Law No. 14,790/2023 consolidated the regulation of the sector and raised the technical standards for operators. In practice, KYC is not just a regulatory requirement but also a fundamental conversion gateway, and a weak architecture can result in direct revenue loss.
These requirements, along with subsequent ordinances, aim to ensure security, transparency, and compliance in operations, protecting consumers and preventing illicit practices such as money laundering and terrorism financing.
However, one of the biggest challenges faced by operators in Brazil is ensuring that the identity verification (KYC) process is not only accurate and agile but also adapted to the local reality.
The diversity of documents and the technological variations among users demand a customized and efficient approach to meet market demands and regulatory requirements.
Inefficient KYC and user frustration = loss of revenue and trust
In the Brazilian market, the speed and availability of the KYC system are essential to ensure high conversion rates and reduce betting abandonment. Every instability or delay in the verification process can result in revenue loss and directly impact the bettor’s experience.
To solve this problem and ensure that the verification process is fast and seamless, operators need a robust infrastructure, capable of processing millions of verifications per minute and guaranteeing 99.9% uptime.
This invisible infrastructure must rely on three fundamental pillars:
1) Load balancing + elasticity
* What it is: intelligent distribution of requests across instances or zones with auto-scaling based on metrics such as queue, CPU, and p95 latency, and rate limiting per verification provider.
* Why it matters: allows operators to handle demand spikes (such as campaigns or special events) without generating queues or timeouts, resulting in a smooth user experience.
* Health signals:
- SLA = 99.9%.
- p95 latency < 1s on the KYC endpoint.
- Request queue below X req/instance.
2) Observability and proactive response
* What it is: implementation of end-to-end tracing, performance metrics (latency, errors, queue), synthetics to test the full flow, and threshold- or delta-based alerts.
* Why it matters: observability can reduce MTTR (Mean Time to Repair) by up to 40%, limiting the impact of failures and improving operational efficiency.
* Health signals:
- Alarms based on error budget.
- Action playbook for different scenarios (e.g., traffic spikes, system degradation, slow external provider).
3) Automatic failover (active-active or active-passive)
* What it is: automatic rerouting of traffic to another zone or provider when a component fails, without impacting the KYC process.
* Why it matters: ensures continuity of the KYC process even in the face of partial failures, preventing disruptions in betting and registration flows.
* Health signals:
- RTO (Recovery Time Objective) measured in seconds.
- Monthly “game days” to test Disaster Recovery (DR).
Financial impact
A) Interrupted betting spike
- Calculation: 1,000 bets/min × R$80 = R$80,000/min
- Loss in 5 minutes of downtime: R$400,000
B) MTTR reduced by observability
- Without observability: 60 minutes of downtime × R$80,000 = R$4.8 million loss
- With 40% MTTR reduction (36 minutes): 36 minutes × R$80,000 = R$2.88 million
- Revenue preserved: R$1.92 million
C) Failover in registration/onboarding
- Calculation: 10,000 registrations/min × R$20 = R$200,000/min
- Loss in 5 minutes of downtime: R$1,000,000
- With failover in 30s: residual loss ˜ R$100,000
- Revenue preserved: R$900,000
Note: illustrative values; adjust volumes and ticket size according to your operation.
Is your operation ready to scale without losing revenue?
During major traffic spikes such as sports events or massive promotions?
* Are you prioritizing the bettor’s experience? Or does the verification process remain an obstacle to conversion?
* When the last technical issue occurred, how long did it take to resolve? And, more importantly, is your operation able to calculate how many bets and potential deposits were lost during that downtime?
If you want to measure your current risk of loss, run a KYC efficiency analysis: SLOs (Service Level Objectives), MTTR (Mean Time to Repair), peak capacity, and DR (Disaster Recovery) plan. Mature operations treat KYC as revenue architecture, not just compliance.
Source: Legitimuz
