iGaming Business magazine Fraud & ID Verification Focus 2018 | Page 4
Fraud and ID Verification Focus 2018
COMPLIANCE-DRIVEN
ONBOARDING
John Karantzis explains how to approach onboarding in order to minimise friction,
optimise user experience and maximise revenues
John Karantzis is the founder and CEO of
iSignthis Ltd. He has over 20 years’ experience
across a number of sectors, including payments,
online media, AML, defence and secure
communications.
For AML-regulated sector businesses, the user journey starts at
onboarding, with the identity verification process being at the
forefront of the customer’s experience.
Due to the high-risk nature of the gaming and gambling sector,
regulations such as the EU’s fourth AML Directive and the UK’s
JMLSG and LCCP place stringent requirements upon gaming
operators. Creating an optimised and frictionless onboarding process
is attainable as long as operators have a compliance-driven approach
to the process.
Up-to-date data
In many jurisdictions, regulations now impose a requirement for
real-time verification of data collected that represents the customer’s
past and present circumstances. Therefore, the legacy methods of
relying on historic electronic databases should be revisited, as this
approach only addresses a customer’s past circumstances, not their
present ones.
Operators should look to choose a solution that can generate
remote, dynamic KYC data that is able to identify customers at the
time of onboarding based upon past and present circumstances.
They shouldn’t rely solely on historical data.
With the iSignthis Paydentity solution, players are identified and
verified during the deposit payment flow by using data and metadata
from cards or banking transfers. This approach enables enhanced
due diligence KYC to be performed in real time during the processing
of transactions, focusing on those customers who are willing to
engage and pay for the operator’s services using regulated payment
instruments. This in turn maximises customer conversions, as well as
aligning the cost of compliance directly with revenues.
Geofencing
Operators will also have to comply with location-specific
jurisdictional requirements. The use of geolocation and geofencing
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iGamingBusiness | Issue 112 | September/October 2018
services can help in determining the legality of a transaction
across borders by employing real-time location monitoring
coupled with transaction geotagging.
As part of the iSignthis identity platform, we have integrated
smart geofencing capabilities into our products. We’ve done this
in anticipation of the regulatory needs of our igaming clients for
verifying a player’s location within an approved boundary before
they are allowed to play, bet, transact or receive a payout, depending
on the operator’s preference.
By using advanced localisation technologies, including IP
address, ISP network location, GPS data, browser location and
a secret SMS password sent to the user’s mobile number to check
its location, we cross-check all touch points to ensure there
has been no ‘spoofing’. This way, we enable operators to
remain compliant.
Furthermore, the reporting of the iSignthis Paydentity platform
also allows for attribution of VAT and royalties to the state
corresponding to the player’s residency.
Proactive fraud risk vs reactive
The key to proactive fraud mitigation lies in finding reasons
to approve a transaction, not finding reasons to decline it.
For example, false positives (when an order is declined due
to suspicion of fraud when in fact it turns out to be a
legitimate order) leads to immediate revenue loss and losing
a customer forever.
Operators should seek to use a fraud management solution
that allows for customisation of risk rules and the ability to add
chargeback information into the account history. This will enable
operators to boost conversion rates and avoid reputational damage
to the operator’s brand.
Growth and compliance
Identity verification is a vital part of turning users into paying-
and-playing customers, and gaming companies should find
technology that makes compliance work for them, not against
them. This way, companies can better comply with regulations
in an agile, comprehensive and cost-effective way, while offering
a faster and simpler onboarding process for the benefit of their
customers and the business’ bottom line.