The global gaming industry has instantly blown up in just a few years. Due to the heightened alert caused by the pandemic, it’s no surprise that gamers have had an increased opportunity of immensely trying out new games and online activities.

Analytics show that the gaming industry generated about $155 billion in 2020. 2021’s total revenue was forecast to hit around $175.8 billion, with a reach of 2.9 billion worldwide players by the end of the year.

Even nontraditional gaming companies such as Apple, Meta, and Google plan to get involved with the gaming industry trends.

In addition, the industry is expected to expand vigorously by 2023, at a compound annual growth rate of 10%, doubling the statistics conducted way back in 2019. The gaming industry is thriving, so are the fraudsters.

A quick rundown: Threats to the gaming industry

As the future progresses and gaming continuously implodes, the rapid growth of the gaming industry is now facing multiple outlets of risk concerning financial crime brought by the globalization of technology.

However, online gaming is an avenue for criminals, which can be used as a modern way of washing “dirty money.” With around 2.2 billion active gamers spending money over several gaming platforms, it is now easier for fraudsters to scam and hack players’ accounts. Financial data, including credit card information, is becoming easy to access.

The industry now faces the challenge of preventing money laundering, credit card fraud, identity theft, and terrorist funding.

Unfortunately, there are instances where cybercrime happens, especially when involved in underground trades. Unless KYC is executed correctly, the effects could continue to deteriorate and more personal data might land in dangerous organizations’ hands.

Staying vigilant is the key to preventing online fraud. A KYC and anti-money laundering (AML) compliance helps protect online gaming providers from onboarding fraudsters.

What is KYC (Know Your Customer)?

Know Your Customer or KYC refers to the steps taken by an institution or business to assess the customer’s identity thoroughly. KYC is a critical step in processing for the companies in the gaming industry to be compliant with the law. In short, it is a standard procedure conducted to verify the identity of a specific individual or a business. In addition, it protects game investors and its clients with its additional security measures.

KYC aims to provide a high level of assurance to its gamers by implementing strict compliance requirements to establish a haven for them.

What are the three components of KYC, and what are its requirements?

The three most common components of KYC include the following:

• First and last name
• Date of birth
• Residential address

All these details are a part of the KYC requirements. KYC compliance begins as soon as the account is created. Regulators must validate the verification process with official documents such as government-issued IDs. For example, a gamer can provide a driver’s license, passport, or national ID, and photographic evidence if asked to conduct an identity comparison. During the identity verification process, gamers may also submit proof of residency or access to verify their location.

Age verification is a constantly changing requirement, and onboarded players must comply with the minimum age requirement. According to a report by the Gambling Commission, regulatory authorities should protect minors online since almost 50,000 children have been classified with gambling problems.

How can the gaming industry meet KYC requirements and reduce customer friction?

As fraudulent online activities arise, all gaming businesses should comply with KYC laws and work with the regulatory authorities. Over the years, the regulation and security measures have increasingly been stricter. Consequently, operators must implement anti-money laundering procedures, or they might get in trouble.

There is no natural way of avoiding customer friction, but the best way to lessen the friction is for operators to be more innovative about KYC handling. Players have a very low tolerance for stressful onboarding. In fact, a couple of ID checks and an inconvenient sign-up experience may hamper new players from joining. So the question now is, how to make onboarding frictionless? An efficient solution while following KYC regulatory requirements is combining gaming with the essence of advanced technology.

1. Gaming providers should start implementing a smooth user experience for new customers.

Change outdated interfaces and sign-in forms and opt for the automated real-time onboarding process. Existing customers should also enjoy a hassle-free login process every time they use their accounts. If a gamer is an existing user, track the IP address, device ID, and double-check the phone verification to ensure its identity.

1. Integrate AI-based solutions with human analysis.

For a provider to achieve a more substantial level of protection, it is advisable to combine the works of human assessment and artificial intelligence. Online identity verification is an effective way to ensure the physical presence of a user. With a 3D biometric-based live detector, it is easy for a gamer to scan his face during verification.

Technology might be the future of a better KYC

The desire for a seamless onboarding experience and the utilization of better KYC workflow management is more vital than ever in the gaming industry. Technology is expected to simplify the work for everyone and can adapt to the tracking regulations worldwide. A well-built system will allow the gaming experience to have its automated audit trails in just one click. In addition, databases and documents can be easily traced without overwhelming staff.

With more people joining the bandwagon, there is still a long way to go for these preventative measures and in-depth growth for the gaming industry. People are still checking the benefits and risks of the possible KYC technology shift, but the future of the gaming industry sure is exciting.

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