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 120 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.