Time for the gambling sector to up its game.

April 2018 Kompli-Global

Jane Jee, money laundering expert and CEO of Kompli-Global, says “there is no longer any excuse for companies in the gaming sector and beyond not to do all they can to comply with AML legislation”.

A £6.2m fine was handed to William Hill by the UKGC for a “systemic senior management failure to protect consumers and prevent money laundering”. This reportedly resulted in 10 customers being allowed to deposit money linked to criminal activity. However, it is not the first such fine in the gambling sector, and unless action is taken now by bookmakers and others in the industry, it will certainly not be the last.

KNOWING YOUR CUSTOMERS

All companies, including those in the gambling sector, must comply with rigorous anti-money laundering (AML) and “Know Your Customer” (KYC) legislation.

A key part of the regulations is a requirement to regularly search for “adverse information” on new and existing customers. To do this, companies must trawl the so-called “Deep Web”, as well as traditional and digital news media, international corruption watch lists and other such databases, for any data that ties the individual with money laundering or links them with people accused of criminal activity.

In addition, companies must demonstrate that they have carried out these in-depth searches. This means keeping a detailed audit trail and provide regular reporting to regulatory bodies.

STUCK IN THE 20TH CENTURY

In spite of the scope of information that must be searched to meet legal requirements, many companies in the gaming sector are still in the 20th century of compliance, using outdated and inefficient manual KYC processes. In doing so, they risk missing key information about their customers, leaving them highly vulnerable to failures in compliance. The result of this is censure from regulators, which can have a significant financial impact on their business operations.

Understandably, keeping up with changing regulatory requirements poses a resourcing challenge to many gaming companies. Performing the necessary due diligence on all of the individuals and organisations it does business with is an onerous task for any organisation. Nevertheless, we are now in the 21st century and the technology is already available to support gaming companies in carrying out KYC checks quickly, and accurately. Regulatory technology (RegTech) that incorporates artificial intelligence (AI) is capable of doing the heavy lifting in searching for information on customers and can be a vital tool help gaming companies meet legislative requirements and red the risk of being fined.

For example, our kompli-IQ platform is able to carry out comprehensive adverse information searches on behalf of human compliance managers quickly and efficiently. They can automatically apply filters and rank sources according to reliability in order to minimise the risk of false positives. Technology can operate 24 hours a day, seven days a week, 365 days a year, and can alert compliance managers the instant any adverse information is found, so they can respond quickly and effectively to protect their customers and their business.

TIME TO FACE UP TO THE ISSUE

With such innovative, scalable technology, there is no longer any excuse for companies in the gaming sector and beyond not to do all they can to comply with AML legislation. If they don’t want to be penalised by UKGC or any other regulator, gaming companies need to step up and improve their customer due diligence processes.

Companies in the gaming sector have embraced digital technologies in their customer-facing operations; unless they do the same with their compliance processes, they will continue to take a gamble with their profits and their reputations too.