New Rules by the UK Gambling Commission and Their Impact

New Rules by the UK Gambling Commission and Their Impact

The UK Gambling Commission announced new gambling rules earlier this year to make gambling safer and fairer. Since online operators are required to follow these new rules, it has sparked an interesting debate since gambling platforms are to verify the age and identity of customers before they can gamble.

The gambling business is growing at a staggering pace. According to the Gambling Commission, 

“Statistics show that industry profits (1) from the sector have grown 10% to 4.7bn in the last year, and public participation has increased from 15.5% in 2014 to 18.3% in 2017. It is estimated that nine million people across Britain gamble online.”  

Safety for Children

Previously, the customers did not have to verify their age at the time of gambling. They could verify within 72 hours, making it possible for underage participants to enter a game. The operator, however, was not allowed to release the winning unless the person verified their age. And if found underage, they would be denied the winnings.

Under the new rules, the player cannot enter the tournament unless they verify their age. They can’t even deposit funds in their account or use free bets or even play with someone else’s money unless they prove their age.

The rules are much stricter now as it applies to free-to-play games as well. Technically these games do not constitute gambling since there is no real prize money involved, however, legally the underage participants still cannot participate.

Fairer Gambling Environment

There have been incidents where gambling platforms have asked for additional ID information when a winner tries to withdraw. Almost 15% of the complaints were about incidents where people were unfairly prevented from claiming their winnings. 

Under the new rules, all the required information such as name, address, and date of birth, is collected before the customer funds his account. Remote licensees are required to verify these things at the very beginning. If there is a need, they should promptly ask for additional information. 

They are also required to inform the participants about the identity documents and other information they might be required and take any necessary steps to maintain that information. These changes will help prevent fraud or criminal activities. Now the operators won’t be able to come up with excuses of asking for additional information while withdrawing funds.

In general, when the operators have such information, they can prevent harm and detect any illegal activity. 

Another impact of the new rules is that the person will be identified if they have been self-excluded. Verification by operators will mean that unless the customer verifies their details or provides the required info, they won’t be allowed to gamble. The operator can check these details against their own database as well as the one that Gamstop is holding.

How are these changes helping the population?

First, children and minors will be protected from the harmful impact of gambling. Second, people will also be shielded from fraud and other gambling-related crimes. And third, upon withdrawing their winnings the customers will receive those without unnecessary delays.   

Britain is the largest regulated gambling market in the world. It is imperative that it should be held up to the highest standards of regulations. The new rules were proposed after an official review of online gambling. 

In a nutshell, the changes intend to achieve the following;

  • Protect children and ban operators from providing free-to-play games unless the customers’ age is verified
  • The new process should increase the speed and accuracy of age verification
  • Improving the effectiveness of age verification processes
  • Operators can limit the spending of players based on their affordability
  • Ensure that unacceptable marketing and promotions are minimized as much as possible
  • Handling disputes and complaints swiftly and efficaciously
  • Helping customers with better interaction who might be experiencing (or on the verge of facing) gambling-related problems.

Of course, the reviews and improvements will not stop. We can expect more changes and going forward. For example, the gambling commission will likely suggest improvements in gambling-related products.   

Other suggested improvements for the future, mentioned in the UK’s gambling commission website are;

  • Reviewing requirements on the protection of customer funds. This also entails evaluating the current protection measures and checking dormant accounts
  • Examining the limits of gambling credit
  • Analyzing changes to make sure that consumers can easily withdraw funds

Why the Need for Changes in Rules?

Simply put, the old rules had loopholes that were not in the customers’ best interests. For instance, three companies (Daub Alderney, Casumo and Videoslots) were fined a total of £14m for failing to implement effective measures that prevented money laundering and protected customers from gambling-related harm.  

As an extreme example, the gambling license of CZ Holdings was revoked after their license review. The company is now banned from providing gambling services in Britain. 

The crackdown is not unjust since the old form of rules was simply being followed in letter but not in spirit. Neil McArthur, the Commission CEO, is taking a strict stance on the rules. He mentioned that it is not enough to simply put policies in place, the participants need to understand the rules and should take responsibility for following and implementing them.

The following is a snippet of the changes in the rules, and compares them with the old ones;

Change Previous New
Age Verification Online operators have been allowed 72 hrs to carry out age verification checks, which gives a slot to underage participants to gamble   Operators are obligated to verify the age of participants before they can deposit money in their account
Identity Verification Gambling operators were not required to check for KYC (know your customer) before depositing money in the account, only after the participants have gambled Operators are obligated to verify the name, address and date of birth of the player before they allow them to gamble
Eligible Games Not mandatory Underage participants are not allowed to play free gambling games (even though no money is involved)

When KYC is in check, it gives the operators more leverage to protect participants from harm. These checks also protect the participants from manipulative operators who try to put hurdles when withdrawing. Since the ID and related info is already submitted, it means that the operators cannot demand it when someone wins the bet.

