Know Your Customer (KYC)
What Is KYC, and Why Is It So Important?
The online gambling industry is about risks, but when it comes to the safety and dependability of personal information, there might be zero compromises. Know Your Customer is the procedure that presupposes the identity, address, and source of funds verification in order to guarantee the highest level of safety and data protection of the customers.
Due to the increasing number of gambling fans and experts, the number of financial crimes, identity thefts, and other frauds is increasing. Therefore, Know Your Customer has become an indispensable part of the due diligence that helps to prevent these cases.
What Can Trigger KYC Checks?
Although Know Your Customer is a standard procedure that is applied by the vast majority of casino players, it is indispensable to be aware of exceptional cases when the extra KYC test is applied. Thus, there are multiple factors that can potentially trigger KYC checks, especially when it comes to existing casino or sportsbook customers.
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Unusual gambling behavior
Every gambler has a typical gambling behavior that is detected by the system. If the account activity pattern is changed, an extra KYC review may be applied. Talking about unusual activities, most platforms presuppose high-risk betting behavior and other extremes.
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Reaching the defined withdrawal limit
When the players reach the pre-determined withdrawal limit, it can signal the casino to double-check the customer’s KYC and request extra verification.
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Changes in personal details or payment information
Any changes to the payment information or personal details can trigger the re-evaluation of the account and its dependability.
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Periodic audits conducted by casinos
The goal of the regular checks may be to ensure ongoing compliance with the gambling specifications.
The KYC Process Itself
The Know Your Customer is a comprehensive process that aims to prevent financial crimes. It consists of the following components and helps users to stay away from the risk of fraud or money laundering.
Customer Identification Program (CIP)
Verification of identity is a must-take part of the KYC procedure for those who are willing to undertake financial transactions. The collection of basic information about the person, including name, date of birth, and address, is required. Besides, it presupposes further verification of that information is needed.
Follow a few instructions on the Customer Identification Program that are typical for most online casinos.
- Verification process
- Required information
- Confidentiality
- Compliance
- Cooperation
Customer Due Diligence (CDD)
Customer due diligence is about running checks on the transactions in order to prevent potential risks for you and the gambling business.
Depending on the online casino you deal with and its specifications, different levels of CDD may be requested.
- Simplified. Due diligence is automatically performed on each new gambling account.
- Higher. This level of due diligence is applied when you reach the withdrawal threshold or pre-determined deposit level specified by the provider. At this point, your account will get locked up until you prove your identity and provide the requested documents.
- Enhanced due diligence is only applied to the dubious accounts that seem to be high-risk. There are numerous potential triggers of the enhanced CDD, including occupation, high stakes, and other factors. In such instances, you will be asked for extra information about the source of the funds.
Constant monitoring
As the name implies, it is a non-stop process of monitoring customer transactions. This way, financial institutions can identify any suspicious or unusual activities. Constant monitoring is fundamental for updating customer profiles and making sure the transactions comply with the knowledge of the business, customer, and risk profile.
The integrity of the financial system and its protection from unauthorized exploitation for illicit purposes are the end goals of these elements.
KYC Requirements
When it comes to the analysis of the Know Your Customer policy, the overwhelming majority of casinos mainly require government-issued documents that can help prove their identity. A driver’s license, passport, proof of address, national ID card, and a range of other options may be suitable for the process. Depending on the preferred payment method, the KYC specifications may vary a bit. Thus, when dealing with cryptocurrency transactions, less stringent identification procedures will be required.
KYC is the aspect critical for both the online casinos and the customers, as it can enhance the safety of the experience. Although it can cause extended withdrawal processing time, it is a one-time experience that needs to be repeated only in case of large withdrawals or significant chances.
- User identity verification. Verifying the identity is one of the most critical steps the online gamblers have to take during the KYC process. In most instances, it is about collecting and validating the identification documents issued by the government. The main goal of the undertaking is to prevent any kind of fraud and identity theft. Additionally, the aspect is fundamental, ensuring only eligible players can gamble.
- Source of funds verification. It is another stage of the KYC process, and it presupposes confirmation of the financial sources. Bank payslips or statements are enough to prove that the funds you deposit to the gambling service have been obtained legally.
- Address verification. Another vital aspect of the KYC is the address verification. Gamers should confirm their physical residence through documents of different types, including bank statements, rental agreements, utility bills, and others.
Is the KYC Process Really Safe?
Know Your Customer is a process that may feel tricky and intrusive for new players who are unaware of its specifications and advantages. In a nutshell, gamblers are asked different types of questions, including questions about their personal and financial data. Giving up that many individual details, every player will be concerned about potential data leakage and identity theft. There is a plethora of other downsides gamblers can think of.
Nonetheless, the overwhelming majority of time-tested and reputable casino platforms keep the safety of the players as a priority. They employ up-to-date encryption technologies safeguarding vulnerable data throughout the experience. In addition to SSL, HTTPS, and end-to-end encryption, some platforms also take advantage of the PCI-validated point-to-point encryption that guarantees maximum safety during the payment process.
