The latest in Payment Expert’s Innovation series saw us sit down with Rebekah Jackson, Director of Gaming at GBG, as she discussed the challenges when it comes to a balanced approach in AML strategies.   

Payment Expert: Firstly, your panel in Barcelona will discuss the right balance between AML friction and a seamless user experience, how significant do you believe this challenge is for operators? 

Rebekah Jackson: In recent months, we have witnessed record-breaking fines for failures in AML and social responsibility in the gaming sector, both in the UK and in international markets. Regulatory bodies globally are cracking down on the industry, imposing harsh penalties against igaming firms that fail to correct deficiencies in their AML processes. Added to this, Operators are increasingly coming under pressure to fight rising levels of financial crime and fraud threats.

In November 2022, the European Commission raised the threat level for money laundering for online gambling to its highest possible rating and called for lower thresholds for due diligence check.  We are seeing this stance reflected here in the UK specifically too;  in its recent risk assessment in the UK the Gambling Commission now considers all remote gambling to be of high risk.  

The challenge is clear: robust AML measures, including friction, are key to prevent the flow of dirty money entering online casinos and gaming sites, while at the same time, the iGaming industry is fiercely competitive, and providing a smooth and seamless user experience is crucial for attracting and retaining customers. Achieving the right balance between is a requirement for the long-term success and compliance of iGaming operators.  

However, I believe we need to shift the narrative here. AML friction and good customer experience aren’t mutually exclusive. In fact, preventing money laundering activity and stopping fraud means letting more genuine customers in as well as keeping criminals out. 

At GBG, we firmly believe that compliance is an enabler of growth and can be a strategic differentiator in a dynamic and competitive market if implemented correctly. 

Of course, this requires a dynamic approach and constant product innovations. With over 30 years of compliance management experience, we collaborate with leading global gaming operators to ensure seamless player onboarding while maintaining robust AML solutions. Serving diverse clients in sportsbooks, poker, casinos, esports, platforms, and lottery, we enable them to manage risks effectively and optimise player sign-up rates.  

Our award-winning automated AML solutions utilise data analysis and machine learning to automate real-time risk assessment for new customers and transactions, identifying criminal threats and reducing false positives. Through comprehensive pattern recognition, our Transaction Monitoring solution swiftly detects money laundering activities, safeguarding businesses from potential losses and unmasking criminals.

PE: Why is it so crucial for operators to embrace new tech as regulatory frameworks change and the threat of fraud continues to evolve?

RJ: As iGaming markets open up, it’s likely that national regulators will implement more stringent rules on identity verification to protect customers and prevent fraud. As well as this, all regulatory frameworks governing the igaming industry are subject to constant change and updates. 

New regulations may introduce additional AML requirements, data privacy rules, responsible gambling guidelines, and more. By adopting new technology, operators can stay ahead of these changes and ensure compliance and player protection as well as avoiding penalties and reputational damage. 

Secondly, fraudsters are continually finding new ways to exploit vulnerabilities in online systems. 64% of firms report sustained or increasing levels in bonus abuse and fraud according to GBG’s Global State of Digital Identity 2023 report and 55% businesses reported they have suffered known fraud attacks in the past year. 

Embracing innovative technologies enables operators to enhance fraud detection and prevention capabilities. Real-time monitoring, machine learning algorithms, and behavioural analysis can help identify suspicious activities and stop fraudulent transactions before they occur.  

At GBG, we advocate for igaming firms to adopt a multi-layered data approach for player onboarding and fraud protection.  

By combining intelligent identity data, document checks, and email verification, businesses can gain comprehensive insights to build a robust defence against fraudsters. Our clients have witnessed significant reductions in bonus abuse fraud simply by adding an email intelligence layer during the onboarding process

PE: How vital is collaboration and a united approach from the payment industry and operators in terms of combating AML? 

RJ: Collaboration and a united approach between the payment industry and iGaming operators are vital when it comes to combating Money Laundering activity. AML is a complex issue that requires a coordinated effort from all stakeholders involved in financial transactions to effectively detect and prevent money laundering activities.  