Under the new rules, the shady online operators who demand unnecessary identity checks only when the customer tries to withdraw winnings cannot exploit the system. Just because of the new rules 15% of complaints regarding this particular issue can now be resolved. 

What this means is that the operators need to check someone’s age before they gamble and not after. This deterrence prevents children and underage individuals from gambling online, and hence, inhibits gambling-related harm.

The UK Gambling Commission has not prescribed exactly how the procedure should be carried out. But then this discretion should not give them freehand, as they have to comply and implement the rules to the best of their abilities.    

A Short Intro to the UK Gambling Laws

The new legislation aims to protect children and illegal gambling. It also assists gamblers to make safer bets and protects them from gambling-related fraud. Moreover, it protects children and people under self-exclusion options to help them overcome gambling addiction.

According to the definition of Gambling Act of 2005, it is “betting, gaming or participating in a lottery.”

Then there are six main types of gambling;

  1. Arcade: Adult and family games 
  2. Casinos: Both online and live casinos
  3. Lotteries: This includes tombolas, sweepstakes, and raffles.
  4. Betting: Online or bookmakers
  5. Bingo: Online and bingo halls
  6. Gaming machines: Examples include betting and fruit machines.

With the exception of arcades all gambling portals are regulated. Arcades are partially regulated. AGCs (gaming for adults) and FECs (gaming open to families) require gambling licenses from the Gambling Commission. UFECs (arcades that are open to families but do not serve alcohol) only require a local permit.

The latest risk rating by the UK Gambling Commission is as follows;

Gambling Sector Current Overall Risk Rating
Remote (casinos, bingo, and betting) High
Lotteries (remote and non-remote) Low
Gaming machines, technical gambling software (remote and nonremote)  Medium
Casinos (nonremote) High
Bingo (nonremote) Medium
Betting (nonremote) On-course Low
Betting (nonremote) Off-course High
Family entertainment centers Low
Arcades (nonremote) Medium

This classification helps in understanding the new rules and their needs. It also helps to see the areas where the Commission is focused on. 

In this risk-based supervision and risk management, digital identity services will be promoted. The entity responsible for risk management is the Gambling Commission among others. The due date is set for October 2019. Also, enhancing overseas capabilities on an ongoing basis is on their agenda. 

Her Majesty’s Treasury (HMT) will be working with the New Digital Identity Unit along with private and public partners to promote digital identity services.    

What is the minimum age to legally gamble in the UK?

One needs to be at least 18 years old to legally gamble, be it online or live. Gambling operators, sportsbooks and online casinos are legally required to confirm that the participant is at least 18 years old. They usually confirm the age through ID and other supporting documents, if the need be.

An exception here is that 16-year-olds can participate in lotteries, football pools, and scratch cards. 

What will happen if an operator does not verify the age? 

The UK takes gambling violations very seriously. The players will not be given their winnings if they get caught. It means that the players must take it seriously that when they read “you must be 18 years old to access this website.”

Here is a short table that compares the legal age for gambling in different countries. 

Country Legal Age for Gambling
Germany 18 or 21 depending on the state
Greece 21
France 18
United States 21

The Rules regarding Lottery are a little Different

The UK’s National Lottery follows stricter rules. The lottery has been running since 1993 and includes different games like Lotto and Thunderball. Gamblers in the UK can participate in pan-European and EuroMillions lottery, which include nine different countries.      

Please note that 28% of the lottery prize goes to “Good Causes,” and this has raised over £40 billion to date. 12% of the prize pool goes to the state and 15% covers the cost of running the lottery and selling tickets. 

According to the Uk Gambling Commission Act 2005, the list of offenses is quite long. Here we share a small part of the major gambling-related offenses.

Offense Fine
Gambling by an underage individual £1000
Employing an underage person to provide gambling facilities 51 weeks in prison and/or £5,000 fine
Cheating, attempting to cheat, or assisting 

someone to cheat at gambling

51 weeks in prison and/or £5,000 fine
Operating gambling facility without 

A licence or permit

51 weeks in prison and/or £5,000 fine
Violating advertising regulations 51 weeks in prison and/or £5,000 fine
Offering a machine without a licence or permit 51 weeks in prison and/or £5,000 fine

Let’s review the new rules by UK Gambling Commission to license conditions and codes of practice (LCCP) and their implications. These have risen the standards for alternative dispute resolution (ADR). More importantly, these have boosted the obligations regarding how licensees interact with those customers that might be at the risk of gambling-related harm. 

The latest changes will be applied later this year and the next year.

Changes to Alternative Resolution Providers (ADR)

The new rules make it an obligation for gambling businesses to only use those ADR providers that meet the additional standards along with the ADR regulations. Customer service, governance, and decision making fall under these additional standards. This makes the role of an ADR provider clearer. It also reassures the customers that the provider is objective (independent of gambling operations).   

The gambling operators are also required to interact with customers that might be vulnerable to being harmed. This has strengthened the requirements to interact with the customers.   

Note that these rules will come into effect on 31 October 2019.

