From the first arcade games in the 70s to multiplayer graphic-intensive games, the industry has risen exponentially. In the media sector, video game earnings beat TV, movies, and music gains. Year after year, the number of players keeps increasing, which pushes the records to new heights. Apart from direct video game sales, the vast user base is also responsible for sprawling esports events worldwide. Due to the immense popularity of such events, there is a rising threat of fraud and money laundering. Therefore, verifying businesses becomes essential to safeguard business and player interests. This post discusses the benefits of using a know your business solution in esports to protect business and player interests.
Areas Where KYB Solutions Can Help
By an estimate, the global esports market stood at $1.22 billion in 2021. It exhibits a Compound Annual Growth Rate (CAGR) of 21%, which puts the market at $5.48 billion by 2029. Chiefly, the pandemic lockdown was among the primary factors behind the sudden growth of esports. More and more people are now turning toward esports for entertainment. Where gaming companies are investing to capture new markets, they should also notice the rising threat of fraud and scams in gaming competitions. Money launderers and cybercriminals are always on the lookout to exploit unsuspecting people over the internet. Gaming is one sector where they can do immense damage if security measures are not implemented properly. Therefore, companies in this space should utilize know your business (KYB) to verify the businesses they deal with. Here are some of the benefits of using business verification services:
- Ensuring Fair Competition
Like other media events, esports aims to entertain the general public and hardcore gamers. However, unregulated anti-money laundering policies and a lack of know your business approach open multiple gateways for financial crimes. In most multiplayer games, in-game currency is transferable, making it easy for scammers to siphon resources. Moreover, gamers tend to connect their credit cards to make in-game transactions. Scammers use phishing attacks to take hold of the accounts and make financial transactions on behalf of the user. Apart from scammers, organized crime rings can use player accounts to launder money overseas. The presence of illicit activities makes it unfair for legitimate players, as they will always fear account takeover. A know your business solution is necessary to create a safe environment in the gaming platforms.
- Verifying and Streamlining Sponsorships
In esports, the majority of the revenue comes from competition sponsors. In the first scenario, gaming companies skip the due diligence process in favor of profit. Doing this can have harsh consequences for the companies in the future. Whereas in the second scenario, gaming companies manually verify the sponsors. Even though verifying a business is much better than the former case, this approach has numerous drawbacks. Manual verification introduces human errors, reduces efficiency, and the accuracy is also not great. In such circumstances, a know your business solution with automated business verification services becomes necessary. Such solutions utilize AI and machine learning techniques to verify the identity and associations of businesses.
- Securing Investments by Verifying Companies
Apart from securing player rights, companies need to fend for themselves as well. It is improbable for a company to enhance customer experience without having good investors. Therefore, investor verification is another critical area where a gaming company can utilize a know your business solution. Since the gaming industry is experiencing a rising demand, money launderers can consider it a golden opportunity to clean their laundered money by investing in such companies. Rather than face the consequences later, businesses should implement a robust know your business policy. Verification of the business enables a gaming company to identify the most suitable partners for their growth and sustainability.
- Maintaining a Level-Playing Field
Esports are competitive events, players from around the world take part in these competitions to play against each other. The presence of fraudulent activities sets a bad precedent for global entertainment events. Moreover, some mechanics in the game, such as loot boxes, can be exploited to favor certain players in the match. It ruins the competitive nature of esports as an industry. A know your business solution at the onboarding stage enables the gaming platforms to identify and flag illicit entities.
Future Outlook of KYB Verification in Esports
Esports is gradually becoming one of the most significant entertainment events globally. However, the risk of fraud and scams could hamper its growth and push players away from gaming platforms. Companies should invest in an advanced know your business solution to safeguard business interests and players’ security. For verifying businesses, leaders should look for AI-based tools that offer better accuracy and seamless integration.
Read More Business Blogs:
KYB Verification for Fintech Startups: Navigating Regulatory Challenges
The Role of Deposit Insurance In Safeguarding Fixed Deposit Investments
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