Identity verification technology improving registration experiences

13 May 2019

The GB Gambling Commission has brought in new age and identity verification controls, putting additional pressure on operators to verify users’ name, address and date of birth at registration, before allowing them to gamble.

A recent iGaming Business webinar, in partnership with ID verification specialist Onfido, explored how these new controls will impact operators, and how to optimise user experience while remaining compliant.

The panel consisted of Christina Thakor-Rankin, principal consultant at 1710 Gaming and James Baston-Pitt, senior business development manager at Onfido.

Thakor-Rankin explained that operators previously benefited from a 72-hour or three day grace period between onboarding a customer and verifying their age and identity. However, she adds, this effectively created a loophole allowing underage players or those using fraudulent documents to gamble.

Taking on change

Thakor-Rankin blames a few unscrupulous operators for foisting changes upon the wider sector.

“In most regulated regimes, operators have taken a voluntary route and embraced the regulations,” she says. “The internet has put us in a space we never thought we’d be - what we’ve seen is a few bad apples come in, push the boundaries and change the competitive landscape.”

This in turn prompted regulators to scrutinise igaming, through which they identified a pattern of money laundering, criminality and problem gambling becoming more closely aligned.

While the new controls will help efforts to exclude underage or criminal gamblers, the controls could also lead to more friction at the registration stage.

“Easy access thanks to the internet is a great opportunity to win lots of customers, but it’s a big challenge to then know what friendly friction you put in place to help mitigate the risks they’re seeing from being online,” Baston-Pitt says.

“We’re seeing a real range of operators approaching us and asking about how they can approach verification differently, and that’s really important,” he continues. “Right now there’s a real drive to make things better for consumers.”

However he argues that the industry could benefit from clearer regulatory guidance on what due diligence controls to put in place, and what qualifies as sufficient Know Your Customer (KYC) protocols. With the Gambling Commission stepping up efforts to deter operators through increasing fines, this becomes ever more urgent.

“There is a need to re-define what the standard is, and we’re in that transition stage,” Baston-Pitt adds. “Collectively, operators need to discuss what the new best practice should look like.”

Player experience

Thakor-Rankin says there will be some initial disruption caused by the new controls, as operators move to comply with the regulations. However, she suggests that concerns about poor user experience and customer drop-off will decline as players grow accustomed to the new system.

What will then present a problem, she says, is how operators go about adhering to their obligations in terms of money-laundering regulations and social responsibility.

“That is where we’re going to start to see differences in terms of operator approach, and where the use of technology could become a differentiation for an operator.”

“The challenge for the industry is how you turn something with friction and negative UX into a positive experience,” Thakor-Rankin continues. “The obvious thing is communicating effectively what measures you are taking and why.”

The additional friction of due diligence checks can be mitigated by technologies which allow operators a more holistic view of customer behaviour, she adds. These solutions can also allow operators to do more monitoring and identification of dangerous customers or those beginning to display risky transactions.

New technologies, new opportunities

For Baston-Pitt, this adoption of new technology will lead to new ways of verifying customers.

“The challenge right now is the deviation between the ability to see someone in person and trust they are the same person remotely,” he says. “The big shift here is moving more towards the financial services space, which has a high level of friendly friction and ID verification.”

There are three key pillars to the new approach, according to Baston-Pitt. The ability to do things quickly; having greater confidence; and addressing as many people as possible using automation.

“There are some great technologies out there that allow you to do this,” he says. “The first is biometrics, and being able to tie biometrics to legal identities. We are in a position now where you can create seamless journeys, asking customers by their mobile or desktop to prove who they are.

“By using biometrics, you have something far more distinguishable than information like player addresses, and you can combine that with a secondary point of reference such as an identity document.”

Thakor-Rankin agrees: “There are always going to be pain points in terms of user experience. There is no silver bullet solution to any of these things; for businesses, there will always be that choice between cost and compliance. I think biometrics is the only long-term way to know who is behind the screen.”

Baston-Pitt says that while there is no current requirement for operators to carry out enhanced due diligence, by looking to leverage new technologies before they become mandatory, operators can offer a higher standard of protection for customers. By doing so, they can avoid future regulatory action.

He cites Onfido’s known faces tool as an example of such technologies, allowing the company to tell operators if they recognise the player as risky or safe.

Baston-Pitt advises operators assess their pass rates in order to identify areas for improvement and make a strong business case for implementing new tools that will optimise the process. By leveraging such tools, operators can find value in regulations that may at first seem disruptive to business.