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Wednesday, 03 August 2011 09:27
Building Trust in Online Gaming: Managing Security Risks
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The global market for online gaming is predicted to be worth €22 billion by 2012, a growth rate of approximately 42 percent from 2008, according to H2 Gambling Capital. Yet, despite this growth in the adoption of online gaming, users still report a massive lack of trust in the sector’s ability to protect their digital identities when interacting with casino or betting websites
The risks associated with online gaming can be significant. A YouGov survey commissioned by the GB Group found that the average financial exposure of online consumers in the UK is as high as €8,349 when all web-based accounts are included in the calculation.
The same survey found that only four percent of UK consumers said they could trust online gaming brands to protect their identities, compared with 52 percent who said they could trust their banks or building societies with personal information. Only travel companies (six percent) and mobile phone providers (nine percent) came close to online gaming in terms of lack of trust.
So what is going wrong? How can online gaming companies address one of the biggest risks to their brand reputation and income streams?
Areas of risk
The first area of risk includes fraudulent bets, or interactions, with an online gaming site. Fraudsters hack into a site using stolen identities and play to win without having to spend any of their own money.
The second area of risk concerns chargebacks. This can happen when a customer is wrongly charged for an interaction on a site because somebody else has used their identity or log-in details. The customer rightly refuses to pay, so the money is charged back to the online gaming company.
Chargebacks can also be a problem in cases of so-called ‘friendly-fraud’, in which savvy customers are aware that gaming debts are often unenforceable. If they do not like the outcome of a bet, they contact the card issuer to say that their card has been used fraudulently. The issuer is then duty bound to raise a chargeback query and unless the gaming company can provide a clear audit trail and prove definitively that it was the customer who placed the bet, then the operator will nearly always accept the chargeback cost.
Quite apart from the lost payment involved, chargebacks take time and effort to manage, while erroneous charges do little to build a customer’s confidence in a brand. There are many gaming forums across the world where gaming sites and their ability to handle personal information is discussed at length – whether those accusations are founded in fact or fiction.
Indeed, fraud and chargebacks create a lack of trust in individual sites that can affect both customer acquisition and retention, simply because users feel worried about their personal details may be at risk of being copied or stolen. There is also the wider issue of damage to the online gaming industry as a whole and why all providers have vested interest in seeing an overall uplift in security standards.
Spyware
Security infringements often take place when fraudsters use spyware to launch keylogging attacks on gaming sites. In these instances, they literally log the keystrokes of a user as he or she enters their username, password, bank account/credit card numbers into a website. They then store the details and use them to steal that user’s gaming identity in the future.
Spyware, with its ability to silently monitor users’ activity and steal data, is one of today’s most dangerous computing threats. With the increased sophistication of cybercrime, syndicates regularly target specific information from specific websites, and are often able to overcome whatever endpoint security is on the user’s PC.
The August 2010 Cyveillance report showed that even the best and most up-to-date anti-virus solutions only identify and thwart 19 percent of new spyware. And with close to 90 percent of personal computers infected by spyware, it shows that advice to protect a user’s PC with traditional desktop security is a losing approach. The user or company is almost always unaware they are infected by spyware and that information has been stolen until it is too late.
A second major threat comes from phishing, which involves the sending of fake emails to a user purporting to be from a legitimate gaming site, soliciting sensitive information. Users can be easily duped with such emails and readily surrender personal information that can again be used by fraudsters to access their accounts online.
Technical Solutions
It’s not surprising that an industry has sprung up to provide technology solutions that address security attacks. The problem with some of these, particularly two-factor authentication, is that they are cumbersome to use. As every online gaming company knows, anything that gets in the way of a bet or an interaction is very bad news.
Many online gaming companies employ sophisticated back-end solutions to address fraud. But these can be beaten by cybercriminals that know the systems, and they are often reactive.
For this reason, companies like SentryBay have designed solutions that stop user credentials being stolen when using online gambling applications; stopping the fraud happening in the first place. They prevent any sensitive data that is entered into the application (such as passwords/PINs/bank account details) from being uplifted by spyware that may reside on a host computer.
It prevents data attacks at any level of the operating system, and this prevents unauthorised access to an application. Its proprietary methods also proactively prevent phishing attacks. These solutions are complementary to the back-end systems currently employed by operators, significantly lessening the fraud that reaches those systems.
Deploying these effective solutions gives the industry the opportunity to enhance the level of trust is has with consumers, which will also have a noticeable impact on customer acquisition and loyalty. Two and three-factor authentication solutions (developed by SentryBay) still only require the entry of simple user name and password and no hardware – thus keeping advanced authentication simple to use. This is crucial when maximising revenues per customer.
In a recent report, ‘Online Gaming: a gamble or a sure bet’, KPMG predicts that the online gaming market is without doubt an attractive area of expansion and that investment in this sector may have less risk than it appears.
One risk that still remains, however, is the loss of personal and confidential data via online gaming sites. This is a serious issue for operators hoping to build customers’ long-term trust in their brand. Online gaming companies must proactively address these concerns now that there is the means to do so.
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