Identity Verification: How AI-Driven Tech Is Vital For Online Gaming
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The Indian online gaming industry is growing at a frenetic pace. If we quote the numbers, it is expected to grow from $2.8 billion in 2022 to $5 billion in 2025, at a CAGR of 28 percent to 30 percent. The number of gamers is expected to grow from 420 million in 2022 to 450 million by 2023, and touch as much as 500 million by 2025. With numbers shooting up every passing day, it’s apparent why fraudsters are routing their way toward this lucrative space and giving rise to online gaming frauds.
Using stolen identities from the dark Web, presenting fake ID documents when signing up, underage gaming, and spoofing locations, there are multiple ways scammers siphon off money from real-money gaming (RMG) platforms. Especially during major sporting events such as the IPL, FIFA World Cup, etc., online platforms conduct high-stakes tournaments/games online, causing the frauds instances to get intensified.
Rising Frauds: Creating Distress For Gaming Businesses
As gaming sites offer enticing bonuses and cash prizes every day, a growing number of people are signing up alongside. The real problem arises when there are no strict KYC and onboarding measures in place to substantiate each sign-in.
Despite age restrictions, minors still end up infiltrating the RMG space. Fraudsters spoof their identity by using stolen/fake IDs and creating multiple accounts to make fake bets and bonus abuse. Users sign up from a banned state and get illegitimate access to the platform, putting the gaming operators at compliance risk. Bad actors sometimes take advantage of genuine players – jolting playing experience and causing reputational risk. Everyday instances of gaming fraud like bonus abuse, chargeback, underage playing, money laundering, and suspicious transactions are surfacing.
Compliance With Anti-Fraud Regulations
Gaming operators must comply with anti-fraud regulations like know your customer (KYC) and anti-money laundering (AML) to adhere to government guidelines, mitigate identity fraud, and ensure responsible gambling. However, ensuring compliance with the regulations isn’t the only challenge that online gaming businesses face. They must also meet the expectations of players to create their accounts smoothly and start playing without going through a cumbersome process.
Investing in robust technologies for identity verification is increasingly important for gaming operators to be sure that players are who they claim to be before they start playing, safeguard their business from rising frauds, and provide a frictionless player onboarding experience.
Identity Verification: Striking A Winning Balance
With AI-powered identity verification solutions, gaming companies can identify bad actors and aggregate data across various sources not limited to criminal background checks. Some technologies that enable gaming platforms include:
- Face Match and Liveness Detection: Face match technology validates a player by matching their ID to their selfie. Liveness detection ensures that a player accessing the platform exists in real-time.
- Optical Character Recognition (OCR): Catches document forgery and tampering, sieves fake applications, and enables scalability and ease of onboarding with automated data capturing. Which means a seamless onboarding experience and lower account abandonment rates.
- Digital Address Verification: Captures the location of a user through geo-coordinates and helps in preventing location spoofing, allowing gaming businesses to stay compliant.
- Database-Driven Document Verification: NID verification against PAN or Aadhaar databases allows for quick verification of documents, establishing the identity of a player in real-time.
- Bank Account Verification: Verifying the bank account is crucial to prevent money laundering and financial crimes. The Penny drop method validates bank details along with the beneficiary’s name.
The pressing issues i.e. age/address verification, seamless user onboarding, risk protection, and non-compliance must be resolved with identity verification solutions. Third-party can help gaming businesses with identity verification of the players, without compromising security, compliance, or convenience.
Considering the bigger picture in the future, gaming businesses must strike a balance between staying compliant with the regulations and enhancing the experience for continued player loyalty. AI-powered identity verification solutions can be a game-changer for businesses in terms of securing bottom-line profitability, increasing player loyalty, and staying ahead of evolving regulations for fraud prevention.
(The author is the Senior Vice President at authentication firm AuthBridge Research Services)
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