operators. We’re in a
situation where every new player counts and
every new VIP player is crucial to the success
of the business.
But players are becoming more
demanding as they move from playing
on desktop computers to mobile devices
and in particular, there is less tolerance for
the friction caused by security and fraud
prevention measures.
Operators face significant challenges in
providing players with a frictionless sign-up
process while also protecting themselves
from fraud. To compound the issue,
upcoming changes to online data privacy
regulations in the UK and European Union
are the most significant for a generation and
could potentially impact security and fraud
prevention activities by limiting the type of
data that can be collected about players.
All of these factors are pushing operators
to a position where it is simply not feasible
for fraud management teams to work in
relative isolation and focus only on activities
such as reducing chargebacks and other
types of targeted fraud. Instead, we’re now in
“It is simply not feasible for fraud management
teams to work in relative isolation and focus
only on activities such as reducing chargebacks
and other types of targeted fraud”
At the same time, the techniques
employed by fraudsters continue to evolve
and are growing increasingly complex.
Fraud activities are no longer limited to just
using stolen credit cards or other kinds of
payment fraud. Advanced computer tools
and techniques are being used by fraudsters
worldwide and detecting and preventing
their efforts now requires sophisticated
technologies such as machine learning and
artificial intelligence.
an environment where fraud teams need to
work closely with marketing, sales, product/
business owners and data security teams to
have a broader impact on the business by
improving user experiences, increasing player
account security and contributing to that
all-important revenue growth
Changing habits of players
We’re now way past the tipping point when
it comes to mobile gambling. According to
106 | iGamingBusiness | Issue 106 | September/October 2017
Online Gambling Quarterly, 61% of gambling
operators’ revenue comes via mobile devices.
Furthermore, 72% of betting stakes are from
mobile devices. There are several important
implications for fraud teams here.
First, mobile players demand convenience
and ease of use. Having to login each time by
typing the traditional username/password
is often unacceptable to these users. Even
with password managers, the extra seconds
needed to lookup/copy/paste a username and
password are often enough of a hindrance that
a player will switch to a different game that is
easier to use yet incorporates more advanced
protections like biometric identification.
Second, mobile players are not using only
their mobile phones for these games. They are
also using devices such as their tablet, work
laptop or home computer. Having a consistent
user experience across these different
platforms is vital to the overall user experience.
Why does this matter to fraud prevention
specialists? The most obvious impact is
that fraud prevention technologies used
by the operator must not only support
multiple playing platforms, but must be
able to track fraud committed across all
platforms. Tracking fraud across multiple
devices is difficult without proper device
fingerprinting fraud prevention technology.
These tools allow for devices to be identified
and then later recognised regardless of
which user is actually using the device.
Growing fraudster sophistication
Even though fraudsters and criminals
continue to utilise payment fraud, resulting in
expensive chargebacks as well as increased
credit card processing expenses, they also
utilise a number of other fraud practices.