Is friction fiction? On the hunt for 'frictionless' checks
During an enjoyable 20-minute conversation with the estimable Nick Luck last week, the subject of ‘frictionless’ affordability checks inevitably arose. That is hardly a surprise, I doubt there is a single more urgent question currently facing the UK gambling industry. And there is plenty of confusion around what the answer will look like.
What was interesting, from my perspective, was how readily Nick agreed that the idea of checks being performed without the consumer knowing was a non-starter. I think that stands to reason. I don’t believe for a moment that bettors are going to be happy with detailed personal financial records being shared with gambling operators behind their backs. That feels like a scandal waiting to happen.
But at the same time, we are being repeatedly assured that almost all financial checks will be ‘frictionless’. Indeed, just last week Andrew Rhodes, in a blog on the Gambling Commission website, reminded us that what is being proposed is “frictionless (my emphasis) financial risk assessments for an estimated 3 percent of gambling accounts”.
Giving further detail in the same article, he added “a more detailed financial risk assessment at unusually high loss levels where it seems proportionate to understand more about the potential risk of harm. These assessments are proposed to be informed primarily by credit reference agency data”.
To me, it isn’t clear that statements like these are particularly helpful. I suppose what both operators and safer gambling campaigners will be wondering is what specifically this ‘data’ looks like, and if Mr Rhodes is so confident in these frictionless checks, why the Gambling Commission isn’t explaining precisely how they will work.
It feels, in fact, as if we are still attempting to please all the people all of the time. As a strategy, that isn’t going to be sustainable for much longer.
Can we really square this circle?
Let’s talk plainly. The ‘job’ of an affordability check at higher levels of spend is two-fold:
- Establish an accurate, up-to-date view of a customer’s finances, and
- Do so in a way that is as frictionless as possible
In ClearStake, we don’t believe in more checks just for the sake of them, but we do believe that the first job is important. If we don’t do this well, we are asking for trouble in future. In fact, if they don’t provide a proper view of a customer’s finances, what exactly is the point of affordability checks at all?
So let’s go further. Job 1 is more important than job 2. Or to put it another way, checks should be as frictionless as they can possibly be, whilst still ensuring that they are doing the main job they were intended to do: protect players based on up-to-date, accurate information.
I would say to anyone following this debate that we should probably stop pretending that entirely frictionless checks are possible, or even desirable. And I would close this update by making two final observations.
Firstly, if the checks proposed by Andrew Rhodes are accurate enough (i.e. they give us a full picture of a person’s financial situation), then surely all the same civil liberties arguments still apply. Angry punters who do not want to share data with a bookmaker will simply opt out when asked for permission to conduct one of these checks - won’t they? Are these checks actually any better for operators at all? I am not sure.
Secondly - and as mentioned in my conversation with Nick Luck, aren’t we all forgetting the (sizable) elephant in the room? Anti-money laundering (AML) legislation exists, and goes far beyond the remit of anybody currently involved in this conversation. Staking significant amounts of money with a bookmaker inevitably invites source-of-funds checks, which in turn almost always require the sharing of financial information.
Or in short, we’re doing all this anyway.
Open Banking enables that data to be shared in a couple of clicks and under a minute. It is as close to frictionless as we are going to get. It gives operators everything they need, and asks nothing of customers that they aren’t required to do for AML purposes already. In fact, it probably makes the existing clunky processes easier.
It would save a lot of confusion, and a great deal of circular conversations, if the right people got behind Open Banking as the clear and obvious approach to take when it comes to delivering affordability checks that solve the problem we are trying to solve, without overly inconveniencing customers.
We will be saying much the same in our consultation response.
