Will consumers really share bank details in order to bet?

What better way to ring in the year than by reading this excellent summary by Scott Longley for iGB, of where we are at present in the interminable affordability debate.

A number of nails are hit firmly on the head, not least of which is the current (slightly wilful) failure of the industry to understand the direction in which the wind is blowing, and take proactive steps to control and manage the process on that basis. 

As we’ve said before, putting our collective fingers in our collective ears and hoping the whole thing goes away really doesn’t feel like a strategy, certainly not at this late stage. Having said that, I do feel the industry itself is ahead of the BGC (which it could be argued is just doing its job). Most operators we speak to are aware that change is both inevitable and something they need to plan for, starting yesterday.

But here I want to talk about something slightly different, which is the oft-quoted conclusion that consumers will not share financial information in order to be able to gamble, or as the article puts it (summarising this report sponsored by the BGC) “nearly 70 per cent of people who place a bet said they would be unwilling to allow regulated firms to carry out compulsory affordability checks to prove they can afford to wager”.

This is a claim that crops up repeatedly in one way shape or form. But how true is it, really?

There’s a couple of things worth saying about the 70% figure from the EY/BGC report before we go any further:

• Firstly, consumers are notoriously unreliable when it comes to any question about what they will or won’t do in the future, or indeed what they do or do not want. In general, data based on survey responses to ‘what would you do if?’ type questions is something close to worthless when it comes to really predicting the future.
• Secondly, there remains a huge amount of confusion amongst consumers about what affordability checks really mean, why they exist, and what their relationship with other checks (KYC, source of funds, etc) really is. You only have to spend a few minutes on social media to realise this is the case. Many punters appear to confuse affordability checks with staking restrictions applied by operators, for example. Again, I have a hard time really trusting data like this when there is so much obvious confusion in the market.

So if we can’t trust what people say, what should we trust? At the risk of being glib, and to paraphrase Jane Austen, we should probably look at what they do.

The empirical evidence

Here the evidence is infinitely more encouraging.

It largely comes from three sources, namely:

• Our own experience of opt-in rates when it comes to sharing financial data via Open Banking
• Opt-in rates in other industries when sharing of financial data is a requirement
• The experience of the gambling industry itself with similar (if not identical) requirements such as ID verification

Before saying any more we should acknowledge that some bettors will not want to share financial data. Nobody is claiming there will be no issue. The question is how significant that issue is. 

So what does our empirical evidence tell us?

First, our own trials suggest that opt-in for sharing data via Open Banking is over 50%, and this is only Open Banking (does not include paper statement sharing), and only with minimal effort to convert customers to sharing (for obvious reasons: it’s a trial and no operator wants to annoy customers unnecessarily).

To put that in context, this is ALREADY a figure well in excess of that projected by the BGC, and in an environment where sharing financial data in this way is still relatively novel. We suspect that number can only increase over time, which brings us to…

Second, the evidence from other industries also suggests that whilst consumers might be initially reluctant to share financial data to access products or services, they usually do. The most obvious example is property. To take the admittedly extreme example, few if any decide against buying a house because they will need to share financial data to access a mortgage. And by way of a more realistic analogy, few decide against renting an apartment when asked to do the same - something that is increasingly commonplace these days.

More generally, acceptance of Open Banking continues to rise across the board. I wonder are the BGC so insecure of the quality of products provided by their members that they feel gambling will be an exception to these trends? As someone who likes to bet on occasion, that is not an opinion I would share. The consistent evidence is that when the consumer feels Open Banking will benefit them, and they understand that they are in a clearly-scoped, clearly defined process, they are happy to share data. I believe the same will apply to gambling, and the truth is that many operators will tell you the same thing.

Lastly, let’s remember the industry’s own experience around KYC and identity verification. Those of us with long enough memories can remember the dire warnings around the millions of casual punters certain to be put off by having to provide photo ID to bet. In 2023, and with the number betting online still at record levels, we should at least be aware that prophets of doom are not always accurate, even if they attract plenty of column inches.

The conclusion? It’s simple: Yes, people will share their financial data in order to bet safely with a sustainable, responsible operator. 

That doesn’t mean you can expect them to comply with onerous, complicated processes, in which they have to spend time downloading and uploading statements and wait days or weeks for a decision. It also doesn’t mean you don’t have to make an effort to ensure they have confidence in the process. After all, we know from the status quo that asking for financial data leads to churn.

The real challenge is to make the process as easy as possible for the consumer. And that in turn means engaging proactively with the challenge rather than hoping the requirement goes away.

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