"Risk management is mission-critical for all gaming operators whether tribal, commercial land-based, or online"

Kinectify recently entered the area of tribal data sovereignty by partnering with Microsoft to deploy its services on the Microsoft Azure Cloud for Sovereignty. The solution addresses tribal nations’ critical need for data control and risk management, allowing them to gain all the benefits of cloud infrastructure and modern software without comprising data control.

The intelligence and risk management technology company’s association with the Eastern Band of the Cherokee Indians (EBCI) helped it understand tribal concerns over data control and security. Interestingly, EBCI became an investor in Kinectify later as it experienced the significance of the technology first-hand.

In an interview with Yogonet, Joseph Martin, CEO of Kinectify, discussed the importance of tribal gaming technologies and addressed a variety of topics including the latest investment it raised from Aristocrat Leisure, the expansion of its advisory services, and the role of emerging technologies in risk management. He also highlighted how artificial intelligence and machine learning are enhancing Kinectify's compliance and risk management solutions.

Kinectify recently launched a risk management service tailored for tribal gaming, in collaboration with Microsoft Cloud for Sovereignty. What prompted this focus on tribal gaming, and what are the key features of the service?

Risk management is mission-critical for all gaming operators whether tribal, commercial land-based, or online. Our clients cross all these verticals in the US and Canada. Interestingly, the Eastern Band of the Cherokee Indians (EBCI) was one of our first clients and they became an investor in Kinectify after experiencing first-hand the significance of our technology.

Having EBCI as an early client-investor reinforced the importance of tribal gaming. One pressing issue arose from our conversations with Tribal Nations: data sovereignty. I had a great deal of empathy for their needs for data control and knew we needed to find a solution for tribes to enable them to leverage modern technology without compromising data sovereignty.

We approached Microsoft to explore solutions, knowing they serve governments globally with similar sovereignty concerns, and were pleased to discover an entire division dedicated to government services. This led to an exciting collaboration with Microsoft to deploy our services to the Microsoft Azure Cloud for Sovereignty.

The Azure Cloud for Sovereignty includes an extra layer of data encryption covering the full lifecycle of data. As an added layer of protection and control, Microsoft does not have access to the encryption keys ensuring that outside parties (including the US government) cannot access the data without permission from the sovereign entity who owns the data.

The exciting aspect of this service for both Kinectify and our tribal clients is that we maintain the full capabilities and benefits of using Microsoft Azure data centers without compromising sovereign control over data. This includes state-of-the-art data security and modern infrastructure to support cutting-edge software like Kinectify.

What unique challenges does the tribal sector face regarding data control and compliance? How does this new service help tribal nations manage data security while adopting modern technologies?

The tribal sector’s data sovereignty needs align with the needs of any sovereign nation, which is the necessity to control their data so no outside party can access it without express authorization.

In the past, many tribes ensured data control by requiring data to physically reside on tribal lands. This is no longer practical because modern technology relies on modern infrastructure found in data centers such as Microsoft Azure and AWS (Amazon Web Services). The unique capabilities of these data centers include hyper-scalability for data processing across thousands of machines, which is cheaper for the client and allows for modern technology to do powerful computations instantaneously. Kinectify relies on this capability, for example, to continually risk score millions of casino patrons and monitor billions of transactions. This level of speed and complexity is not possible with on-site infrastructure.

Further, the AI evolution exacerbates this scalability issue because AI requires large computing resources, which are not practical or even possible with a small set of fixed servers on-site at a casino.

The Microsoft Azure Cloud for Sovereignty is a game-changer for Tribal Nations because it allows them to gain all the benefits of cloud infrastructure and modern software without comprising data control. This enables tribes to immediately utilize modern software applications like Kinectify and also to think strategically about cloud migrations for all of their internal technical services. Organizations that do cloud migrations like this will see huge data security improvements and increased capabilities across all their gaming operations.

Kinectify received an investment round led by Aristocrat Leisure Limited in February. How do you envision this development enhancing Kinectify's strategic direction and technological capabilities?

We are Aristocrat fans and love working closely with such a forward-thinking global gaming brand. The relationship is important to both our organizations as indicated by their initial board appointment of industry veteran Jason Walbridge, who recently transitioned from Aristocrat to serve as CEO of New Zealand’s SkyCity Entertainment. Our new Aristocrat representative is Craig Toner, CFO & EVP of Gaming Operations. 

We are collaborating across product lines at Aristocrat to support innovative approaches to our industry's risk management needs. One thing that impresses me about Aristocrat is their sincere desire to set a high standard and their boldness in developing premium products and services. I have confidence that over the coming months and years, new innovative capabilities can be deployed through our collaboration with Aristocrat in North America and potentially in more jurisdictions globally.

Also in February, Derek Ramm joined Kinectify as Global Head of Advisory Services. What new directions or enhancements can we expect in Kinectify's advisory services? How do Kinectify’s services support gaming operators in maintaining compliance and managing risks effectively?

