As we progress into 2023, the world is becoming increasingly digital, and the gaming industry is no exception - let's talk RegTech.
With the acceleration of digital transformation, customers now expect an easier and faster onboarding process, while governments worldwide continue to implement and refine their regulations. In response to these evolving expectations and mandates, the Know Your Customer (KYC) process has undergone significant advancements, especially within the gaming sector.
Need For Speed & Due Diligence
One of the key developments in the KYC space is the increasing penetration of digital identity in day-to-day services. This trend extends to areas where users have traditionally enjoyed anonymity, such as gaming platforms. The shift from one-time face recognition checks to a more persistent mode of confirmed identity is gaining momentum, and this may impact the user experience on gaming platforms as well. As this transition occurs, the rise of Web 3.0 brings with it the promise of new digital identity verification solutions that allow for seamless and secure user identification.
Another interesting development in KYC is the broader adoption of document-free verification. This technology allows users to confirm their identities through a quick face authentication check, a process already implemented in several countries. It enables users to go through the verification process only once, with the data then stored in government databases. Subsequent verifications require simply providing ID numbers and going through a liveness check, which can greatly streamline the onboarding process for gaming platforms and other online services.
The concept of 'orchestration' in KYC processes is another trend to watch. It allows companies to adjust their KYC process to different types of customers based on factors such as jurisdiction and internal policies. This can provide a more personalised approach to user onboarding and is likely to shape the KYC process in the gaming industry in 2023.
Enhanced Player Authentication
As online gaming continues to thrive, so does the importance of robust player authentication. Togggle’s decentralised KYC can offer enhanced authentication systems that go beyond just username and password. Think biometrics and behavioural analytics. These next-level authentication methods can offer even greater security and assurance that players are who they say they are, which is particularly important in the high-stakes world of eSports and online gambling.
The Role of Artificial Intelligence (AI)
AI is not a newcomer to the gaming industry. From creating lifelike NPCs (non-playable characters) to developing unbeatable strategy algorithms, AI has been a prominent figure. But when AI meets regulations, that's when things get interesting. AI can help in monitoring and detecting fraudulent activities in real-time. Coupled with Togggle’s decentralised KYC, this can form an impregnable fortress around the player's data and the gaming ecosystem.
Anticipating an intersection of KYC and transaction monitoring, companies are increasingly looking to combine these two systems to boost efficiency. Transaction monitoring, aimed at detecting suspicious customer transactions, is essential in maintaining AML/CFT compliance and preventing fraud. The integration of these two systems can simplify the onboarding process for new users and ensure compliance with regulations, including the Travel Rule.
While these technological advancements hold much promise, it is essential to note the increasing sophistication of criminals who are continuously developing new ways to steal identities and commit fraud. This necessitates strong anti-fraud solutions that can detect advanced fraudulent signals and safeguard user data.
On the regulatory front, several significant developments are expected in 2023. The Ministry of Electronics and Information Technology (MEITY) in India is in the final stages of drafting rules to regulate online real money gaming. The new regulations are likely to introduce age verification mechanisms and KYC norms for real money games, alongside measures to prevent addiction.
Tax obligations related to online gaming are also set to change. The Finance Ministry is considering broadening the application of income tax laws governing online gaming so that even those who win less than Rs 10,000 may be included in the tax deducted at source (TDS) bracket.
In addition, the GST Council is expected to provide clarity on the taxation of online gaming, casinos, and racecourses in 2023. This follows the failure of the Group of Ministers to settle the issue of tax slabs and valuation aspects in 2022.
Future-proofing the Gaming Industry
As we witness the evolution of the gaming industry, it's clear that staying ahead requires embracing technology and adapting to the ever-changing regulatory landscape. Togggle stands at the forefront as an example of how innovative solutions can help the gaming industry not just comply but thrive amidst this sea of change.
With Togggle’s decentralised KYC technology, the gaming industry has an ally that understands the intricate balance between harnessing the power of technology and navigating the complex waters of global regulations. The Autumn of 2023 promises to be an exciting period as we keep our eyes peeled for further innovations and regulatory developments in the gaming space.
The challenges are many, but so are the opportunities. The partnership between gaming, technology, and regulatory compliance is not just essential – it is the future.
In closing, as players, developers, or stakeholders in the gaming industry, it's vital to understand and embrace the symbiotic relationship between technology and regulations. Togggle, with its pioneering decentralised KYC solution, is poised to be a critical player in securing a thriving, secure, and compliant future for the gaming world.