Due diligence standards in the iGaming industry have matured significantly in recent years. Regulatory bodies like the UKGC have tightened their regulations, and as a result, companies now need to pay more attention to compliance than ever before.
With such an increase in volume, maintaining rigorous standards has increasingly become a challenge for businesses. Lapses in judgment and simple errors have had serious consequences, and as regulations continue to tighten, this is only going to become more common. However, the rise of AI technology presents a big opportunity to help lighten this burden. While pure automation can deliver everything that operators need, a hybrid approach that combines AI’s processing power with human expertise and judgment is increasingly looking like the way forward.
Where AI Delivers
Artificial intelligence excels at work that overwhelms human teams. What takes compliance officers hours to review, AI processes in minutes. When dealing with six months of bank statements or complex ownership structures, this speed difference becomes transformative.
Volume handling is equally critical. AI-powered systems can manage thousands of checks whilst applying consistent standards to every single one without fatigue. This scalability is essential as businesses grow and regulatory requirements expand.
Pattern recognition is another area where AI technology shines. It can spot anomalies and issues much faster than a human reviewer might be able to. Problems like unusual transaction patterns or inconsistencies between documents can be flagged much quicker and will not go unnoticed. Of course, they are also able to operate around the clock, with no downtime required. This makes working through high volumes of documents much more efficient.
The Human Touch
While AI technology is undoubtedly efficient, there are still elements where it can not replace human judgment. Context is always going to be important in due diligence, and a complex understanding of nuance and situation is something that AI can not deliver.
The technology may be able to flag suspicious bank transactions, but a human is still required to assess them and come to a decision.
Likewise, when performing due diligence checks on a business, AI may be able to highlight or approve financial aspects of the business, but it will not be able to make a judgment call based on reputation. Technology can provide data, but humans are needed to weigh in on less quantifiable elements. Humans, however, are flawed. We can burn out, become emotional, or just sometimes get a bit complacent. AI does not have to contend with any of these issues. It is only natural for error rates to increase with repetitive tasks, with even the most seasoned professionals occasional missing details.
A Safety Net
AI is particularly efficient on this front. It is not going to tire, and will apply the same rigour to the thousandth document it reviews as it does to the first. Of course, humans can also highlight certain contextual errors or problems AI might miss, and it is this combination of AI efficiency and human insight that creates a dependable safety net.
As well as avoiding regulatory issues, there is also a very solid business case for this combination. Faster verification can mean quicker customer onboarding, with long wait-times for verification often leading to customers looking elsewhere.
AI being deployed to manage more routine verifications can also free up time for management of more complex cases. For most operators, the top 20% of their cases take up to 80% of their time, and a hybrid approach made possible with today’s technology can help restore some of that balance.
Changing the Approach
Crucially, in the modern regulatory climate where an inconsistent supplier due diligence strategy can lead to fines and reputational damage, a hybrid approach can help companies stay ahead. The ability to continuously monitor becomes more feasible when technology can handle regular reviews automatically, flagging any changes that might need human assessment.
This shift from reactive to proactive compliance can have a huge impact on business. Instead of scrambling when regulatory issues rear their head, businesses can maintain regulatory oversight and ensure they avoid any nasty surprises.
The operators succeeding in today’s regulatory environment combine AI and human strengths strategically, using technology to handle what it does best while preserving human expertise where it’s essential. This approach allows businesses to continue to scale while also keeping up with an ever-changing regulatory landscape.