The commission aims to make operators more responsible and encourages them to cooperate under voluntary arrangements for research funding. The funds will go to the  National Strategy to Reduce Gambling Harms in Britain. This aims to support greater transparency of the funds that the gambling businesses contribute over time.

These rules regarding operators and their contribution to research, prevention, and treatment of gambling fraud/harm will come into effect on 1 January 2020.

The Easiest Way for Gambling Operators to Comply with the UK Gambling Commission New Rules

At Shufti Pro, we excel at real-time age and identity verification. Our mission is to follow and assist in implementing KYC and AML (anti-money laundering) regulatory compliance. Read our blog post for details on how we provide age verification for online gambling platforms.

We normally perform age verification immediately after completing the online identity verification. 

Identity verification is a multistep process where the end-user (gambling player in this case) is assessed for authenticity. This also helps establish the fact that they are who they claim to be. Once this is done, we can move on to age verification. For this, we normally require a government-issued ID document. Usually, driving license, ID card or a passport is used to verify age.   

With optical character recognition (OCR) we readily extract information from documents. This works so well for operators since they can perform age verification as part of the identity verification. 

How API-based Technologies Can Transform the Future of Online Marketplace

How API-based Technologies Can Transform the Future of Online Marketplace

API Based Technologies: Application Programming Interfaces (APIs) are giving advanced ways of digitizing businesses. Multiple online marketplaces are extending their services using external and internal APIs. This helps online businesses increase customer traffic by providing them better user experience. It is estimated that out of 7.7 billion global population, 1.92 billion people are digital buyers (which is increasing incredibly). The reason is the advanced API technology that is playing a key role in the online marketplace in attracting customers. There are around 224 marketplace APIs available which include internet APIs, browser APIs, and a variety of product APIs. Online businesses are going beyond basic API management to create a full-fledged API marketplace to connect the producers and consumers rapidly.

What are APIs?

APIs are a set of procedures and functions through which applications are built to access the services, data or features of a system. Today, companies avoid the installation of multiple software and their management. All they do is that they use APIs as SaaS (Software as a Service) and integrate several APIs depending upon the need of their business. Those APIs then connect the producers and consumers to provide desired services. API management on the other side is a platform that manages the APIs. It helps APIs behave evenly according to their standards and services. API management supervises all the security, speed and compliance-related policies provided to the businesses.

How does the API-based technology works?

Multiple APIs (depending on the need) are integrated with the application. The API interface runs and delivers information from the application that you are using to the system over the internet. The response from the system then comes back and delivers the data to the application. Through each step in this process, the interaction is continuous between the system and the application. APIs ensure the interaction between the services, data, applications, and systems. This data varies from cloud applications to the online marketplace, it is the responsibility of APIs to assure connectivity.
The market volume of AI-based technology is rising rapidly from the last five years…
A broad interest in enterprise-oriented technologies is seen in the past few years. These technologies include SaaS, AI, big data, IoT, and microservices. APIs are the focus of all these areas. The communication and deliverance of several services are possible through APIs. Today, the accumulation of customers in the online marketplace due to the integration of APIs with their system. These APIs provide better user experience and facilitation to the companies.
Salesforce is a software company that generates its 50% revenue through APIs. Whereas, eBay is generating 60% and Expedia is generating 90% revenue through APIs. 75% of mobile applications use internal APIs to provide its customers with multiple features and services. The integration of Facebook and Twiter APIs is increasing the demand for more APIs.

API Based Technologies and Online Marketplace

Identity Verification APIs

Over $445 billion is lost annually due to security breaches. The security of online stores should, therefore, be taken into consideration. Security APIs are available for e-commerce stores to integrate with their system that provides encrypted APIs to secure their system from attacks. Identity verification APIs help online businesses to identify and verify the customers onboard to avoid credit card fraud and online payment scams. Anti-Money Laundering (AML) and Know Your Customer (KYC) Complained APIs are integrated with the systems to ensure that fraudsters do not enter into the system and perform malicious activities. There are multiple verification techniques available through APIs that system integrates according to their system need. Verification can be done using multiple documents, facial recognition, video verification or handwritten notes. For these verification methods, separate APIs are available which can help the online marketplace to secure their system. Even if it is an online account opening service by banks, the banking industry needs to ensure that the traffic coming into their system is honest. API Based Technologies help financial institutions which are offering online services to their customer to verify that they are protecting their system from all kinds of vulnerabilities.

Speed Efficient APIs

To provide customers a fast onboarding experience, many speed reliability APIs are available that ensure robust processing. These APIs not only facilitates the customers but also at the administration end, provide smooth system management. Also, shipping and delivery APIs are part of the online marketplace to track the parcel until it is delivered to the customer. These APIs help reduce the error rate and complexities associated with the sorting done manually. To coordinate with the customer regarding their parcel status, shipping, and delivery APIs help to achieve the goal of better user experience.

Payment Handling APIs

Payment Handling APIs provide the customer with an easy interface to add their card and payment details. These APIs help both customers and administration analyze and manage transactions properly.

