Customer Due Diligence in Gaming – Ensuring Smooth Player Experience

Customer Due Diligence in Gaming

Several online players across the world have an interest in contemporary gaming platforms and methods. The use of digital techniques has both benefits and drawbacks. Due to security breaches, fraudsters can penetrate digital platforms. For instance, issues with the payment options. They can be used by hackers to obtain cash compensation for their criminal purposes. The international watchdogs are concerned about this and want to tighten the laws while also highlighting the social obligations of the gaming service providers. The market value of the video gaming industry in the United States is $95.45 billion. Customer due diligence in the gaming sector helps defend it from outside cyberattacks. 

Customer Due Diligence in Gaming and Financial Crime Patterns

The gaming industry will flourish in various ways as innovative technologies arise. Hackers will exploit the shortcomings in digital platforms to take advantage of them. As a result, global regulatory bodies, casino operators, and individual players have significant concerns about gaming security. 

Money laundering cases and other financial crimes can result from a number of different factors. For instance, virtual onboarding processes, expensive in-game items with real-world value, and other unique artifacts (such as healing items). 

Micro-transactions – Customer Due Diligence in Gaming

A few players also use cryptocurrency, or digital currencies, to transact in the games. Free-to-play games allow them to participate in micro-transactions. Such transactions are, for instance, permitted in games like Entropia Universe. Players can trade chips and loot boxes with some companies that have gambling-style exchanges. To ensure that only the customers can view the content, they even use encryption. Customer Due diligence in gaming will demand necessary customer data to mitigate the risks.

The Corporate Social Responsibility of Payment Service Providers

Previously, they were using forged IDs with a debit card automation system. They subsequently sell them on third-party websites. Companies that handle payments can be vital to detecting suspicious activities in such situations. By comparing the information of players, even online gaming service providers can work with them to identify suspicious profiles. They could report them to international law enforcement, who would then handle the legal process. 

Customer Due Diligence in Gaming and AML/CFT Compliance

Companies that provide online gaming services are supposed to address financial crimes that take place on their systems or networks. The laws now have stricter requirements than before because of the international regulatory bodies. It’s critical to quickly and effectively secure gaming platforms. Additionally, online gaming service providers are using AML/CFT guidelines to monitor digital financial transactions. This was an announcement by FATF in October 2018. Companies must verify gamers’ identities, keep an eye on their behavior, and report any suspicious activity in accordance with the law. This is where customer due diligence in gaming will actually be put to use.

Why is there a deficit in the Central Bank of Philippines for Customer Due Diligence in Gaming?

Incidents of money laundering and identity theft are increasing at an exponential rate. Financial crimes are a risk across the board in the gaming industry, according to the Central Bank of the Philippines. They claim that the risk is significant because the internet gaming sector is still not sufficiently under control. These flaws are easily abused by criminals to carry out their nefarious schemes.

The bank claimed that while not establishing compliance yet, online gaming platforms are well-liked by the general population. The use of token transactions by gaming platforms, which are not yet subject to KYC regulations, gives them some leeway. 

In a Nutshell

Last but not least, it is crucial that players everywhere in the world adhere to the identity verification process. Additionally, customer due diligence in gaming can help to lower financial crimes. Cyberattacks can harm the market reputation and economic growth, among other negative effects. However, cutting-edge digital innovations like AI integrate with customer due diligence processes and AML gaming monitoring systems with ease. 

This is a significant step in the fight against the increasing incidents of identity theft, money laundering, and financing of terrorism. Advanced elements of artificial intelligence implementation can monitor player activity, identify recurring fraudsters, and prevent users of malicious accounts. The use of customer due diligence in gaming will also help in this regard in resolving all difficulties successfully. 


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