How blockchain provides the ‘first, most credible solution’ to KYC & AML data challenges

Blockchain technologies provide the “first, most credible solution” to issues facing iGaming firms around ‘Know-Your-Customer’ (KYC) and ‘Anti-Money-Laundering’ (AML) data collection, according to Nick Hill, a vocal expert in several regulatory aspects of the industry and proponent of the technology.

Making the claim in a lengthly article on his personal LinkedIn account, he states that fines are in place for those transgressing the boundaries set by regulators including the Malta Gaming Authority (MGA), and the UK Gaming Commission (UKGC).

This, he says, has the effect of creating an “ever-greater” compliance cost for operators, with the case in point being the MGA, which has displayed a willingness to “show its teeth” in pursuit of firms falling short of compliance requirements, or being able to prove their adherence to the rules.

The trend, according to Mr Hill, is indicative of a move towards more robust regulation, “resulting in industry stakeholders to cry out for new technologies to tackle these problems.”

A particular issue is that of companies compiling incomplete or inaccurate information, which is a “compliance fine waiting to happen,” characterised by another expert cited by Mr Hill as one of trust in the integrity of data, on which a breadth of other decision are made.

According to figures cited by the expert, compiled by commercial blockchain solutions company nChain, over 50 per cent of firms believe their audit trails to be compromised. For iGaming operators, Mr Hill points out that this can result in significant liability.

His solution, involving the use of blockchain, is said to allow player and game data to be recorded instantly and immutably to the blockchain:

“Data can be written to the chain in real time as it is generated and shared seamlessly with regulators on a permissioned basis.”

Key advantages of this include that compliance records can be made available at their point of origin, and will be timestamped, creating what Mr Hill characterises as a “perfect audit trail for irrefutable proof.”

Other advantages of blockchain technology for iGaming operators includes the unification of fragmented and “disparate” sets of data across the cross border iGaming landscape, therefore giving a chance of revolutionising the sector, providing a whole new platform for effectively managing the compliance burden.