Future Prospects of API based Technologies

In natural language processing, predictive analytics APIs are emerging. These APIs combine enormous data which includes text, visual data, location, network and information gathered through mobile phones. The APIs are getting more secure with encryption and cryptographic technologies. APIs are profiting several industries with many reliable services which include commerce, retail, financial services, the gaming industry, and entertainment.
In the future, APIs will be managing all the data more efficiently and jump into the data management of the sensor’s level. The advance level security of blockchain will be made sure through APIs. the data gathered through IoT devices will be managed and flew through APIs. Not only this, almost all industries are using APIs to advance their systems to provide better user experience and generate more customers.
Just like Amazon Cloud Service is using data-driven through API Based technologies, a different system integrating with APIs can utilize the API-driven data for multiple processings and training purposes. That data can be used for verification and AI model training purpose. By examining the endpoints of API, documentation will be generated automatically.

Conclusion

An online marketplace is revolutionizing with the help of multiple integrated APIs. APIs help reliable communication of applications with another system. They also provide user-friendly interfaces to engage the customers. These APIs are internally linked with their system to provide a secure, reliable and better user experience.

Millenials Bank

Why Millennials don’t care about Conventional Banking Services?

Millennials are different from the baby boomer generation. They earn less than what the previous generation was earning at their age. It is odd that the banks have been unable to capture the market of millennials – the perfect target audience right now. However, faster customer identity verification can make banks millennial-friendly. 

Overview of Millenials

Millennials are the first of their kind – the true digital natives! 

They are internet savvy and armed with smartphones, which they check dozens of times a day. We are talking about people currently in the age group of 18-34. Smartphones play a huge role in their lives. 

The banks have started to think in terms of apps and online services. Also, the young generation is prone to fast internet.

What does internet speed have to do with customer identity verification?

A lot!

Banks are not selling toys or stationery. They have to comply with the financial regulations in providing their services. Say, a millennial wants to open a bank account. The ideal or expected way would be to open it over the internet. But not many banks are providing these services currently.

Why Banks have a hard time Capturing Millenials 

The millennials are not happy with the conventional banking system. They do not have to depend on any particular bank or service in most cases. An army of Fintech companies and products are swarming the markets. 

But despite the banks’ marketing, they are not there where they would like to be, in fact, they are far from it. If there is a bug in the app of a bank, the young customer would not like to wait for it to get fixed. They would like to know, which service is better and faster. 

Moreover, the banks have not yet figured out the perfect products that cater to this market. Millennials are putting off buying large ticket items but, in the future, they will be holding a significant amount of wealth.

Cybercrime is the elephant in the Room 

Let’s address the elephant in the room; privacy and security. We are spending more time gawking at the screens of computers and phones than ever before. You can buy stuff online, apply for a visa, date someone, and the list goes on. However, among this significant amount of data, security is of utmost importance,

Privacy breaches, hacks and other forms of cyber attacks have made this generation weary and cautious of banks. Since the majority of wealth exists digitally, this raises concerns for privacy.

A Safe and Bright Future

One obvious tool to handle security concerns is the verification of identity. When a customer is about to send or receive payment, the verification should be foolproof. This relates to the identity of the user. 

Each time we interact online, it leaves a footprint, which creates their digital identity. As technology gets more advanced, so do the tools. Banking and security services that are powered by AI and machine learning can collect the data better, faster and with better accuracy. Faster identity verification solutions are a healthy sign for banks. 

Conclusion

There are troves of rich data available for businesses. How fast banks capture and utilize it to offer banking products to customers will define who can corner this market first. Banks need to get aggressive in integrating state of the art technology in their services. Otherwise, more technology-based services will take over.

Kyc for icos

How KYC for ICOs can Make Cryptocurrency Great Again?

Give people a mode of money transaction free from banks. That was the thought behind cryptocurrency. And blockchain technology – that powers the majority of cryptocurrencies – was the perfect tool to achieve that.

But things have not gone as planned. Mention Bitcoin in a gathering and you will surely hear voices of fake KYC Of ICOs and Ponzi schemes.

 

Start 15 Days Free Trial of Shufti Pro KYC Services Now!


What went wrong with Cryptocurrency?

The deregulated nature of Bitcoin worked well in attracting money. But it created another problem. When something is not regulated people exploit it. Scammers and double-dealers started jumping on the bandwagon of ICOs with the intention of fooling people into giving their fiat currency.

On the flip side, those that were looking to park their illegal money hit the jackpot. ICOs that genuinely wanted to create value in the world through their coins got the short end of the stick.

The financial regulation bodies started cracking down on kyc ICOs and exchanges. ICO’s could not take investors onboard without taking the risk.

According to a statement by the securities and exchange commission;

“A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation”

So, what’s the solution?

A tried and tested solution is Know Your Customer or KYC compliance.

What is KYC ?

KYC stands for know your customer, it is a process that lets companies know their customers. It includes the verification process that prevents fraudulent individuals from abusing their services. Banks have been successfully using KYC services for years.

