Interactive FINANCIAL CRIME
Why a high-risk sector needs high- impact protection
Every business operating in today’s digital economy has to face risks related to fraud, cyber-attacks and other financial crime threats – but for online wagering or “iGaming” companies, these threats are multiplied exponentially.
Jonathan Bowman, Chief Technology Officer MiFinity Payments
Jonathan Bowman is the Chief Technical Officer of MiFinity Payments (formerly NXSystems). MiFinity’s digital wallet solution for the gaming industry offers players a seamless user experience and a broad variety of deposit and withdrawal options, while providing gaming companies with extensive global coverage – integrated with a vast network of financial institutions – as well as sophisticated authentication and fraud monitoring controls and comprehensive reporting. Click here to learn more.
How so? It’s like an equation: take all of the risk factors inherent to digital payments in any sector, then double them (since iGaming outfits operate in a two-sided transaction environment, money is constantly coming in and being paid out).
From there, add in the unique vulnerabilities of the wagering industry at large – including its inherent susceptibility to money laundering – and multiply it all by the creativity of tech-savvy financial criminals, drawn to an already high- risk, high-stakes sector. Te end calculation: an obvious hotbed for
fraud and security issues. iGaming companies are all too aware of the
issues they face, in part due to the additional business challenges that their unique vulnerabilities create. For example, banks and other financial institutions classify all companies in the wagering industry as “high- risk” – putting iGaming operators in an unenviable negotiating position when it comes to third-party processing fees and enterprise technology contracts. In addition, a recent report found that the online gaming industry was the
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247.COM
target of half of the recorded distributed denial- of-service (DDoS) attacks in the third quarter of 2015. Tis high level of cyberattacks is attributable, in part, to how crowded the iGaming market is becoming. Research from Kaspersky Labs found that one out of every two DDoS attacks in the online wagering space was launched or funded by a rival business. With so many operators in the iGaming space
competing for the same base of player- customers (and their money), it is not surprising that the attacks often come from the competition… and it is also no shock that these player-customers have their own financial crime tricks up their (digital) sleeves. Te most popular of these tricks exploits the
online wagering industry’s heavy reliance on credit card-enabled transactions. Criminals frequently attempt to use stolen card numbers on wagering sites, and consumers play that to their advantage by committing “friendly fraud.” Friendly fraud occurs when a consumer uses credit card information to wager, but later claims that the related charges from a gaming outfit were actually unauthorized. Te consumer simply lost money, but can “win” an undue chargeback by telling the credit card company that he or she did not sanction the payment. Incidents of friendly fraud are commonly
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