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The UK has long been regarded as a forerunner in digital safety and financial security, largely due to its extensive KYC (know your customer) frameworks. Applied to banking, brokers and industries such as iGaming, these KYC policies have ensured that nobody can register or transact without first verifying their identity.
As digital entertainment has evolved from a simple way to enjoy our free time into a complex web of micro-transactions, digital wallets and cross-platform spending, so has the way that fraud and harm move. What once was caught through one-off checks and verifications can now dynamically adapt to avoid detection through periodic checks.
As such, while KYC focused on who was transacting, attention is now shifting to how transactions occur—marking the transition from KYC to KYT (know your transaction).
This move, driven by the stringent standards of the UK Gambling Commission (UKGC) and the Financial Conduct Authority (FCA), is set to shake up the digital entertainment market as much as it will personal finance. Below is all you need to know about this shift.
KYC vs. KYT: What’s the Difference?
KYC checks are commonplace across the UK, and most people are familiar with them. They have been in place for many years and help businesses verify that customers are who they claim to be.
To do this, these checks require people to submit proof of their identity, proof of address and (occasionally) proof of bank account ownership. These are used to verify that people are above the required age, not on any exclusion or sanctions lists and verifiable residents.
However, these checks often take place at the time of registration or at a specific point in time. While some platforms require you to re-verify periodically, most don’t. They collect your information once, store it and produce it if audited to ensure compliance.
KYT, by contrast, is a continuous process that actively monitors user behaviour by logging each transaction you make. When gambling online, this includes your deposits, withdrawals, purchases and even bet amounts.
This information is used to check not only that it is you performing these transactions, but that all transactions are in line with what is expected for your play style, safe and lawful. This continuous monitoring allows immediate highlighting of any transaction deemed out of the ordinary.
The push toward KYT in capital markets and banking is being driven by the FCA, which believes these checks are central to catching money-laundering attempts. As such, the FCA recommends that these checks should be instituted across all customer-facing functions. The UKGC tends to agree.
In 2024, the UKGC launched a pilot program measuring player net losses. Triggered at specific thresholds (£500 per month in 2024 and £150 per month in 2025), these checks use publicly available data to ensure player safety, curb money laundering and promote responsible gambling habits.
Digital Entertainment Leading the Way
Despite the FCA’s hope that all businesses will implement KYT, it is the digital entertainment industry that is leading the way. This industry, which comprises iGaming, streaming services, video games and more, has evolved into an extensive and interconnected payment ecosystem. Transactions range from monthly subscriptions and in-game purchases to gambling deposits and collectable sales.
Aside from being able to develop reliable and extensive behavioural profiles due to the number of transactions within the digital entertainment sector, this industry is also ahead of others because of regulatory pressures. These pressures are related to various front-line risk vectors caused by the following:
Transaction Volume and Speed
Digital entertainment platforms, particularly online casinos, process vast numbers of transactions daily. These often occur within minutes, and the sheer volume is too great for manual review.
As such, these industries provide the perfect training ground for advanced AI (artificial intelligence) and machine learning systems that can be trained to spot an abnormal transaction among a sea of regular ones.
Currency Rails
In addition to processing high volumes of transactions, digital entertainment providers often also support multiple forms of payment. From standard fiat transfers from a bank account to cryptocurrency payments made through an exchange before being withdrawn to an e-wallet, the many ways in which money moves within the industry make it a target for fraud and money laundering.
Due to this increased risk, the FCA believes digital entertainment platforms should be subject to financial-services-level monitoring and required to implement transaction monitoring, calibrated alerts and strict AML (anti-money-laundering) protocols and governance.
A real-life example would be a player who has been dormant for some time suddenly beginning to deposit large amounts frequently. Algorithms should flag this, prompting investigation. Similarly, if an NFT (non-fungible token) frequently moves between newly created wallets with no history, it could raise concern.
While some in the industry have criticised the introduction of KYT — citing cases where legitimate transactions might be queried or blocked — the aim is to identify significant risks at machine speed so that proportionate intervention can occur.
iGaming and KYT
As mentioned, under the prompting of the UKGC, the iGaming sector is implementing KYT policies and checks across the board. Many new online casinos are launching with pre-configured KYT systems that operate from day one.
Because these operators launch with compliant systems rather than adding them to legacy programs later, they can instantly produce a transaction-risk score for players. This is done in real time as you play using a range of methods and protocols that include the following:
Payment Monitoring
All deposits and withdrawals are screened to identify their amount, frequency and source processor. These are measured against each player’s historical record, and any transaction deemed questionable — such as a large payment being approved on a card that was previously declined — is flagged.
AI-Driven Scoring Systems
All transaction information, including wagers, is processed by AI and compared against each player’s previous gameplay as well as the behaviour of peers. Any uncharacteristic gameplay patterns are intelligently flagged for review or inspection.
Real-Time Alerts and Additional Checks
For any transaction that receives a score identifying it as risky, real-time alerts can be triggered. These can be manually evaluated or programmed to initiate step-up friction methods such as prompting affordability questions or placing caps on deposit amounts.
These KYT tools are deployed alongside additional transparent player tools that would typically be mentioned in any well-written review of new UK casinos. Among these tools are spend trackers, more user-friendly self-exclusion options and cool-off features. Together, these KYT and player tools help build accountability and trust by letting players know that operators are working continuously to protect them.
KYT and Data Privacy
While KYT policies aim to protect players and build trust in the industry, they rely almost exclusively on large volumes of data, which pose a risk if handled incorrectly. In addition, the UK’s GDPR has adopted a data-minimization principle that stipulates operators may not require any more data than is absolutely necessary.
To prevent players feeling that their data is being collected unnecessarily, all operators must record what information they collect and why. This must be outlined in a Legitimate Interests Assessment (LIA) document. At the same time, KYT systems should pseudonymise identifiers when they first encounter the data and only allow re-identification if an alert is raised.
Although these checks should reassure players concerned about privacy, public perception will surely shape adoption and evolution. While players may accept some friction if it offers additional protection, they are likely to oppose any bulk data collection or measures that make their entertainment experience unnecessarily difficult.
Conclusion
The move from KYC to KYT signals a fundamental change in where and when oversight occurs. Where oversight was once reactive to potential fraud or money laundering, it is now becoming proactive and taking place in real time.
This shift leads to a safer environment for anyone engaging in digital entertainment and allows support to be offered and enforcement to be applied when needed. While it may mean a little more of your data is recorded, the trade-off appears, at least for now, to be worthwhile.
