As the online gaming industry continues to expand, the importance of effective Know Your Customer (KYC) processes has never been more critical, offering strong opportunities for companies.
In an interview with AGB, Marvin Miao, Regional Sales Director for Jumio, highlighted the ongoing battle against fraudsters who are becoming increasingly sophisticated in their tactics.
“The challenge continues to persist,” Miao remarks. “It’s a constant battle between KYC providers like us and the fraudsters because they are getting more and more creative every day.”
Jumio, an online mobile payment and identity verification company that offers card and ID scanning and validation products for mobile and web transactions has processed over 1 billion transactions globally, and Miao points out a worrying trend: “The fraud cases are actually on the rise, especially with big fake frauds. There are so many software tools available that can easily create deep fakes to trick the system.”
This rise in fraudulent activities prompts Jumio to invest heavily in technology, with Miao stating, “We have filed more than 300 patents, especially in the area of deep fake attacks.”
The growing threat of fraud
Miao reveals that some gaming platform operators are already facing these challenges. “I’ve heard from them that they also face deep fake attacks,” he explains.
Fraudsters can create multiple accounts using different IDs and faces to exploit bonuses, leading to significant marketing losses. “It’s becoming quite a big challenge because it’s like a waste of marketing money,” he adds.
The issue is particularly prevalent in Southeast Asia, with countries like the Philippines, Indonesia, and Vietnam experiencing higher instances of fraud.
“Fraudsters do not only do it once; they tend to do it multiple times. That’s why we think KYC is no longer just about checking IDs at the start. It’s actually an ongoing process.”
The executive advocates for re-authenticating users whenever they attempt significant transactions, ensuring that security measures are consistently applied, and notes that regulatory changes in the region are beginning to address these challenges.
“At least for the Philippines, the regulators are giving a much clearer view of how you should do it,” he says. In the past, many companies struggled due to a lack of guidelines, but recent developments have clarified the minimum requirements for KYC compliance.
“Singapore is very advanced,” he comments, highlighting the country’s proactive regulatory environment.
With the rise of crypto wallets, the need for effective KYC measures has grown even more urgent. Miao explains, “The key challenge for businesses is ensuring that users are who they say they are. You don’t want to provide a service to a robot or an AI.”
Balancing security and user experience
As gaming platforms tighten their KYC protocols, there is a delicate balance to maintain. Miao acknowledges, “In the business of gaming, it’s all about trust. The platforms must trust their users are real people, and users must trust that the platforms are legitimate.”
He emphasizes that when platforms ask for identification and verification, it fosters trust among users. “If I feel like this is a legit platform, I can confidently put my funds in it,” he states.
However, excessive security measures can deter potential users. Miao argues that “the platform itself needs to be trustworthy to attract players.” He believes that investing in advanced technology is essential for keeping pace with fraudulent tactics. “Honestly, we’re not going to eliminate 100 percent of fraudsters. They are always the first to use new technologies to trick the system,” he admits.
The challenges of online identification and KYC in the gaming industry are significant, yet they are not insurmountable. With continuous investment in technology and a commitment to understanding fraud patterns, companies like Jumio are striving to stay one step ahead of fraudsters.
As Miao puts it, “what we can do is really to understand the patterns of recent frauds and develop our technologies to tackle the latest trends”, with maintaining trust and security remaining essential for the future of online gaming.
