Know-Your-Player: Importance of KYC/AML Compliance in the Gaming Industry
The transition of everyday tasks to the web has lent convenience to people, businesses, and multi-sectoral organizations in performing digitally. The gaming industry has also significantly evolved with the digitization of the world. Online gaming has gained eminent recognition and popularity worldwide. However, the robust rise in digital technologies has also led to new forms of crime, i.e., cybercrimes, that include hacking, phishing, identity theft, fraud and extreme financial crimes such as money laundering and even terrorist financing. Thus, it highlights the need for various sectors to seek solutions from SaaS companies to enhance their security against potential threats such as fraud and achieve AML/CFT compliance. Similarly, the gaming industry must adopt sufficient know-your-player procedures.
Why is Verification of Identity Online Game Vital?
Gaming accounts for the largest share of revenues in the global digital media market, generating USD 21.1 billion in 2020. Hence, the e-gaming industry is highly vulnerable to fraud and money laundering because it only operates online. The evolution in the online gaming industry has allowed financial criminals and fraudsters to commit crimes. Imposters use fake documents and stolen identities to access existing accounts or create new ones. They commit fraud and scams through identity theft, harming gamers and gaming businesses. Furthermore, they also steal the bank accounts of gamers and withdraw money. Therefore, the gaming sector and online gaming operators must use adequate security solutions to ensure a safe environment and customer data protection. Know your player solution strategies enable your gaming business to save customers from potential threats such as identity theft and money laundering. Identity verification of the users is the foremost step in this process.
Identity Verification for Online Gaming: Ensuring the Security of Players
The number of online gamers is expected to surpass 1.3 billion in 2025. For this purpose, the identity authentication of players or gamers is crucial for the know-your-player procedure. Your online gaming company must verify the player’s government-issued identity documents, age, source of funds and location as a part of gaming checks. As discussed before, player identity verification for online gaming is critical in preventing your platform from being accessed by bad agents and money launderers. It is also essential for the players because know-your-player checks ensure a shielded customer database from unauthorized access. Moreover, it provides a swift and user-friendly experience while securing the gaming environment for players. Your customers are assured that their details are not mishandled; thus, by integrating effective know-your-player procedures into your gaming business, you can build a trustworthy relationship with your customers and enhance your company’s reputation and integrity. Most significantly, mitigating fraud and identity theft and combatting financial crimes is crucial.
Significance of Age IDV in Online Gaming Verification with KYC
Age verification is one of the vital know-your-player verification requirements to restrict underage access to online games. Gaming enterprises should conduct online gaming verification with KYC and due diligence procedures to regulate the age range accessing their platform. It is crucial to limit minors from accessing online gaming services, especially adult-oriented games, unlawfully. Companies can use multiple age verification strategies like demanding a passport or driver’s license to ensure their customers are not underage. Therefore, implementing age verification in the know-your-player through multi-layered authentication solutions is the need of the hour to mitigate the risk of accessing age-restricted gaming content by minors. It is also considered the social responsibility of the online gaming sector to ensure consumer safety.
Another benefit of age verification during the know-your-player process is that it aids gaming companies in complying with the relevant laws and regulatory standards, mitigating the risk of compliance failure. Collecting customers’ proof of age during KYC procedures ensures that the company is not violating the laws. Therefore, companies must demonstrate that they are committed to following all the legal responsibilities and protecting the customers. Likewise, age verification in know-your-player proves as a powerful tool in targeting advertising and game content to the appropriate age. It ensures players are exposed to content and advertisements suitable for their age group.
Reduce Fraud in Online Gaming for Anti-Money Laundering Compliance
Fraud and scams in online gaming have paved the way for financial crimes such as money laundering. The gaming sector lags in effectively regulating customers, and it is easier to conduct monetary transfers in the form of in-game currency within accounts. There are also some games offering the exchange of in-game currency for fiat money. Hence, it becomes easier for money launderers to commit money laundering by creating multiple accounts and transferring money between them. Without knowing the source of funds, gaming companies can become susceptible to becoming a channel of illicit monetary transfers and money laundering, leading to hefty legal penalties. Moreover, the number of users in online gaming is projected to grow to 1.25 billion by 2027, and without efficient regulatory standards in place, the users are prone to financial crimes. Therefore, it is immensely significant for gaming firms to implement know-your-player strategies to mitigate fraud and achieve AML compliance.
To Summarize
The above discussion sheds light on the significance of KYC procedures in the gaming industry through know-your-player identity verification. It is immensely critical for the owners of gaming firms to ensure adequate measures for fraud deterrence and KYC/AML compliance effectively.
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