The role of big data in online fraud prevention
DeltaDNA CEO Mark Robinson explains why developments in the application of big data provide some possible answers to an evolving threat
Looking at the anti-money laundering (AML) measures introduced by the Gambling Commission earlier this year, we can see that issues around cyber-crime, how to detect it and crucially how to fight it, are now front and centre for the online gambling industry.
A role for data analytics
In the online gambling world, the threat from fraud is multi-dimensional and the AML measures from the Commission make it plain that gambling operators will need to conduct constant risk assessments, taking into account changed circumstances, new technology, new payment types along with any changes in the customer demographic.
Given this backdrop, the Gambling Commission is understandably keen that data analytics plays a part in combating fraud. In a foreword written in February 2015, the then chairman Philip Graf said that some sections of the industry â particularly online â were now exploring how data, as well as being helpful in holding on to a customer, could also be used “for identifying and preventing money laundering, including criminal spend”.
His comments were followed up by the new Commission chief executive Sarah Harrison when she addressed an audience of assembled regulators at the World Regulatory Briefing at ICE in February this year. She similarly called on the industry to apply the “same intellectual and commercial expertise” as it does in applying data analytics to commercial ends towards not only its social responsibility efforts but also in its “detection and deterrence” of crime and fraud.
I believe the industry should pay heed to such comments. They pinpoint not only how data is increasing in importance when it comes to UK operators fulfilling the Commission’s licensing objectives but also how there is already an awareness among the regulators of just what can be done.
Big data transformation
The strides being taken by big data analytics mean that operators can achieve a level of targeting and understanding of player behaviour that was unheard of until comparatively recently.
From the very beginnings of a customer journey, big data can transform the insight of any given operator into the player in question. It can provide personalised insight, and with that comes a huge opportunity to better understand what risks fraud can pose to any business. With the data to hand, a fully responsive process can identify risk from the onboarding process onwards.
So why the need for both Harrison and Graf to call for its greater application within the gambling sphere? I believe it is because the message is yet to truly hit home of just how transformational big data will be.
Behavioural data
In commercial terms we know that many organisations are guilty of taking marketing decisions with very little – or indeed no – scientific basis. When this occurs in marketing, the cost of such judgement-based calls can merely be an opportunity lost. In the world of compliance, however, such a decision-making process (or lack of a process should I say), has the potential to be much more costly.
Historically data has been quite fragmented. The suppliers and the platform providers have had in-game data and the operators have had out-of-game data. But now the industry is starting to address the issue of pulling this data together, in order to gain a single view of the player.
As with problem gambling, fraudulent behaviour is often well-defined. This means data can highlight historical instances, but also used in real-time it can help operators spot attempted fraud as it happens. Specifically, it can flag âoutlier’ data observations such as win percentage, bet size and volumes; and it can also determine potential collusion, where individuals frequently achieve unusual outcomes. Consequently, bets can be limited; suspicious transactions can be spotted; fraud can be nipped in the bud.
The sophistication of online fraud today demands an equal response from the operators and best practice can be shared across the industry. I believe this is what the UK Gambling Commission is calling for, and I know from my experience with deltaDNA that it is indeed possible. We characterise the comments from Harrison and Graf as a public nudge in the ribs, and I believe the industry should take heed lest the regulator’s next move is much more forceful.
Mark will be discussing realâtime data approaches to fraud and social responsibility during next week’s EGR webinar.
You can register for the event here