Best practices to onboard players safely and mitigate fraud through registration, verification and risk assessment
Onboarding players is a crucial part of the customer experience for any online gambling business. The process of onboarding new players involves many steps, including KYC (Know Your Customer) checks, which are designed to ensure that customers are who they say they are and that they're not involved in any illegal activity.
It's important for an online gambling business to be able to onboard players safely because it helps ensure that the business is compliant with all relevant laws and regulations. It also helps ensure that the business has a good reputation in terms of security.
Examining Customer Onboarding Drop-off in Online Gambling, a report done by Hooyu states that 86% of UK customers pass the KYC process, so 14% of potential UK customers do not. This could be due to fraudsters abandoning the registration, however this could also be a significant percentage of potential revenue lost.
To provide a seamless onboarding process, there are three steps: registration, verification and risk assessment.
Registration
Faster and simpler onboarding equals more customers. Onboarding players is all about making sure they know what they're doing. Be sure to let them know how everything works: how to play games, how much money they can bet, and anything else they might need to know.
This stage is also where you collect the user details such the name of user, complete residential address, surname, state, phone number, and email address. Additionally, account Information includes PIN and password approval, username, security question, or response.
Know Your Customer (KYC) and Identity Verification
The next stage is the Know Your Customer checks which includes a number of identity verification processes. This is done to ensure that the customer onboarding is fully compliant. You need to perform the checks below:
-
Age verification: Confirming minimum age requirements
-
Document Verification: Verified using a valid form of ID, such as a passport or driver's license.
-
Address Validation: Verify a player’s address by cross-referencing the address against official sources
Risk Assessment
Online gambling businesses require a risk assessment strategy. To mitigate fraud, casinos need to be able to identify the threats or red flags, perform a due diligence analysis and evaluation. This risk assessment can then be carried out to identify threats with both new and existing customers.
Here are the steps to develop a strategy:
Identification
Some players might need additional verification and would require further investigation. The identification process begins by developing an initial list of potential risks or risk factors. These risks are the causes of money laundering and fraud.
The UK Gambling Commission has categorised customers whose activities may indicate a higher risk. These include but are not limited to:
-
customers who are politically exposed persons (PEPs), family members of PEPs or known close associates of PEPs
-
high spenders – this will vary among casino operators
-
disproportionate spenders – whether customers’ spending is proportionate to their income or wealth
-
regular customers with changing or unusual spending patterns
-
improper use of third parties
-
multiple player accounts – some customers will open multiple player accounts under different names to hide their spending levels
Analysis
Analysis involves considering the likelihood, impact and consequences of the identified risk. The aim of this stage is to gain a comprehensive understanding of each of the risks in order to assign an importance to each of them.
Evaluation
The evaluation stage involves assessing the risks analysed during the previous stage to determine priorities for addressing them. These priorities will help develop a strategy to mitigate risks.
The onboarding process is a crucial part of your company's compliance strategy. Performing these practices helps you meet legal requirements and avoid risks by verifying the identity of new players and their suitability.