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GMB: What are the biggest challenges faced by iGaming operators in terms of identity verification and fraud prevention, and how does Sumsub address them?
Kris Galloway: In the world of iGaming, operators face the dual challenge of ensuring robust verification practices while mitigating fraud risks. Fraudsters resort to sophisticated tactics, which in the Brazilian market often consist of using third-party identity documents to create fraud syndicates, such as bonus abuse. At Sumsub, we tackle these challenges directly with advanced technologies, such as machine learning and facial recognition.
Our solutions are designed not only to quickly verify identities but also to detect anomalies and prevent fraudulent activities effectively, ensuring that operators can maintain compliance and offer a safe environment for their users.
Another major challenge for iGaming operators is maintaining high player onboarding rates. If authentication procedures are too complex, users may lose interest and abandon the platform without any activity. To keep them engaged, identity checks must be smooth and fast, supported by a user-friendly interface to provide the best experience.
Sumsub cares about the UX and ensures a hassle-free flow of all checks and anti-fraud controls to maintain high approval rates and retain honest players while thwarting fraudsters. To give you more specific numbers, Sumsub provides user onboarding in an average of 30 seconds, with an average approval rate of 93.2% in Brazil, and also ensures a reduction of more than 75% in duplicate accounts, preventing iGaming platforms from losing money to fraudsters.
What are Sumsub's main products for LatAm and Brazil?
In Brazil and across Latin America, Sumsub is best known for its innovative Know Your Customer (KYC) product, allowing for the best possible user experience. But, as a global B2B provider, Sumsub offers its clients a unique authentication platform that ensures user verification, company verification, transaction monitoring, and fraud prevention in a single dashboard. For Brazil, I can highlight document-free verification (when the end user only enters the CPF number without scanning any documents) and liveness checks (facial biometric verifications to ensure a genuine person is present) among the key products. Other highly sought-after features include proof of address, age verification, and user risk profiling.
In Latin America, where the regulatory landscape is diverse and constantly evolving, our product suite is tailored to meet these unique market needs. Particularly in Brazil, where identity fraud is prevalent, Sumsub's fraud network detection and sophisticated betting pattern analysis tools, including but not limited to reverse betting and arbitrage detection, bot identification, minimal risk betting recognition, and XP farming, play a crucial role in identifying and mitigating fraud schemes.
As regulations slowly solidify in Brazil, we aim to keep KYC and Responsible Gaming compliance processes as streamlined as possible, ensuring compliance without sacrificing the user experience.
In Latin America as a whole, Sumsub's comprehensive identity verification and fraud prevention solutions continue to be most needed by companies in the fintech, crypto, mobility, and iGaming sectors. Still, the main products are customized according to the specificities of each industry and country, and companies within certain jurisdictions can tailor the verification flow and AML controls according to their unique compliance requirements.
What technologies does Sumsub use to ensure the security and compliance of user data in the iGaming sector?
To ensure the security of personal data and compliance for clients, our company conducts external tests and regularly updates compliance certifications with the world's most stringent data security and privacy standards.
One of the main advantages we offer our clients is the convenience of a full-cycle platform that covers all verifications for different stages of the user journey. When relying on multiple providers, there is a higher likelihood of personal data breaches during data transfer between providers.
Sumsub uses advanced and proprietary AI-driven technologies to ensure data security and prevent manipulations. The company conducts research in the iGaming sector based on its verification data and, in May, released the 2024 iGaming Fraud Report, which presents updated numbers on false identity cases and industry forecasts.
According to the report, the most common fraudulent schemes in the industry include bonus abuse, affiliate fraud, illegitimate chargebacks, money laundering, and account takeovers. To ensure the safety of its clients and users, Sumsub regularly develops and updates solutions and features to prevent these fraudulent activities.
How does the company facilitate the regulatory compliance process for iGaming operators?
Sumsub simplifies the process with comprehensive compliance solutions that are constantly refined according to changes in national (and regional) legislation. This is made possible by our internal team that monitors changes in the regulatory landscape. As a result, it automates the compliance workflow for clients so they can focus on their core business without worrying about regulatory violations.
To give you more details: for iGaming operators, the main legal requirements are Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) regulations, which can be met through the implementation of a strong and robust KYC solution, as well as betting pattern analysis solutions that identify strategic money laundering techniques in accounts where account takeover may have occurred.
What specific benefits can iGaming operators obtain by choosing Sumsub as their identity verification and KYC partner?
With Sumsub, clients gain enhanced security, reduced fraud, and streamlined operations. Our solutions are designed to integrate seamlessly with existing systems, providing a frictionless onboarding experience that does not compromise thoroughness or compliance.
I can affirm that over 150 iGaming operators globally use Sumsub and are satisfied with our product. The Total Economic Impact™ (TEI) study conducted by Forrester Consulting concluded that companies partnering with Sumsub can enjoy an ROI of 240%. Our verification solution has global coverage with high approval rates in various countries, ultimately bringing more revenue to our clients.
