Customer onboarding can define the success or failure of any business, and online wagering businesses are no exception. Delivering a fantastic experience from the first click is critical to winning and keeping customers.
But for online wagering operators, there’s an added complexity: regulatory compliance.
According to Australian law, online gaming and gambling businesses must comply with strict Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.
Failure to comply can result in expensive penalties, loss of customer trust and damage to the brand reputation, not to mention opening the door to fraudsters.
So how do online wagering businesses strike a balance between regulatory compliance and providing a frictionless customer onboarding experience?
The battle for customers starts with onboarding
The Australian online wagering market is recording stellar growth.
The global online gambling market is projected to grow by US$150.5 billion until 2027, with Australia, India, Japan and South Korea estimated to be contributing a massive 39 per cent of the increase.
In this highly competitive environment, operators must create an exceptional experience from the first click to win customers and keep them.
Any friction in the onboarding process will lead to dropouts. Any extra forms, checks and processes add time, effort and frustration to the onboarding experience. A study commissioned by GBG found that 47% of consumers would abandon a brand after two negative digital interactions.
But the speed and ease of onboarding needs to be balanced with the requirement for stringent identity checks.
In Australia, every online wagering business is subject to the Anti-Money Laundering and Counter-Terrorist Financing Act 2006.
By law, online wagering sites must screen customers through a stringent identity verification process before letting them use their services. For businesses to verify their identity when opening and operating an online gaming or gambling account, customers are typically required to provide credentials, such as personally identifiable information (PII) and a government-issued identity document, such as a passport or driver’s licence, proving their name, age and residential address.
All this takes valuable time and effort, which eager players don’t have.
That’s not to say that online customers don’t expect some level of friction, but it tends to be relative to the service they are requesting. For example, consumers understand that setting up a new bank account requires certain levels of identity checks. However, they may not expect or understand the need for identity verification processes when using online wagering websites or apps.
This leaves the operator challenged to make the process as fast and transparent as possible, so customers don’t drop off before they’ve completed the process while also meeting their compliance obligations.
Stopping fraudsters in their tracks
While onboarding is the launching pad for a lasting customer relationship, it’s also the process most susceptible to fraud.
Malicious fraudsters are always finding new opportunities to scam consumers and exploit vulnerabilities in the online world. Criminals might go through an organisation’s systems to steal data or launder money or use a gaming platform to target players with social engineering, malware and phishing scams and use the stolen identity data for fraud. Some financial criminals reportedly use gaming platforms to recruit money mules – bank customers who agree to have the money paid into their accounts.
The growing use of cryptocurrency in online wagering also increases the risk of fraud and money laundering. Players increasingly use crypto to buy games or place bets, giving criminals another avenue to exploit platforms.
That’s why AML and KYC processes are critical. Having solutions in place that can accurately validate identities and authenticate identity documents at the onboarding stage is essential to stop fraudsters in their tracks and protect your business.
Stay a step ahead with player protection
While protecting against fraud, online gaming operators are under a social obligation to protect players and promote responsible gambling.
Better player protection will help operators build trust in the sector and create a safer gaming environment for players.
Pre-verification (also known as Zero Day Verification) will be a regulatory requirement in Australia from late 2023. This will require wagering companies to verify a customer’s identity within 24 hours, rather than the previous 72 hours. A customer can only place a bet and withdraw funds once their identity is verified.
The pre-verification process enhances protection for underage or individuals who have chosen to exclude themselves from betting through BetStop, the national self-exclusion register for online wagering launched in August 2023.
Strike a balance with automated identity verification
An automated identity proofing and compliance platform allows online wagering companies to quickly and accurately verify customer identities against trusted government data sources and global AML, PEP and sanction watchlists while ensuring customers enjoy a fast, frictionless onboarding experience.
With greenID, the automated identity verification platform by GBG, you can verify the customer’s name, address, date of birth and document credentials against the industry’s most extensive set of data sources, all from a single platform. This means you can convert and onboard more users with the confidence they will be “good” customers.
Find out more about GBG’s Identity Solutions to help you stay on top of your regulatory requirements whilst onboarding more genuine customers.