Here’s why collaboration is essential: 

  1. Data sharing of transactional data and other relevant information can be analysed collectively, providing a more comprehensive view of potential AML risks and suspicious activities. By pooling resources and insights, both parties can better identify patterns and trends associated with money laundering. 
  2. Holistic risk assessment: A unified approach enables a more holistic risk assessment of customers and transactions. Payment processors may have access to broader financial data, while operators can provide behavioural insights from their platforms. Combining these perspectives helps in developing a more accurate risk profile for each user and transaction. 
  3. Real-time monitoring: A collaborative effort facilitates real-time monitoring of transactions and activities across the payment ecosystem and iGaming platforms. Prompt detection of suspicious behaviour is crucial in preventing money laundering and terrorist financing. 
  4. Enhanced due diligence: Collaboration enables enhanced due diligence on high-risk customers and transactions. By cross-referencing data from different sources, suspicious activities are more likely to be identified, leading to increased effectiveness in mitigating AML risks. 

By sharing data, resources, and best practices, all stakeholders can collectively strengthen their AML efforts and contribute to a more secure, transparent and responsible gaming environment. This collaborative approach is essential to staying ahead of the evolving tactics employed by money launderers and ensuring compliance with regulatory requirements.  

PE: In terms of the responsibility when it comes to the AML approach where does it fall:the payment firm or the operator?

RJ: From a regulatory perspective, the responsibility for the AMLapproach falls on both the payment firm and the operator, and they often share joint responsibility in combating money laundering. However, the extent of their responsibilities may vary depending on the regulatory framework of the specific jurisdiction and the nature of their business relationship. 

Overall in the fight against money laundering, it’s essential to recognise that AML compliance is a shared responsibility, and collaboration between payment firms and operators is critical. The two parties must work together to establish a strong AML framework that safeguards against money laundering risks effectively. 

Non-compliance by either the payment firm or the operator could result in legal and financial consequences, including regulatory penalties and damage to their reputation. Therefore, open communication, data sharing, and a commitment to AML compliance are essential components of a successful and effective AML approach. 

PE: Are operators aware of fraudsters using advanced technologies to commit attacks and how is this mitigated?

Yes, many igaming operators are very aware of the threat posed by fraudsters who exploit advanced technologies and are taking corresponding action to protect against this rising threat. 

To bolster fraud prevention during player onboarding and beyond, seamless data layering and transaction monitoring solutions are crucial: 

  • Integrating email intelligence during player onboarding enables operators to gauge the likelihood of email addresses being created for promotion abuse. 
  • Using mortality checks helps verify that customers are not utilising ‘dead accounts’ belonging to deceased family members to gain access to promotions. 
  • Adding mobile intelligence delivers real-time fraud signals, including sim swapping 
  • time stamp, porting, roaming, and call forwarding. 
  • Collaboration with global fraud consortiums can gain valuable insights into fraudsters identified across various industries.  
  • Utilise transaction monitoring solutions to analyse real-time data to detect suspicious activities, patterns, and anomalies.  

By staying informed about emerging fraud techniques and employing robust fraud prevention measures, igaming operators can significantly mitigate the risks posed by fraudsters using advanced technologies and protect both their business and their customers.

PE: Lastly, how important are discussions like the ones being had in Barcelona to combating fraud? 

RJ: Discussions and conferences like the ones being held in Barcelona are extremely important in combating fraud in the igaming industry. These forums provide a valuable platform for various stakeholders, including igaming operators, payment firms, regulators, cybersecurity experts, and law enforcement agencies, to come together and address the challenges posed by fraud.

By fostering knowledge sharing, collaboration, innovation, and raising awareness, these events contribute to a safer and more secure igaming ecosystem. The more the industry comes together to address the challenges posed by fraud, the better equipped it will be to protect its businesses, customers, and reputation. 

At this year’s event, we are excited to unveil GBG Trust, a groundbreaking fraud consortium with the one of the world’s largest data pools from gaming operators. GBG Trust is the only fraud network harnessing the collective insights from millions of gaming customer interactions, effectively flagging high-risk accounts within the gaming network and identifying recent bonus abuse scams.  

Payment Innovation TrueLayer