On 8th December last year, UK Gambling Minister Chris Philp addressed the GambleAware conference in London. Within a speech challenging the industry around the question of affordability, the following passage stood out as being particularly interesting to me:
“We know data sharing is well established in financial services. I know there are representatives from industry in the audience today, so I want to be clear in my message; now is the time for you to pick up the gauntlet and work closely with both regulators to develop a system that works.”
As someone originally from a fintech background, those words resonated with me. I think the Minister was touching on something that has also struck me over the past year with ClearStake, namely a lack of confidence in the gambling industry when it comes to the possibilities and potential of financial data sharing.
To put that in plainer English, we frequently come across the belief that customers just won’t share their financial data, and that attempting to make it happen will inevitably lead to significant levels of churn - some of it to the black market.
A decent summary of this position was provided by Micheal Dugher, Chief Executive of the Betting and Gaming Council, who in summarising recent research suggested that:
“punters will simply move to the unsafe, unregulated black market online if blanket enhanced spending checks are introduced”
Although this opinion is entirely understandable, it is also an almost perfect example of what some (only some) in the industry are guilty of: spending so long telling regulators and government that customers will never consent to affordability checks that they start to believe it themselves. The good news, for those who want to hear it, is that this is completely untrue. And the fintech industry demonstrates it.
The fintech industry, or at least parts of it, deals in consumer financial data every day. Whether to improve personal finance offerings, offer better service in insurance, banking or payments, or support better lending decisions - a whole raft of businesses and new services has been built on customers sharing their financial information.
That can be via Open Banking or more conventional means. But the experience of these businesses is that customers will share their data if the benefit to them is clear, and the process is easy and reassuring. Every case is different, of course, but all evidence suggests that opt-in rates for Open Banking can reach 40% or even higher, and that number is only going to increase as more and more consumers understand that Open Banking is both safe and their opportunity to access improved services: like cheaper insurance, smart financial management products, or consumer advice on how and where they can save money.
It will be precisely the same in gambling. Sharing financial data is not hard, and customers gain huge value. Not just the ability to bet freely, but also immediate payouts and the knowledge that protections are in place to ensure they stake within their means. In fact research conducted by YouGov on behalf of TrueLayer confirmed that ⅔ of players (65%) wished to use a gaming service that promotes responsible gambling by setting spending caps and limits.
But to make that happen, we need to adopt the attitude that is present in fintech: that customers sharing financial data is an opportunity, not a threat. If handled in the right way, and if we invest time and effort into making it a seamless experience for customers, there is no reason that it needs to be an insurmountable hurdle. In other words, it’s time to stop talking ourselves out of it and start making it a reality that benefits everybody.
At ClearStake we know the gambling industry. Our number includes a few industry veterans and we understand that gambling can be a fun activity for the vast majority of people. We’re also aware that enhanced due diligence (EDD) processes that exist today do cause many customers to churn. We are not pretending this is not an issue, on the contrary we are actively engaged in solving it.
And there is even better news. In our pilot projects we’ve seen excellent opt-in rates for sharing data via Open Banking - possibly because until now the requirement to share physical statements on a regular basis has been immensely frustrating. It really is easier, and higher value customers in particular jump at the chance to put the old ways behind them.
Ultimately, one way or another the affordability checks we already do are going to become more widespread, and required for more customers. When that is the case, let’s learn from fintech and ensure they work for both operators and punters.