Here is a scenario that shows the importance of having a digital KYC system integrated with your business especially when you are dealing with money in one way or another. People might think that a business such as online gaming site does not need such a solution
The Drug Dealer:
Ok here’s a situation, you’re a drug dealer and you have just delivered shipment as per agreement with your business partner in another city. You had already taken half of the amount when the deal went through and your business partner brought the amount with him. Now you want to get the remaining money but in a way that will be inconspicuous. As you don’t want to be caught in a money laundering case as it will open up the way for the law to pick up on the rest of your dealings. So what do you do? You’re trying to come with an easy way. To get inspiration you surf the Internet as you are reading an article a pop-up appears — its an ad for an online casino. Suddenly the light bulb in your head turns on and you call your business partner and ask him to a one-on-one blackjack game…
The Online Casino Owner:
The other side… You have always found luck to be on your side, you lived for betting and gambling was your career. After gaining much success you decided to open up your own Casino, but not a physical but an online one. Here you would offer multiple online games for the people keeping your percentage you also offered one-on-one games. Everyday was a good day since the house is mostly in a win-win situation. All seems good until one day the FBI walks into your office and straight up to and tells you that they need access to your player data… Seems your luck ran out.
The FBI’s story, one of our agents was working undercover with a drug dealer during background checks we found out that he had connections with some terrorist organisations. He recently received a shipment of drugs and forwarded them. We don’t know exactly how he is transferring the payments until now, our agent found out that he loves gambling and accesses a site, through which he gambles with his business partners. They have tracked down the location and our agents are on the way to get the required data…
The online casino owner got in a lot of trouble he did not have any digital KYC system integrated into his online gaming service but since he cooperated the penalty was lessened. The drug dealer and his associates were shut down and brought to the law and luckily were stopped before they could initiate any terrorist funding.
The Importance of Digital KYC and Background Checks
As we can see in the story above, had the casino owner implemented a KYC and AML (Anti Money Laundering) solution it would have saved him a lot of trouble. The system would have carried out comprehensive background checks identifying possible threats and allowing the owner to take action accordingly. The online gaming industry is a hotspot for money laundering although there are certain policies governing the industry the chance is still there that it could be used for terrorist funding.
More Scenarios Highlighting the Importance of Digital KYC
Identity theft protection has become a necessary requirement for the online gaming industry. Many a times, players are invited to buy add-ons and perks in the online games, for which they are required to make payment using credit/debit cards. This means that validation of online transactions is in order through digital KYC verification of the players who wish to make purchases.
Fraud protection services must be employed by online gaming companies so losses through identity frauds and sham customers looking to dupe their way through the purchases are kept to the minimum. Gaming sites may also run into problems such as registration of underage individuals, which can become a headache when the regulatory authorities investigate the company’s proceedings and customers. Background checks are the way to go when it comes to solving problems like fake ages and cards.