We launched Kinectify Advisors because our clients recognized that taking full advantage of our technology also includes changing their business processes and how their teams are set up. Some clients also saw an advantage in leveraging our AML expertise to manage the day-to-day administration of their AML program as a professional service.

We’ve seen smaller operators take advantage of these professional services, enabling them to focus on launching and growing their business while engaging Kinectify Advisors to administer their compliance programs with deep expertise. Gaming companies primarily exist to entertain players and engage customers with new and exciting products and services – and they can benefit by focusing on those core areas while utilizing service providers to assist in specialized areas such as AML compliance.

We were excited to welcome Derek Ramm in February to lead our advisory services group. Derek is recognized as one of the foremost authorities on AML and gaming in both the United States and Canada, and he heads a team of experts who have practical, hands-on AML experience in the gaming business.

Our current client base is interested in incorporating our software into their AML operations and is looking to Kinectify Advisors to help augment their staffing for additional efficiencies and expertise. This may include project work like AML program reviews, gap analysis, risk assessments, or certain types of staff augmentation for the day-to-day administration of their AML program.

As a company, Kinectify Advisors will continue to grow and mature alongside Kinectify Technologies and expand its professional service offerings to include responsible gaming, fraud, and other critical areas of risk management. We aim to leverage our extensive experience and deep expertise to enhance the capabilities of our clients and drive the conversation forward on risk management in the gaming industry.

By advising gaming operators, regulators, and government agencies, we are committed to sharing best practices and innovative strategies to combat illicit activity. Our goal is to foster a secure and transparent gaming environment, ensuring that all stakeholders are equipped with the knowledge and tools necessary to effectively mitigate risks.

Looking ahead, what are the key areas of innovation and growth for Kinectify? Are there any emerging technologies or trends that you believe will significantly shape the future of risk management in the gaming industry?

One exciting area of innovation and growth that may shape the future of risk management in the gaming industry is our new jurisdictional capability. We are in the final steps of a major government procurement that will implement Kinectify at all casinos in a jurisdiction, and then we will deploy a dedicated module for the government entity to monitor player activity across the jurisdiction.

This will be the first time ever that a jurisdiction can truly monitor suspicious activity across all casinos in a jurisdiction using all available data. This is highly valuable because money launderers and criminals will often move between casinos and operators to obfuscate their activity, making it difficult to detect and increasing the risk of further criminal activity and negative perceptions about the gaming industry.

But this jurisdictional capability goes far beyond compliance with AML requirements. A jurisdiction can deploy this technology to monitor problematic gambling behaviors, fraud, and other risks. They can risk-rate players at a jurisdictional level, facilitate better regulatory reporting and ensure the integrity of their gaming operations. Operators and government agencies can better cooperate on risk management and focus their resources more effectively on areas identified as high risk. This will be a very positive step forward in how risk is managed across gaming jurisdictions globally.

We could not be more thrilled to be working with a government entity innovating in this direction and are excited to announce this collaboration later this year.

How is Kinectify planning to leverage artificial intelligence and machine learning in enhancing its compliance and risk management solutions?

Kinectify utilizes a range of modern technologies including various forms of artificial intelligence (AI) and machine learning (ML). We strongly believe that risk management decisions should remain with our users – that is, our job is to help automate workflows, detect suspicious activity, and present data to enable users to get from A to Z as quickly as possible. All of our advanced technologies, including AI, are incorporated in a transparent way so users can understand how the product works and configure it to fit their needs.

These modern technologies are like various tools in an artist’s toolkit, and the usage of the right collection of tools enables us to craft a masterpiece.

Our transaction monitoring capabilities are a good example of this. We use a collection of modern technologies that include algorithms, data visualization libraries, standard coding, and language models to detect suspicious activity, assist in the investigative process, and populate Suspicious Activity Reports (SARs).

We’ve invested – and continue to invest – an extraordinary amount of time and effort into the user interface to enable users to see everything they need in the right place while maximizing their efficiency. The result is incredible. Our users are able to make decisions on suspicious activity alerts in under 4 minutes, while the industry average is 60-90 minutes. Our system can also populate SARs in under 1 second, versus an industry average of 2 hours.

Our AI roadmap includes numerous features such as allowing users to type anything in plain English to create new monitoring rules or pull data reports, using neural networks to detect new patterns of suspicious activity in real-time, and the list goes on. We are taking great care and a responsible approach to building these capabilities so we can provide transparency as to how they work and ensure the users remain in charge. 

We have a close relationship with Microsoft and their unique partnership with OpenAI, participating on the Customer Advisory Board to stay involved in quickly evolving new technologies. We are also working with leading audit firms and testing labs like Gaming Laboratories International (GLI) on model validation to provide additional independent validation of our software features.

In short, Kinectify is committed to bringing the latest technologies to the gaming industry and we are excited for the future state of risk management that we are helping to shape.