Consent is key when it comes to affordability

Anyone following the news (well, OK, anyone following our own particular niche of the news) is aware that the definition of ‘frictionless’ has become a talking point amongst compliance teams in gambling operators around the UK.

Although the white paper provided clarity in some areas, it is fair to say that it failed to do so in others. And there was no better (by which I mean worse) example of that trend than the frankly reckless suggestion that “our intention is that these checks will also be frictionless for customers and conducted online by credit reference agencies”, which to most sentient readers simply raises the question “how?

Let us talk frankly. Based on everything else contained in the white paper, and everything the UK Gambling Commission has said and done over the past few years, the decision to allow a customer to continue to stake beyond £2,000 in a 3 month period is only going to be based on actual disposable income. 

So the circle that needs to be squared is in fact relatively easy to get our heads around:

How can an operator find out a customer’s disposable income, without having to ask the customer to do anything?

And here is the crunch. There are two central problems with attempting to do this, which can be summarised as follows:

  1. It isn’t currently possible, and
  2. Even if it was, it isn’t desirable anyway - and raises fundamental questions about consumer consent

I’m not going to go into point number 1. For the time being, you will just have to take my word for it and wait for a blog post in the near future. But point 2 is far more interesting, and in my opinion far more important. Let’s talk about why.

Consent matters

For the moment, imagine you are an enthusiastic punter (not particularly difficult for the author of this piece). Would it strike you as a good thing for the operator that you bet with to have access to your disposable income, without you knowing anything about it

I am going to guess that most would answer “no” to that question. And mostly for the reason that I helpfully bolded in the previous paragraph. It isn’t that I would have an issue with sharing that information, particularly if I knew it was going to be used to allow me to stake as I wished, but be protected from financial harm caused by gambling. It is that if I am going to do that, I would like to do it with my eyes open, and I would like to be in control of my data.

And what about the idea that these checks will be provided by “credit reference agencies”. Really? Is the expectation that consumers will be left unaware (frictionless, remember) as hard credit checks against their name are being undertaken - by gambling operators? That strikes me as an accident waiting to happen and a can of worms that will thus remain closed for a long time to come.

A short digression: it is absolutely true that in theory ‘hard’ credit checks (if that is what we are talking about, we actually have no idea yet) do require customer consent. However, that consent is often gathered within broader terms and conditions, and thus unless something changes, what is being proposed may well some form of check that the customer is unaware of at the time

Anyway, with that out of the way, the bottom line remains:

  • Guessing disposable income is no longer enough for the UKGC
  • Frictionless methods of accurately establishing it are ethically dubious and likely to damage the customer’s financial situation (without them even being aware this is happening. 

So what’s the alternative?

Open Banking

When quoting the white paper earlier I cheated a little by leaving off the end of the relevant sentence. In its entirety, the paper says:

“Our intention is that these checks will also be frictionless for customers and conducted online by credit reference agencies or through other means such as open banking in the first instance”

And there it is, after the red herring, the actual meat and two vegetables. There is a way of:

  • Calculating disposable income
  • Using real financial data
  • With the consumer’s explicit consent
  • And the same consumer maintaining control of their own data
  • That is almost entirely frictionless, and 
  • That is already used in a wide range of contexts today

It is called Open Banking. 

It is, by any stretch of the imagination, the entirely obvious way to get this job done. And I want to make the core point of this piece clear once again. In the Open Banking process, the only ‘friction’ is the friction that should be there: the customer explicitly confirming that it is acceptable to use their financial data to calculate disposable income. 

At ClearStake we’ve built our business on making the Open Banking journey as simple, quick, and easy as possible, which in turn means consumers tend to opt-in almost without thinking. It can be done, and indeed it is the only fair way to do this at all. 

To us, it is clear that Open Banking is the destination. It’s just going to take some people a little longer to get there than others (and they will lose a lot of customers along the way). If you’d like to get ahead of the curve and start delivering almost frictionless affordability and AML checks right now, drop us a line.