Different financial regulatory authorities have made it mandatory for banks to comply with KYC verification to make sure that the person they are dealing with is not a fraud.

Banks check and verify personal information through several means including document verification. They also readily appropriate credible third-party identity verification services or KYC service providers.

Documents such as government-issued ID cards and driver’s licenses help smoothe the process of investing.

What is AML?

AML – the anti-money laundering act – prevents people from laundering money. ICOs can put this in place as well to ensure that the people buying their tokens are not on any black or greylist.

KYC and AML regulations put a barrier to entry by checking the identity documents. FINRA Rule 3310 governs the AML compliance of companies.

Advantages of Implementing KYC for ICOs

  • Deters scammers from engaging in ICOs
  • Fights money laundering
  • Protects investors’ assets
  • Fewer legal, tax and credibility issues
  • A healthy relationship with banks

Funds raised by ICO or token sales can attract black money. But KYC and AML compliance can restore people’s faith in the blockchain based economy. Cryptocurrency exchanges can also put these compliance measures to ensure that the ICOs are genuine. Then the token economy will truly benefit the population at large.

Identity verification services

12 Ways Identity Verification Services Helping Online Businesses

The online marketplace has a culminating presence in the business world. Worldwide e-commerce sales are expected to reach an astounding $4.8 trillion by the end of 2021. Additionally, the cumulative number of online shoppers reaching over 2.1 billion. Moreover, recent studies have reported a 277% increase in global e-commerce sales over the past few years. Online merchants must fight to maintain their competitive advantage when stakes are this high. An automated Know Your Customer (KYC) verification solution can enable them to build a seamless experience. Here are 15 ways in which online businesses can enjoy identity verification services.

Ways in Which it Enhances Security

 

  • Clamping Down the Potential for Fraud

Online businesses, in particular, are more prone as well as vulnerable to fraud. Cases of identity theft and credit card fraud are common in e-commerce stores. Businesses often receive requests for refunds when a fraudulent transaction made. An identity proofing solution helps in curbing the potential for fraud by verifying users remotely. This results in the reduction of chargebacks and an increase in profits.

 

  • Protect Your Reputation in the Market

Online stores that are vulnerable to data breaches and has shoddy cybersecurity systems tend to build up a bad reputation in the online market space. Similarly, when a company incurs one too many chargebacks, it tends to lose its goodwill amongst its customers. This can be remedied by implementing an identity authentication method that can verify consumer identities within seconds. By fixing the loopholes in their security structures, businesses can protect their user data as well as protect their reputations in the market and among customers.

 

  • Shield Customers From Inflated Prices

Online frauds including identity theft and credit card fraud end up increasing chargebacks and fines for businesses. This, in turn, makes a dent in the company’s bottom line and thus forces them to increase their prices to cover these costs. Retailers can protect customers from price increases that are uncalled for. With a sound KYC system in place, businesses can eliminate the threat of fraud in the first place.

 

  • Avoid Costly Lawsuits and Fines

Frequent cases of credit card fraud and identity theft in a business can lead to questions about its online security. It can, therefore, lead to elaborate lawsuits from victims affected by identity fraud. On top of that, credit card companies also tend to sanction merchants who do not observe better fraud prevention measures. Additionally, there are businesses that offer age sensitive products or services. They are legally bound to verify the age of their users. All these problems can be easily addressed by an identity verification system such as Shufti Pro that offers an AI-based solution for Identity verification services that also include age verification services along with facial recognition and ID authentication.

 

  • Protect Your Customers

The foremost advantage an identity authentication system presents for businesses is that it enables them to protect their customers from the fallout of fraudulent transactions. Identity fraud can go unnoticed for weeks, even months on end, allowing the perpetrator to accumulate charges on a person’s credit card. Online ID verification instantly detects a fraudulent user and blocks his/her access before they can cause any significant damage.

How Identity Verification Services Can Improve Sales and Conversions?

 

  • Enhancing the Purchase Process

Over 13% of online customers abandon their purchases due to poor and lengthy customer verification procedures. A number of online websites have complicated purchase processes that require elaborate information from customers in order for them to proceed with their purchase. Sometimes customers are even asked to enter details more than once, thus increasing their frustration. This eventually leads to higher purchase abandonment levels which ultimately drives down sales. An efficient identity proofing system for customers can make life easier on both sides.

With a system like Shufti Pro businesses can implement OCR (Optical Character Recognition) to extract data from a user’s documents verifying their identities at the same time. It significantly reduces the time for data entry and allows for increased accuracy, thereby reducing human error. Automated KYC systems have therefore made the purchase process easier for both the customers as well as retailers and has consequently resulted in increased sales.

 

  • Reducing the Cost of Online Fraud

As the rate of online frauds decreases with a more efficient user verification process, the resultant costs naturally fall. The reduced costs ultimately lead to increased profits creating a win-win situation for online retailers. It also reduces the number of chargebacks and fines for companies, ultimately leading to an increase in their revenues.

