The online gaming sector is filled with both opportunity and risk. As online gaming revenues have exploded over the past decades, industry professionals also know and understand that the problems associated with fake accounts and fraudulent activity have also dramatically increased too.
In fact, it’s estimated that online gambling fraud has increased 50% in Q1 of 2022 alone and the risks to businesses in the industry are greater than ever. This provides an even bigger incentive to get your customer verification process right without impacting your new customer sign ups.
With increased fraud comes increased regulation. In recent years as markets have grown, the rules have been tightened around the checks companies must undertake and the data they must collect. This is designed to reduce the impact of fraudulent activity as much as possible.
To ensure your customer onboarding process remains compliant you need to be undertaking a robust process including age and location verification, KYC checks and anti-money laundering (AML) screening.
What are the current online gaming industry regulations?
One of the main challenges the gaming and gambling industry faces is the wide variance in regulations across different markets around the world. The USA online gaming market remains in its infancy and has only been in operation for four years. Despite this it’s projected it will be worth $37 billion by 2030.
Even so, regulations around online gaming and the data gaming companies are required to verify, changes from state to state. The Unlawful Internet Gambling Enforcement Act of 2006 makes operating an online gaming business illegal in the USA, but it does not regulate or stops customers from placing bets within the country.
Individual states have been left to set their own online gambling regulations, which in turn means different levels of detail are required around the verification checks online gaming operators need to undertake. At a base level the minimum requirement is usually age & location verification along with AML checks on customers.
Changing regulations is set to be a key driver of growth in the future, with New York becoming the latest state to legalise online gaming in January of this year.
What friction points impact the onboarding process in online gaming?
With greater security levels comes increased levels of friction to the customer onboarding process for online gaming companies. It’s estimated that around 50% of new online gaming customers have abandoned a process of onboarding with a new gaming provider, based on the levels of information they are being asked for.
Online gaming companies are willing to spend up to $700 per customer in acquisition costs across their marketing strategies, so it’s easy to see the costs a heavy onboarding process can have on overall onboarding and ultimately return on investment.
One of the main friction points which drives this can be found when it comes to ID verification. Although this is a reliable and consistent datapoint for validation, several steps are reliant on user input – which is known to be a key factor in user abandonment.
Friction points for accessing funds or winnings are another industry specific factor to consider. Using ID verification to check against suspicious activity can become cumbersome for users if this is done in error persistently. In comparison, using mobile data can quickly confirm elements like user location meaning that not only the user onboarding process is more streamlined for the customer but a more accurate user verification process for the business.
Why Use Mobile Number Intelligence for Customer Onboarding?
Just as ID data is an extremely reliable source of data for verification, utilising mobile device data in your customer onboarding process can also provide the same tried and tested results. This is because mobile numbering information is one of the most consistent pieces of data associated with your customer.
One of the main additional benefits of using live mobile data lookups instead of more traditional ID verification is that it can be seamlessly integrated into your process via an API, confirming or rejecting a customer’s identity based on their mobile telephone number. The results can be returned in less than a second and include essential information as part of our verification process, including:
Valid Number Check – Our API confirms that the mobile number provided is real and active.
Name and Number Verification– This is then checked against the live mobile network operator databases in the location in question.
Number to Age and Address Verification – A live check to ensure the number supplied matches the address and age of the customer.
A risk-based approach to customer onboarding & management
If you’re operating a global onboarding campaign and monitoring the associated account usage, then you’ll be aware that some locations offer more operational risk than others. An API based mobile verification approach provides the flexibility to shape and change this as you need, to suit your customer base.
We can also take a proactive approach to account monitoring and management, providing notifications if a customer changes operating device, triggering additional verification checks on an ad hoc basis. This can be a particularly useful feature that can be applied, for example, if a customer increases the frequency with which they are claiming winnings or is paying in a large deposit. View our developer API documentation.
What is the future in online gaming customer verification?
As technologies develop live mobile network data will only becoming richer and more reliable. In turn this is adding more value to industries such as online gaming, which are susceptible to money laundering, online fraud, and account takeover. And as such need to take measures to prevent these risks accordingly.
Through API integration these benefits can also be offered in real time, providing strong level of validation, like more traditional methods – in a fraction of the time.
Our development team are experts in integrating our verification tools into your existing customer onboarding process, so if you have any questions please talk to a product expert about your requirements.