Additionally, our extensive experience working with some of the largest operators in emerging markets within the industry uniquely positions us to tackle complex challenges related to adhering to new regulations, particularly in diverse and expansive markets like Brazil. Sumsub's deep insights into these challenges enable us to provide tailored solutions that not only ensure compliance but also maintain operational efficiency and market competitiveness.
What emerging trends in the iGaming sector is Sumsub observing and how is the company preparing for these changes?
When talking about regulation, one of the prominent trends in the iGaming industry is Responsible Gaming (RG). In Brazil, it's still unclear what the final requirements will be, but what is 100% clear to me is that Sumsub will be able to cover them all. Unlike many KYC providers, we go beyond existing requirements and already offer a full compliance suite, including the RG module.
In other words, Sumsub fully supports compliance with Responsible Gaming through the capabilities of its product.
Based on our internal transaction monitoring system and our global compliance experience, we offer a set of rules for automated RG controls. This includes flexible KYC workflow configuration, analysis of betting patterns and monitoring of player behavior, alerts for suspicious activities, as well as checks for potential gambling addictions. These rules are designed to help iGaming operations detect deposits disproportionate to the player's income, verify session time, frequency, and duration, trigger an alert if a player removes their limits or engages in loss chasing, and much more.
When it comes to the industry itself, another major trend is the emergence of the next-generation casino, also referred to as neo-casinos. These operators leverage generational trends, such as the fact that video games have become the second most popular activity among users aged 18 to 26, and as such, these platforms offer an experience that fits perfectly into that niche. Experience Points (XP) replace loyalty programs, loot boxes become new retention features, challenges provide exciting incentives, and player versus player duels increase engagement along with a variety of new games that offer excitement beyond the typical offering of slots, table games, and live casino.
In turn, this presents a myriad of new challenges regarding compliance and fraud prevention. Users have become accustomed to increasingly smooth onboarding processes, and the emergence of XP and player versus player casino games opens up a world of new opportunities for fraudsters, from XP farming, reverse betting, money laundering, bonus abuse, and much more.
Sumsub is ahead of the curve with this. We have the experience and expertise in iGaming internally across all sectors and types of casinos, and we are ready for the next move by fraudsters.
How does Sumsub differentiate itself from other companies in the market in terms of its approach to iGaming and compliance services?
Simply put, Sumsub offers a unique and fully customizable solution for all verification needs. For the iGaming industry, we stand out by providing a holistic approach to user onboarding, compliance, and anti-fraud measures. Unlike standardized solutions, we provide customizable, scalable, and user-centered verification services that adapt to the specific needs of the market and ever-changing regulatory demands.
Our proactive stance on proprietary technology and innovation allows us to offer superior protection and services, making Sumsub a preferred partner in the iGaming industry. In addition to the Responsible Gaming compliance suite we offer, our solution is capable of deterring all specific in-game frauds in real-time. For instance, Sumsub's AI technology pattern recognition prevents bonus and promotion abuse and potential losses by automatically detecting signs of fraud.
User multifactor authentication and continuous behavior analysis protect players from account takeovers. Moreover, we are currently adding a new feature – affiliate fraud prevention – to help iGaming providers identify non-genuine users who have no intention of playing and effectively combat irrelevant or fraudulent user traffic.
What are Sumsub's most notable success stories in the iGaming sector and how have these partnerships benefited their clients?
In the iGaming sector, Sumsub has established long-term collaborations with many providers in various regions. For example, Kaizen Gaming (one of the fastest-growing international gaming technology companies operating in Brazil under the Betano brand) moved from manual checking to Sumsub's automated solution, reducing the average onboarding time to 1 minute and 39 seconds and increasing overall performance by 350%, while eliminating fraud. In Brazil, the most demanding country in terms of verification, the partnership results were impressive. In several months, checks increased fivefold.
Another success story happened with Affyn, which is building a blockchain-powered multiverse of interoperable games and metaverses in Singapore. After integrating with Sumsub, Affyn saw a remarkable improvement in the approval rate, reaching 83.6%. The average verification time is now 57 seconds.
Another noteworthy client case: Sumsub provides Document-Free Verification for 10bet, a leading global sports betting and gaming operator. This solution allows 10bet to instantly verify bettors in Brazil without needing to scan documents. All they need to do is provide their CPF number and pass a quick liveness check.
This ultra-fast and document-free authentication process is made possible by Sumsub's direct access to government databases in Brazil, containing citizens' full names, dates of birth, addresses, photos, and other details. All data is verified automatically, and the person does not need to upload any documents. As all Brazilian citizens know their CPF number by heart, Document-Free Verification is easy and familiar to players.
In these cases, as well as with other iGaming companies working with Sumsub, end-users enjoy a fast, intuitive, and smooth onboarding experience that does not interfere with their gameplay. Thanks to multi-layered player account protection, users can feel secure about their funds at all times.
Source: Exclusive GMB