 

  • Personalising Offers for Customers

Once a customer’s details are obtained through a verification system, a company can make use of them to identify returning customers. This also enables marketing teams to personalise products or services for customers and target them in a more efficient manner. This practice can significantly impact customer experience, making them feel more valued, resulting in their prolonged lifetime value.

 

  • Complying With Global Regulations

One of the biggest incentives for businesses to implement an effective KYC system is to comply with global compliance regulations. Regulatory authorities – both national and international – Identity verification services have been highly active over the past couple of years to curb money laundering activities. In an attempt to make sure that businesses comply with regulatory requirements, authorities have started sanctioning banking institutions. Over the past decade, the financial sector has faced nearly $26 billion in fines.

KYC services enable businesses to comply with worldwide regulatory requirements effectively by identifying and verifying clients more accurately. Service providers like Shufti Pro also offer AML screening services that allow businesses to screen high-risk individuals through global sanction lists to identify Politically Exposed Persons (PEPs). Online identity verification, therefore, makes complying with global regulations easier for businesses.

 

  • Building Trust Among Customers

When online businesses take active measures to prevent fraud and comply with legal and ethical obligations, they tend to build trust amongst customers. Merchants that experience little or no cases of credit card fraud tend to have a good reputation amongst customers and end up acquiring customers for life.

 

  • Providing a Seamless Customer Experience

Another advantage of online identity authentication services is that it reduces a significant amount of hassle for customers. It tends to reduce the time it takes for the customers to enter their details. It further reduces the time it takes them to verify themselves and their credentials through facial recognition and document verification. With verification time reduced to under a minute, customers are able to complete the purchase within minutes. KYC service providers like Shufti Pro are able to provide the sort of seamless experience for businesses and their users that can enable them to reduce cut down their purchase abandonment rates.

 

  • Reduce Errors in Shipping

Manual data entry methods are prone to errors – both on part of the merchant as well as the customer. With digital identity verification, e-retailers can reduce these errors through a service like instant capture from Shufti Pro. The service uses OCR to extract data from a user’s document in addition to verifying them. This reduces both the time and number of errors for e-commerce retailers.

 

Try Out Shufti Pro Identity Verification Services 

ID Verification

Age Verification – Must Have For Age Restricted Retailers

Mobile e-commerce makes up for nearly 29% of the entire e-commerce sales in the US. A majority of the millennial users – 86% – make online purchases through their smartphones. Such unrestricted access to products and services online, makes it harder for businesses dealing in age-restricted merchandise to regulate their services. Verifying customers’ age is difficult in person as it is. It reaches a whole different level of challenging for online purchases. In a day and age where a user can access goods online by simply providing genuine credit card details. Making sure the person using them is of the appropriate or legal age is part of the obligations online merchants have to fulfil. Thus, ID verification becomes crucial, particularly so for age-restricted vendors.

A study conducted in the US estimates that nearly 60 per cent of online businesses selling alcohol had negligible age checks in place. However, with the increasing legal obligations to verify customers before selling them goods, online retailers must take into account online age verification for users. Merely entering a date of birth or verifying customers through their social media profiles is no longer enough. Resourceful teenagers have found ways to fool such methods and gain access to amenities like online gaming and alcohol. Industries like pharmaceuticals, alcohol and tobacco industry have incredibly stringent regulations. Not verifying users under 18 can lead to heavy fines, legal ramifications and, most importantly, lead to reputational damage.

ID Verification for Age Restricted Commerce

Different regions around the world, including the UK, have now legislated age verification measures for businesses like gambling, alcohol, tobacco, online dating apps and adult content websites. Different states in the US are now also observing age regulation laws. This has created the need for an effective method for online retailers to verify their users accurately. Online identity verification services can be an adequate solution for verifying the age of their customers.

An age verification solution for online businesses authenticates its users through online ID document verification. The verification software authenticates the user’s age by scanning their date of birth from their ID document. Online merchants can further corroborate their customers’ identities by facial recognition scans.

E-merchants, dealing in age-restricted commerce, are fast realising the need for an effective online ID verification solution in order to prevent underage usage. Some businesses that fall under the bracket of age-restricted commerce and are in need of ID verification services;

  • Pharmaceuticals

Online pharmacies while being a convenience for patients, pose a major risk of being accessed by underage users with a drug habit. There are certain regulatory bodies that manage records of online pharmacies. However, this is not enough to urge them to verify the buyer’s age. Therefore, it becomes imperative for online pharmaceutical companies to make sure whether their customers are of legal age of purchasing prescription drugs. Online age checks can ensure safer business practices for online pharmacies and help them build trust with regional regulatory bodies.

  • Alcohol and Tobacco

Both alcohol and tobacco are stringently regulated globally. The Food and Drug Administration (FDA) in the US prohibited the sale of cigarettes to underage individuals. Similarly, the sale of alcohol is prohibited to anyone under 21 in the US and under 18 in the UK. These laws are as much applicable for online retailers as they are for physical vendors. Appropriate age and identity checks must be observed by online stores before delivering their products.

