After the check: keeping players safe

Welcome to the final (for now) instalment in our ‘how to’ guide for operators looking to implement financial risk checks in the most effective way possible (i.e. one that retains revenue, and incurs as little cost and inconvenience as possible all around).

Before going further, I want to remind readers why we embarked on this little project. It’s really quite simple:

Whilst most operators we speak to report completion rates of 10-15% for financial risk checks, we know they can be over 50%.

They just have to be done in the right way, and as we’ve spoken to and worked with dozens of operators at this stage, we’re pretty confident we know what the right way is. And if you want to be really cynical, we’re telling the world what the right way is because it involves using ClearStake. 

So far we’ve figured out the right way to ask for data, what data to look for, how to make the process easy for your customers, and how to reach a decision quickly. Now it’s time to think about communicating that decision, and maintaining an ongoing relationship.

Sharing the results

There’s one golden rule here, which is worth talking about in a little detail:

Don’t give your customers a score

We don’t mind admitting that we made this mistake ourselves in early versions of the ClearStake product. After all, credit reference agencies give people scores, isn’t that the standard way to do this kind of thing?

Well, ‘no’ is the simple answer to that question. In fact, scores are not helpful, can be actively misleading, and are definitely a distraction. 

Think about it. When you are performing a financial check, you are evaluating an individual customer, in a specific situation, to establish whether that customer meets the criteria to pass the check. Nothing else. Whatever score they were given would be completely irrelevant in a different circumstance. On that basis, giving a score (and encouraging a customer to improve their score, which comes with it) is misleading and probably unhelpful.

In other words, don’t get cute. Just communicate with a customer that they have passed the specific check involved, and let them know what that means for them. In most cases, you can do that using the communication channels you use today - the same ones that helped ensure the customer started the process in the first place.

The ongoing relationship

There’s one great advantage of Open Banking that we haven’t discussed yet: the fact that once relevant bank accounts have been connected, they stay connected. Or at least they do until the customer decides to stop sharing data: which always (and quite rightly) stays under their control. 

That has a number of implications for compliance teams, and anyone concerned about the impact of financial checks. But by far the most important is this: there need be no friction at all for future checks. In fact, the customer doesn’t even know that they are taking place.

Following the same logic, operators should be aware that what they need to do is get customers to connect via Open Banking once. And precisely when they do that is up to them. This is why some operators set spend limits for all customers, and conduct financial checks when customers reach those limits, rather than those that are set by the regulator.

By taking this approach, they achieve three things:

• Firstly, they are in control. They can communicate spend limits to the customer, and predict when they are likely to be hit. Everybody knows where they stand. This approach can, of course, be used for multiple clear and transparent spending limits.
• Second, they are less likely to be caught out and have to limit customers. If you only conduct financial checks when it becomes absolutely necessary, you risk turning away revenue whilst you complete the process (or worse, losing the customer entirely). When you set your own spend limit, you can allow staking to continue whilst the process is underway.
• Third, it’s just safer. Spend limits mean that you are always on the right side of emerging regulation and have nothing to fear from the dreaded audit!

Of course, when additional checks become necessary, a customer may fail. In this situation, Open Banking can still help: your decision engine should point out precisely why the customer has failed, and this can save a lot of time when it comes to resolving the issue (if, of course, it is resolvable)

On that note, it may also be the case that something that prompts a definite fail has been seen when performing the check via Open Banking. This could be a particular type of transaction, for example, that is considered by the operator to be a definite red flag. In this situation, it is simply a case of your regular compliance policies kicking in. Communicate as you would when a customer fails any other financial check.

One last thing. Although Open Banking means you won’t have to tell customers about ongoing checks, that doesn’t mean you shouldn’t. Transparency is often appreciated. As per the comment above, it may make sense to take control of checks according to your own policies, and let customers be aware of the spend limits at which you perform checks, and also the frequency of those checks. This gives those customers an additional motivation to stay connected over the long-term: which makes life easier, and safer, for everyone.