KOMPLI-GLOBAL
Know your customer
Kompli-Global’s CEO, Jane Jee, explains how to avoid gambling away profits through AML flaws.
P
addy Power Betfair has been fined £2.2m by the UK Gambling Commission (UKGC) for failing to protect customers who showed signs of problem gambling. It has also reportedly failed to stop stolen money from being gambled.
The UKGC claims that Paddy Power “failed to adequately
interact with customers who were displaying signs of problem gambling and failed to adequately carry out anti-money laundering checks” as part of its requirements under anti-money laundering regulation. Unfortunately, you won’t need a particularly powerful memory to recall the last time that a bookmaker was penalised in the UK. Now is the time to act, or Paddy Power certainly won’t be the last.
Searching for negative news
All businesses, including gaming companies, must comply with rigorous anti-money laundering (AML) and “Know Your Customer” (KYC) legislation in order to operate. These regulations require operators to conduct searches for “adverse information” or “negative news” on both new and existing customers. This level of due diligence needs to happen not only at the point of application for a new account but on a regular and frequent basis. This means that companies must trawl the World Wide Web as well as digital and traditional news media, international corruption watchlists and other such databases, for any information that ties an individual with money laundering or links them with people accused of criminal activity. Companies must also be able to demonstrate, with
evidence, that they have carried out these in-depth searches, requiring a detailed audit trail and regular reporting to regulatory bodies.
Behind the times
Despite these strict requirements, many regulated entities – particularly in the gaming sector – still depend largely on outdated manual searches using traditional search engines such as Google for this mandatory due diligence. Traditional ‘surface web’ search engines only skim around 4% of indexable content contained on the WWW. Therefore missing > 90% of the story. Manual processes are not only very time consuming, they
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are labour intensive and ineffective. Vital information is often missed and as a result, the gaming industry leaves gaps open that money launderers – and problem gamblers – are able to exploit. Failing to tackle these gaps leaves gaming operators at risk of significant financial penalties, just like Paddy Power Betfair.
The right tools for the job
Performing KYC checks on every customer may be an onerous task but the technology is already available to support gaming companies in meeting their due diligence requirements, efficiently and accurately. Advanced regulatory technology (RegTech) incorporating innovative Machine Learning (ML) and Natural Language Processing (NLP) technology is designed expressly to help companies to optimize and automate AML processes. Kompli-Global’s Saas search and screening platform, kompli-IQ, for example, does the heavy lifting and automates the search for compliance managers. It searches deeper, in more directories, in more countries and more languages, scoring and highlighting high risk
information that helps businesses like Paddy Power Betfair make the right decisions. Performing multiple KYC checks simultaneously and capable of searching 24 hours a day, seven days a week, technology can flag any adverse media to compliance managers without delay. This kind of RegTech can go a long way towards helping gaming companies ensure easy onboarding and an enjoyable user experience for customers, while also ensuring they are doing their bit to tackle financial crime.
Time to stop gambling with your profits Gaming operators have driven their business growth via digital channels. They have no excuse for not using digital solutions to meet their legal requirements. There is no ambiguity when it comes to money laundering
and problem gambling, and the technology is there to help operators comply. It’s time for everyone in the gambling industry in the UK and abroad to step up and reinforce their due diligence. It’s time to stop playing games with profits and reputations.
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