  • Online Gaming

Children, particularly adolescents, are attracted to online gaming. However, studies show that children are likely to develop problematic playing habits with excessive online gaming. This alone should be enough to convince gaming services to control access to their websites by implementing online age verification. In other instances, online gaming also involves online interaction with players from all over the world. Children can easily fall for a scam, offensive language and even bullying through such unfettered interactions. However, in a lot of countries, children are able to access gaming platforms with simply providing credit card details. Adequate verifying checks must be put in place, particularly for more aggressive or intense games.

  • Gambling

Online gambling has also garnered enough traction over the years. Studies have shown that over 50,000 children under the age of 17 have developed a gambling problem. This problem must be addressed by properly regulating online gambling services. While online betting might seem difficult to regulate, it is up to the platforms running these services to take measures to do so.

 

  • Weapons

With the amount of suggestive content available over the internet, anything nowadays can constitute as a weapon. It is extremely easy to influence children these days as they tend to have access to the internet and mobile devices at all times. Most of the responsibility falls on parental control, however, some of it must be taken up by businesses selling such merchandise ID Verification. This is especially important after the case emerged of a 16-year-old buying a knife off of Amazon and using it to stab a schoolboy. Weapons and firearms must, therefore, be put a stringent check on to regulate their usage.

  • Dating Services

Online dating apps and websites are amongst those online services that have extremely unfettered access. This is particularly disturbing in the light of multiple cases of underage assault have emerged over the years. Both the victims as well as the assailants are found using services like Tinder and Grindr. Governments and regulators are becoming increasingly concerned about such online services, and are pushing owners to implement adequate age checks. It is extremely crucial for online dating services to realise their responsibility in eliminating the disturbing and harmful effects of underage usage of online dating services.

  • Adult Content

The effects of regulation of adult content online can be seen through the enactment of the digital economy act in the UK, which shall be enforced later this year. It requires age verification of users before the distribution and access to adult content.

Age Verification through Online ID Verification

It is evident from the discussion above that access to online goods and services cannot be restricted by mere parental controls. Online businesses must share some of the responsibility in regulating their goods or services. While merchants are able to verify the age of their customers through IDs that are provided by them in person, online vendors find it particularly challenging to verify age online.

Fortunately enough, a SaaS KYC provider like Shufti Pro can offer foolproof age verification services for businesses. Remote verification can be made possible through online ID verification. Shufti Pro’s verification software allows businesses to verify their users through document verification and facial recognition online. Users can scan their ID document remotely through their smartphone or PC camera. The system looks for forged or tampered documents. Its OCR technology can extract data from documents instantly, thereby confirming the age of an individual through their DOB. The vendor can further ask the customer to perform a real-time facial recognition scan that corroborates the identity of the person with the photo provided in the ID. Shufti Pro is able to verify users within 30-60 seconds, allowing no hindrance to the purchase process of goods or services online.

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ID Verification

ID Verification Ensuring Safety Deals in Real Estate Sector

Buying and selling properties for people are major, thought-provoking decisions. It requires weeks, perhaps even months of search, planning and preparation. For people looking to make a solid and long term investment, it is even more important for a person to be more circumspect. The process of acquiring a property can be unbelievably long and tedious. More than anything, it is important to vet both the buyer and the seller in the process. Online ID verification is one process that makes this whole process easier and smoother for both the client as well as the agent.

Since the industry involves high-value transactions, there as an equally high chance of fraud, shady deals and other financial crimes involved. The signing of real estate deals requires signatures on different legal documents that clearly and properly ensure the transfer of ownership. One of the most legitimate concerns that surround real estate deals is money laundering. Financial regulators all around the world have doubled their efforts to curb terrorist financing and money laundering activities.

The Threat of Money Laundering

The real estate market has long been used to hide illicit money that has been gained through corruption, tax evasion, bribery or other similar means. Criminals end up hiding their money through shell corporations that are listed as owners of luxury properties, thereby effectively hiding money that is used further to fund terror cells. This ominous source of money laundering has prompted governments and regulators around the world to increase their scrutiny on the real estate sector as well.

In London alone, 36,342 properties were listed under offshore companies in 2015. World over, there are major luxury properties that are bought and managed by shell corporations. Other reports also indicate that more than £180 million of London’s properties were bought as a result of criminal proceedings. Other locations around the world including New York City, Florida, California and Canada are also attractive havens for money launderers to hide their money through high-value real estate deals. To combat the illicit bought up of high-value properties, certain regulatory authorities around the world are increasing regulations for real estate companies. These regulations around the world have prompted dealers and agents to verify and authenticate both parties in a real estate transaction before completing the sale.

However, it is not only the threat of money laundering that increases the risk of real estate transactions. Identity theft is another crime that is penetrating the real estate market. Fraudsters commit identity fraud by impersonating a property’s owner and by selling it to gain financial benefits for themselves. It, therefore, becomes the responsibility of a real estate agent or company to vet both the buyers as well as the seller before proceeding to sell a property.

