When you hear about “Digital identity” or KYC, you in all probability are thinking about banks and loans. KYC is something that you hear from banks or loan agents all the time and well, we do talk about these a lot!
Here is the thing, though we might not usually have heard about KYC with respect to any other industry. It has extensively being used in insurance, recruitment, software, and gaming.
Think about it, which business wouldn’t want to
- Know who they are dealing with i.e. their customers
- Save money
My guess, none.
FRAUD is not limited to Banks
My running theory is if there is a financial transaction taking place, there is a possibility of identity theft and fraud there than anywhere else. Think about the Flipkart fraud, where an employee ordered products on COD, received it and then sent a “did not receive request” to get a replacement or the more harmless discount frauds where consumers used multiple mobile numbers to get the same discount coupon twice.
More recently, when consumers used Quikr’s free delivery service to move their belongings to one place to another.
Fraud is not just limited to banks, and doesn’t need to be as complex and exciting as Leonardo DiCaprio’s character in “Catch me if you can”.
No, he is not!
Identity theft is everywhere, though in most cases it doesn’t make the headline it is a serious problem. With access to tools and services on the web, it has become much easier for fraudsters to target businesses and individuals, with gaming, social media, BFSI being adversely affected due to actions of a few.
The Gaming Industry
made $138 billion in the year 2018, in revenue. That’s a 10% y-o-y growth from 2017 numbers, and experts predict this to continue for 2019 too.
Mobile-based games raked in more than $63 billion in revenue and with more than 2.3 billion active users the industry is big as Facebook. One of the most exciting things about this industry is the amount of money that changes hands from the game developers to the players and vice versa. Gamers play in tournaments and contests arranged by companies that helps them win prize money and games like fantasy football and cards allow users to bet their money to win against the odds.
Some of the more experienced players earn anything between $2 million to $4 million in earnings from prize money, sponsorship deals, and paid content subscriptions among others.
Here is where the fraud takes place,
Identity theft in the Gaming Industry
If you have had the chance to play or see someone play some of these games online, you would notice a majority of large games allow users to purchase and earn from various events and competitions within the game. Depending on how much money is at stake the amount of fraudulent accounts also increases, some companies we spoke to saw the same user creates up to 50 accounts to claim a reward meant for individual unique users.
Some of the larger hacker groups have been know to take over more than 70,000 accounts on various gaming platforms every month. Leading to huge loses to user and company revenue.
Over the years multitude of gaming companies have launched games that allow users to purchase and earn cash while playing and competing tasks with the environment; leading to the problem of payouts.
And the government ascertain and tax this earning requires these companies to know who they make the payment towards. That was the first hurdle.
Remember the fraud we spoke of at the beginning of this section?
Gaming companies saw that a single-player create using multiple email ids and phone numbers in order to get the same payout multiple times, though it did increase the number of active users during the period. It did loss of 100s of 1000s of dollars in lost, no return payouts.
here is where KYC comes into the picture.
What does digital KYC do for gaming companies?
Video-based or digital KYC (like the one we have) allows gaming companies (in this case you) to collect and verify the ID documents submitted by the customer instantly and at the point of sale. Plus these are compliant with the latest regulations making sure that you are covered as far as the laws of the land go.
As a game development company, rewards and competitions make sure that your users are engaged with you and your product. Though this is also a major acquisition channel for the company, it puts heavy pressure on the company coffers. This makes it essential that we make sure that the rewards offered are used in the way they were expected too.
How do you do that?
As is the case of BFSI, sector the easiest way to avoid fraud is to know who you are dealing with or KYC, in gaming where rewards and hard cash come into play it makes sense that you know your customer (KYC) too.
This not only allows you to make a complete profile of your users, something that you can use to design your campaigns and reward programs but also makes sure that no individual misuses what you offer.