Know your player: tackling online gaming fraud [...]

The online gaming market is growing rapidly. And the boom is set to bring more fraud activity with it.

The online gaming market is growing rapidly. And the boom is only set to expand further. Not shy of impressive volumes, the $153 billion-worth industry is anticipated to bring over $74 billion in revenue by 2023.

Data pegs that by 2021, there would be over 2.7 billion gamers worldwide - that’s nearly 35% of the world population.

Online gaming has almost become a lifestyle, with the “on demand” experience becoming a part of our everyday lives. For the gaming industry, this is a way to build brand loyalty and over time, develop and build a sustainable market share.

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The key is to ensure that online operators are only allowing age verified players and complying with KYC requirements before signing up new users. This is to minimise the risk of underage players accessing restricted content online, as well as to keep fraudsters at bay. This is critical at a time when account takeover fraud is on the rise - resulting in losses of over $5.1 billion last year.

Solving the industry’s biggest challenge: Identity theft

Reports pitch identity theft as the biggest threat in online gaming fraud - be it cyber criminals using stolen identities to obtain bonuses, place fraudulent bets and open new accounts. It doesn’t just stop at identity theft - over the last couple of years, location spoofing is becoming a growing threat for the online gaming industry, rising over 257% every year.

“If we take a step back and look at what authentication and verification actually do, they tie transactions to a person’s electronic identity and, subsequently, to that individual and their device. This is a core concept as equally important in gaming as it is in any other industry,” says Doug Graham, Chief Security Officer at Lionbridge.

The digitalized global space that online gaming operates in sees a high volume of cross-border traffic that can be challenging for companies to meet geographic compliance requirements and other legal restrictions.

When coupled with location spoofing, it can prove to be a much bigger challenge as it enables the player to mask their actual location using location spoofing channels, making it increasingly hard to verify the true identity and location of the player. This flags the critical need to authenticate the identity and the location of the player to tackle online fraud.

How can online gaming operators prevent gamers from lending their accounts?

One of the bigger challenges the market faces is lending or selling gaming accounts to others who sometimes may not be registered users. Not only would this be a security threat, it would also hamper the business model for the company. One of the essential tools to counter this is using facial recognition for biometric authentication so that end users can verify their identity securely, without relying on passwords that can be stolen.

“In online gaming specifically, though, authentication and verification matter for licensing. Online games are licensed for a certain person to use on a certain device. These two core services ensure licenses aren’t duplicated or misused,” Graham tells us.

But here’s the bigger question: How can fraud prevention and regulations go hand in hand with a great gaming experience? This is where identity verification comes into play.

Security: Enhancing player experience:

How do you ensure that there is ample control on security while reassuring your players that you’re currently meeting AML, KYC and other regulations? It’s not just this - how do you verify the identity of your players without causing friction, or frustrating them?

Working on a winning user experience is not solely focused on meeting security and compliance objectives. They can work in tandem to provide a great gaming experience.

From opening an account to buying online gaming merchandise, clocking a gaming experience that’s fast, secure and seamless is important. It’s vital to keep your users engaged, interested and active.

With a large portion of revenues tied back to user retention and traffic, offering a great customer experience is pivotal to building your customer funnel - and that experience needs to be friction-free, intuitive, fast and easy.

“Another way authentication and verification affect the player is purchasing: In-game purchases need authentication in order to ensure the player actually performed the transaction. Most games are too secure to let hackers steal payment card information, but without authentication, hackers could rack up a hefty in-game purchase bill on your card,” he adds.

Game on: Why weak authentication leads to significant costs for businesses

Authentication ensures that only an authorized user can access a gamer’s identity.

“This benefits companies – sellers understandably want to make sure people aren’t playing paid games for free and the high intellectual property values of games make licensing even more important. Gamers also don’t want competitors hacking their licenses, pretending to be them in order to steal their game identity or to mess up gameplay or their personal reputations,” says Graham.

Players want (and need) to feel secure - here’s how to comply with regulations and make it work Several online gaming companies have made online identity verification mandatory in order to meet their Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. Enterprises are held accountable for loopholes in security protocols that disrupt fair and safe online marketplaces. The UK Gambling Commission, for instance, recently came out with a new set of regulations that the industry needs to follow.

In Germany, online game operators come under the identity verification regulatory umbrella which requires them to use selfies as biometric authentication for KYC and AML compliance. Regulations in Switzerland enable both video and automated verification when it comes to verifying age-restricted services such as online gaming.

Better yet, multiple game operators are now looking to leverage these services for fraud prevention and detection - eventually mitigating a significant amount of financial loss.

Fast and compliant processes for identity verification are today pitched as a security standard for any online business that seeks to maximise fraud detection, online security and age verification. Tapping into biometric authentication is an optimal solution to tackle this.

The first step towards rolling out the solution is to confirm the validity of the government-issued ID. Since the document on its own is not enough to confirm the true identity of the user, the user’s video selfie is needed to match the face on the ID document. This prevents threat actors from using spoofing attacks to beat the identity verification system by using an image or a video of another authorized person.

Gaming companies need to leverage biometric-based online identity verification - Here’s why.

The right user authentication or identity verification platform can be the real game changer for companies - it marries convenience, security and compliance. Gaming companies need to integrate online identity verification that’s backed by biometric technology. Passbase’s identity verification platform uses facial recognition technology and liveness detection to ensure that it is indeed a genuine person who’s trying to access and use the system.

Passbase offers ID verifaction for over 150 countries. Read more Passbase offers ID verifaction for over 150 countries. Read more

In place of complex legacy verification solutions, Passbase’s easy and seamless developer-friendly software can be integrated in a few minutes. After a user has performed identity verification once on the platform, they can take a video selfie to perform biometric authentication for future logins in seconds, while also ensuring that you are only allowing access to a the verified individual.

Better yet, the universal digital identity can be re-used in the future across other platforms as well, while giving the player more control over the data they share during authentication. The user can decide what data needs to be shared and who should have access to it. Interested? Get started today. Your first 50 verifications are on us. Try out Passbase now and your first 50 verifications are on us.

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Passbase is an identity verification solution that makes facial recognition, liveness detection, ID verification and KYC and AML compliance accessible through a suite of flexible developer tools. A zero-knowledge architecture ensures that companies using Passbase can securely verify users from over 190 countries without having to store their data. Built for developers, it can be integrated with just a few lines of code on iOS, Android, and Web.