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Home In-depth Sumsub's Tony Petrov: We fight fraud while achieving the highest conversion rates for businesses

Sumsub's Tony Petrov: We fight fraud while achieving the highest conversion rates for businesses

INTERVIEWS 30 Aug 2022
7 min. read

Toni Petrov, Sumsub's chief legal officer.

Sumsub is a leading compliance and verification company with truly global coverage, serving customers and partners across a number of industries including, fintech, trading, crypto, and online gaming & gambling.

Today, we speak with Sumsub’sChief Legal Officer, Tony Petrov,to find out more about compliance and the challenges that lie ahead, particularly for iGaming and the wider online gambling industry.

Q: Can you introduce Sumsub to our readers, the scope of your work and how important it is for consumers and businesses in iGaming and beyond?

Sumsub is an international tech company providing an all-in-one verification platform for detecting fraud and ensuring compliance with KYC requirements worldwide, including identity verification, AML screening and ongoing monitoring. With expertise in more than 220 countries and territories, Sumsub is a proven leader in global compliance. We help regulated businesses, including gaming and trading platforms, easily scale to international markets by delivering end-to-end identity orchestration solutions. We also provide tailored services for our customers depending on their market. For instance, in the US, we allow clients to run SSN checks, enabling background checks that can immediately spot customer red flags, including bankruptcies, liens, criminal records, etc.

Fast and secure onboarding is especially important for iGaming businesses, as it’s vital to reduce drop-offs and convert leads that come at a significant player acquisition cost. Our proprietary, AI-driven anti-fraud tools make user onboarding fast, seamless, and secure, while our customised approach leads to higher pass rates globally. Sumsub achieves the highest conversion rates in the industry—91.64% in the US, 92.81% in Australia, and 98.04% in Latvia—while verifying users in less than 50 seconds on average.

Another advantage of our system is that clients are only charged for successful user checks, unlike many other verification providers. With over 2,000 clients across fintech, crypto, trading and gaming, Sumsub is trusted by industry leaders as Rivalry, Copybet, Kaizen Gaming, Binance, Mercuryo, Bybit, Huobi, Moonpay, Poppy and Transfergo.

Q: Drawing from your experience as a compliance specialist, can you point out the main challenges that gambling companies face when attempting to verify identities that you have observed?

Naturally, any gambling company would prefer to weed out unscrupulous players at the registration stage. However, the larger a platform is, the more resilient it normally is to fraud. The real challenge, meanwhile, remains how to minimise onboarding costs and keep conversion rates as high as possible. This is also where the most efficient KYC practices may come into conflict with AML obligations and other regulatory requirements. For instance, when is it really necessary to fully verify a user’s identity—when they open their account, place their first bet or try to make a withdrawal? Is non-documentary evidence, such as the customer’s location, acceptable as proof of address? Do users need to submit any additional information regarding their financial situation? Depending on the jurisdictions where the gambling platform is incorporated and/or operates, the answers to all of these questions may be different. So it becomes a task for the compliance team to find a way to justify the least burdensome procedures possible.

Q: We live in a dynamic time of KYC and AML regulation, particularly in the gambling industry. New rules have been put forward in several jurisdictions just over the past few years, and more may be coming in one of Europe’s biggest markets before long. What is your opinion for the current best practices in KYC/AML regulation and how do you think they can be improved upon?

While there’s a trend towards KYC automation,progress is still somewhat slow. The reason is that a lot of local regulators are still not convinced whether fully automated solutions can match face-to-face identity verification in terms of security and accuracy, especially if these solutions don’t rely on government-managed data sources. As a result, some gambling providers are still limited in their choice of KYC options, having to implement manual checks or even time-consuming procedures like video conferences. Another issue is that regulations related to the concept of "responsible gambling" will almost certainly become more widespread, which has implications for KYC as well. For instance, operators need to decide what data might help them detect risk-exposed customers. They will require convenient tools to collect data or even to deduce risk triggers from the data they already have with the use of some new AI-based behaviour analysis solutions. However, their customers may claim that some of these solutions will constitute an inappropriate intervention in their privacy rights. In these circumstances, it’s important for the industry to stay in touch with decision-making bodies, demonstrating that their KYC practices meet their designated purpose, even if they do not always follow the regulatory guidance to the letter.

Q: Companies worry that more demanding compliance standards may not ensure a high-conversion verification flow. How do you convince iGaming businesses to embark on more ambitious compliance initiatives?

We offer companies verification checks that can be easily allocated throughout the player lifecycle, meaning that they can be inserted at the right time without creating unnecessary hurdles in the onboarding process. For example, bank card verification and biometric checks ( called Liveness) can be asked after onboarding, at the first deposit stage or the transaction/withdrawal stage. This ensures regulatory compliance and fraud protection while keeping the onboarding flow smooth, fast, and simple (taking less than 60 seconds).

However, regulations vary country by country, and sometimes certain checks cannot be skipped. In such cases, Sumsub can help with advanced solutions like Geo-based Proof of Address to help speed up the verification process while ensuring compliance and a high level of security.

Q: We feel that companies fear that customers may feel reluctant to play at one brand or another if identity checks become too cumbersome, for example. Is there a way to show players that such checks are in everyone’s best interest and assuage industry fears that tightening AML/KYC standards would lead to an exodus of customers offshore?

I would not advise anyone to play on a platform that has little or no KYC. This is a sign the operator does not feel responsible for you as a user and therefore exposes you to risks. You may lose your deposits and winnings or, even worse, your bank card or identity data may be compromised. Moreover, based on our recent observations, even providers located in less strictly regulated jurisdictions (such as Curaçao) are facing KYC requirements commonly accepted in Europe.So it’s safe to assume that AML-compliant KYC procedures will soon become the standard for any reputable gambling company. Therefore, a platform neglecting its KYC obligations should be a "red flag" for users, indicating that it’s probably not in good standing with regulators and unlikely to act in the player’s best interest. Conversely, robust KYC procedures normally imply that users experience no trouble with withdrawals and their accounts are safe. Still, customer drop-offs remain a very real problem, and we are committed to help our customers avoid them while observing all legal requirements. Recently we have issued our first KYC guide for gaming companies in Europe, sharing detailed information on regulatory requirements and useful tips building efficient user verification flows and keeping the onboarding rates high.


Image credit: Sumsub

30 Aug 2022
7 min. read
Comments (1)
1 month ago

A very interesting conversation with our friends from Sumsub. We thought it interesting that Sumsub fully understands how players feel about accessing casino products but also emphasized the need to do more to root out fraud. What are your thoughts on this conversation?