Frauds and Scams in the Real Estate Sector

It is not just money laundering that has affected the real estate sector. An increasing number of scams and frauds are also becoming common in the industry. The victims of such frauds end up losing millions of dollars to such frauds and are often deprived of their life long savings. One of the ways to protect oneself from such scams is to be able to identify them effectively. Some useful ways to identify real estate scams involve;

  • Transactions that require money to be wired overseas and no possible way of contacting or meeting the person(s) receiving the money.
  • Sudden changes in address or other credentials, particularly contact details. Such details may not be received beforehand by the buyer.
  • Requests to transfer money to a different bank account(s) than the ones normally used by the client or selling party. One of the major giveaways may be that the account is offshore.
  • The buyer or seller suddenly starts using generic e-mail addresses instead of official ones.
  • The seller makes haste to sell the property giving reasons that cannot be corroborated.

All these and other simple yet obvious signs often point towards a shady deal, that should be investigated further. On suspicion of fraud, such deals must also be reported to the relevant authorities for them to take the appropriate action.

Scammers end up posing as owners of a property and selling it under the same pretence. The original owner of the property can remain oblivious for months as hardly many people check the status of their properties all too often.

Are Scams and Crimes Avoidable in the Real Estate Sector?

Frauds, scams and financial crimes that are associated with the real estate sector are entirely avoidable and preventable with certain precautions and preventive measures. Some of the few measures that can be taken to avoid scams include;

  1. Make sure when buying a property you are contacting the actual owner. Also, make sure to insist upon meeting the seller in person. If a meeting is unable to be arranged, at least try and speak to them via a video conference or a phone call. In certain cases, you may be dealing with a person who has a Power of Attorney to handle the property. In others, you may be dealing with an executor of the estate or a person who has a court order to execute a sale. In all cases, make sure you at least know who the buyer is.
  2. Real estate companies must make sure their employees and agents are well aware of common scams and frauds ( ID Verification ) that are prevalent in the real estate sector. They should take measures to educate employees of different techniques used by criminals and fraudsters to use properties to hide their money. Awareness lectures must be given to employees to make sure they know about typical phishing and social engineering scams.
  3. Another certain way to avoid real estate frauds is to verify both the parties in a real estate transaction. It is up to the real estate company to ensure that entities on both ends of a transaction are legitimate and have authentic credentials. People on either end of a transaction may be using forged or stolen details. It is therefore essential for real estate companies to use a reliable KYC (Know Your Customer) service that can effectively verify users’ identities.
  4. Real estate agents must also verify the authenticity of the property documents provided by the seller and make sure they are in order. All such documents must be checked to make sure there are no errors or misrepresentations. All documents must be in order and clearly legible.
  5. Special care must be taken if either of the two parties in the transaction is overseas. All deals that avoid face to face contact with the owner or other relevant parties must be avoided.
  6. Similar measures must be taken by mortgage providers to ensure the identities of property owners seeking loans. Tenants must also be verified before the leasing of properties.

The Need for Frictionless ID Verification Solutions in Real Estate

Real estate deals are drawn out and tedious as it is. In order to reduce friction in the entire process, businesses must make sure to make the procedure as simpler and faster as they can. Individually collecting and verifying all documents can be tiresome and unnecessarily lengthy. With the help of digitised user verification procedure, as provided by Shufti Pro, real estate companies can authenticate buyers and sellers instantly. The procedure involves ID verification of both parties through ID document verification. This enables them to ensure that they are using authentic credentials to make the sale or purchase.

A number of different documents can be used to verify the identity of a person including ID cards, driver’s licenses, passports or any other form of government-issued IDs. The real estate provider can choose to verify the buyer and seller with the document(s) they prefer and proceed to authenticate the sale accordingly.

Parties to a real estate deal can be further authenticated using biometric facial verification. Facial recognition online can be performed through a facial recognition software that has features like liveness detection and 3D mapping that makes it harder for scammers to spoof the system.

To counter fraud in the real estate sector the online identity verification service presents itself as the perfect solution. Shufti Pro’s ID verification software uses a hybrid technology of AI and Human Intelligence to verify users within 30-60 seconds. It uses OCR (Optical Character Recognition) technology to extract user data and processes it accurately. This decreases the chances of human error that comes with manual verification methods. The system can obtain client details from their documents to save them the trouble of entering them every time for a process.

ID verification services from Shufti Pro can be used by real estate providers in a number of ways including the processing of transactions, locating properties, detecting and preventing identity fraud, performing in-depth due diligence of customers and complying with regulatory measures. Shufti Pro is focused on providing top of the line online ID verification services to its clients. It caters to a wide clientele base including the real estate sector. Through its AI enabled ID verification service, it can verify users from over 230 countries. Its face recognition ID verification services allows businesses to authenticate their users beyond a doubt. Through its AML background screening, businesses can screen their customers through global AML sanction lists, that allows them to eliminate the risk of money laundering and other financial crimes.

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