Winners, losers and fraudsters – Identity verification for online gaming
Already rapidly growing sectors, digital gambling platforms and online gaming sites exploded in popularity during the height of the COVID pandemic, as many people stuck at home turned to these sites for entertainment. According to market research firm Statista, the global online gambling market alone is expected to total almost $93 billion by 2023, illustrating the strong growth this industry has experienced in recent years.
Yet, cyber criminals and organised fraudsters have also capitalised on the popularity of these platforms, which more than a billion people across the world use, and are continuously looking for vulnerabilities and weaknesses to exploit.
Valuable digital assets
As the real-world value of in-game items increases, hackers could gain thousands of pounds from each account that they compromise. Hacked accounts, too, can also be valuable to criminals, with high levelled accounts that possess expensive items being the most in-demand.
A popular massively multiplayer online role-playing game (MMORPG) called Runescape allegedly saw a rogue developer steal “wealth and items” that would cost around $100,000 to buy on third-party websites.
Like other businesses, online casinos and gaming websites are at risk of having to deal with widely used attacks, including account takeovers, fake account creation, Distributed Denial-of-Service (DDoS) attacks and cashing-out stolen accounts. Cryptocurrency gambling also creates new challenges for firms, as this unique form of payment will require a different set of protections and safeguards.
While some platforms do offer customers some level of security, often in the form of two-factor authentication, many firms in this sector are not fully prepared for the sophisticated threats they face in the near future.
Digital identity
Embracing digital identity verification solutions can enable gambling and gaming operators to quickly confirm the identity of users, without adding unneeded friction. The real benefit of advanced identity verification solutions in this space is the large number of factors the ID verification process takes into account.
For example, to reduce the risk of fraudulent account creation that can be used for illicit purposes, the personal details held on a ID copy could be checked against third-party sources and live selfies of the user. Both IP address and phone numbers can be utilised to double-check that the user is exactly who they say they are.
Burgeoning verification technologies, namely multi-layered risk decisioning and advanced behavioural analytics are increasingly playing a role in the defence against cyber criminals.
Legal requirements on gambling sites require stringent protections to be made against underage gambling and vulnerable players being able to spend more than they can afford. Digital identity can also be leveraged in this area so that these types of users can be identified and protected, whilst also helping secure the platform itself.
When these digital verification checks are in place, fraudulent actors will find it far more difficult to connect bank accounts that are stolen. Finding the right balance between offering a seamless customer experience and still maintaining very high levels of security is not an easy task, but gambling and gaming firms can achieve this goal through cutting-edge digital identity verification solutions.
____________________________________________________________________
Written by Finbarr Toesland, Editorial Contributor, VC Innovations
The conversation continues at the Future Identity Festival, co-located with the Fintech Talents Festival on November 15th & 16th 2022.