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iovation: Stopping fraud without degrading the experience for your ‘good’ players

As a provider of online fraud prevention and authentication solutions to eight of the top 10 gambling platform providers worldwide, iovation is well placed to combat the growth of fraud and abuse reports across the industry.

SBC News caught up with Angie White, the firm’s Product Marketing Manager, to discuss the key findings from its ‘2019 Gambling Industry Report’ and glean fresh insights into differentiation drivers for players throughout the rest of this year.

SBC: Was there a hypothesis you were trying to prove or disprove with the report?

AW: No, we really come at it from the perspective of trying to look at it objectively to see what insights we can pull out that will be valuable to our clients. This is the third year we’ve done the report, so it was just about looking at the data and what it’s telling us.

If you look at 2018, we processed 518 million gambling transactions and prevented 9.2 million that were fraudulent. It was interesting that we’re starting to see some longer-term trends.

It helps that we’ve done it in past years so we looked at last year’s report, pulled this year’s data and then compared it to see ‘are we still seeing the same type of growth?’

One of the top fraud factors for our gambling clients over the past three years – and something that continues to rise – is bonus abuse. It’s a really lucrative target for fraudsters, so it’s imperative that we work with our operators to help secure them against this.

SBC: What were the biggest ‘take aways’ from the report?

AW: I would say that number one is player experience, I can’t over emphasise how important that is. How can you reduce friction for players? On average, only 1 percent of your transactions are fraudulent, so if you get too focused on stopping fraud you can forget about creating a good experience for the 99 per cent that aren’t fraudulent. Our whole philosophy is, how can you stop fraud in a way that’s not going to degrade the experience for all your ‘good’ players.

Our major theme for ICE London is ‘Accelerate players, not fraudsters’. There’s two ways that the gambling industry can use our device intelligence which fits into the report theme that 1) we stop fraud (we have done so for 15 years) and 2) we can use the same technology to decrease the time to bet.

So, when someone sees an advert or a push notification you can use device authentication to skip elements of the login process (because you already know they’re a trusted player) and take them straight to your offer.

SBC: Do operators take an all-in-one package of iovation products, or do they have a choice over which individual components to adopt?

AW: We can implement these products at any risk point. With device-based authentication a player’s device is paired with their account so when they go to login the next time we just do that device check in the background looking for any kind of risk signals.

For example, if it’s the device that ‘Joe Smith’ logged in with before and we don’t see any risk signals, he can go through without ever realising that those types of checks were going on in the background. Conversely, if we see risk we can do a FraudForce check where we look to see are there any reputation reports associated with the device or with this account.

We have also seen a lot of our operators adopt our machine learning solution, SureScore, which does predictive insights based on our history of reputation reports, scoring the likelihood of a transaction point becoming fraudulent.

This is particularly beneficial for operators at account setup. There’s a lot of risk when taking on a new account, giving them a line of credit, letting them into the game. It can really speed up the process of onboarding a player and getting him into the game faster if you can see that the risk associated is low.

SBC: How important was the timing of such a report around safeguarding players, particularly as the industry faces a fight to restore the public’s trust?

AW: I think it’s very important, particularly on the self-exclusion side and how that works to counter the growth of problem gambling. We’ve been working with operators for a number of years now to help manage player self-exclusion.

The way that works in our system is that if a player self excludes with one of our customers, they submit a report which is associated with both the account and the device. We’re then able to say ‘oh well, this account has been accessed by these three different devices, and these three different devices have accessed these six accounts’.

We had 223,000 self-exclusion reports placed by operators in 2018, linked to 795,000 devices which means you have each of those reports were linked with three to four devices. And those were associated with 965,000 accounts, so you can see that you have players across multiple sites, using multiple devices associated with a self exclusion report.

We’re able to show those linkages so that you can more effectively shut down players to protect your business and the player. Something I found really interesting when we looked at the data was that we saw almost a million attempts by accounts associated with self-exclusion try to access one of our gambling operator sites.

That’s over four times the number of reports we saw, so we see that these people aren’t self excluding and leaving, they are actively trying to get back into the game. Talking to some of our operators, self exclusion is also a tool that fraudsters exploit. They come in, set up a fraudulent account, cash out, then before it can come back as a charge back they’ll self exclude because then it makes it harder for the operators to pursue them.

SBC: What key market drivers do you expect to shape the gambling industry in 2019?

AW: The three key market drivers identified by the report were ‘player experience as a market differentiator’, ‘convergence of fraud prevention and authentication’ and ‘managing regulatory uncertainty’.

With player experience, we’re definitely seeing a tremendous growth in mobile – in fact, we have for the last six years. We’ve seen our number of transactions go from 6 per cent in 2012 to 70 per cent in 2018, and that’s exclusively for our gambling operators. When we look at all of our subscribers, that number’s closer to 55 per cent, which tells you that mobile adoption is even faster in gambling than in some of the other sectors that we help protect.

That’s really the way players are going; they prefer to be on their phones and prefer to play through the mobile experience. I think the operators that are going to win in the market will look at that holistic player experience – how can they reduce friction, make the game safer and provide a better experience for the players. That is both for existing markets, and new markets, for example in the US.

New markets come with a slew of regulations, so for the US – where gambling is opening on a state by state basis – operators will have to consider how you meet regulations such as limiting play by geographic boundaries, and how to implement age verification, KYC and document verification in a way that won’t cause too much friction for customers.

The convergence of fraud prevention and authentication also plays into that whole player experience, right? Because you’re getting fraud not just at one point, you’re getting it when somebody is setting up a new account, when bonuses are being abused, at withdrawal etc. You’re seeing it throughout the whole life cycle.

And finally, in terms of regulatory uncertainty. In the UK, we saw tremendous appetite from regulators to levy huge fines in 2018. It was over 10 times the amount of fines from 2017 (£1.6 million to £18 million), so there has to be an increased importance on making sure you are compliant with regulations.

The full report will be available to collect for free from iovation’s stand at ICE London (N9-500).

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