Regulation Technology, or RegTech, is increasingly becoming an integral part in ensuring operator compliance across the gaming industry.
Speaking to Peter Murray of Alexem Services, he explained that artificial intelligence will continue to grab the attention of the iGaming industry in the next few years, and that regulation is racing to try to keep up with both the demands of their individual jurisdiction and global fraud and AML compliance structures.
So for those that don’t know, can you give SBC readers an overview of what Alexem Services specialises in?
Alexem Services is a consultancy specialising in Identity. I have been in this space for over a decade and we focus on regulated markets and the global Gaming sector. We have worked closely with governments, regulators, operators and key industry stakeholders to define best practice and ensure innovation in the areas of data and technology.
The key areas at the moment are working with technology providers as they adapt to provide solutions that fit and help scope the many regulatory regimes and then engaging and empowering global regulators in order to help them understand, embrace and implement evolving Regtech solutions. I have testified in the United States and presented globally on Issues of Identity, KYC, AML, fraud, self-exclusion and responsible gambling.
We also run the Gambling Ramblings podcast a platform where industry stakeholders discuss the gambling sector and the many challenges it faces.
If you had to choose one type of RegTech that will undoubtedly disrupt the gaming ecosystem in the coming years, what would it be and why?
I don’t think there is one single solution that will completely disrupt the sector. It will be how we combine customer experience (UX) with solutions. I think the obvious one that interests everyone right now is what artificial Intelligence (AI) and biometrics can bring to the table. What it can do and where the gaps are. Safety and security issues need to be addressed but how AI evolves to address our challenges is fascinating.
If we want to highlight ‘one to watch’ then for me it is voice recognition. Already deployed with AI in Alexa or Siri then it is a solution that is already ‘in play’ but yet to be proposed as part of the Regtech landscape for Gambling. How far are we from sitting at home and asking ‘Alexa, log on and get me the best odds for the game this weekend’
Is industry collaboration in terms of data sharing the way forward when it comes to ensuring operator compliance?
One of my favourite discussion points and it is about much more than just ensuring compliance! This goes to the very heart of rebuilding trust and ensuring the sustainability of the sector. The public, politicians and the media are cynical and distrusting and when other sectors such as Financial services and Insurance routinely share information and data as a matter of routine and best practice it makes absolutely no sense that the industry fails to fall into line.
I am convinced we will get there and maybe the introductions of self-exclusion systems mandating the sharing of data is the first step. However the sector should really embrace this as a force for good. It can add great value as a combined fraud too but I see the real value in the area of safer gambling and sharing data for the benefit of all
KYC has been a big focus in ensuring operator compliance – how has KYC changed over recent years? And what changes do you think we will see in the next few years?
The industry is still clinging on to a KYC process that was implemented over a decade ago. Static, time stamped and limited in its value, it may have had value when there was little choice but this CRA led process now provides a flawed view of the customer given what we can access today. The wealth of data and the evolving technology allows us to do so much more. It cannot be right that we rely on this process when both data and technology have moved on so dramatically!
Regulation is coming to this with a new focus and are starting to recognise the importance of embracing change. The emergence of solutions that access real time data lakes and can focus on areas such as affordability, bespoke messaging and real time engagement means the traditional supplier base are struggling to adapt to and has opened the way for a plethora of new entrants into the identity space.
Be it new data sources, technology solutions or platforms offering services that help combine the two, what is certain is that Identity and the ability to offer a much more holistic view of the customer has moved on. The industry needs to move with it if it is to build trust and ensure sustainability.
The final piece of the jigsaw is collaboration. There needs to be much more of a focus on this area as there will never be one single solution that will save the day. However with competing and conflicting interests from operators and suppliers the regulator needs to step in and mandate a process that genuinely does raise the bar. The regulators also need to do better.
Confusing or conflicting regulation around areas such as responsible gambling produces gaps in the systems that allows standards to be lowered and effective robust processes to be diluted. Regulators need to address this.
Lastly, with the levels of innovation happening at the moment in terms of RegTech, is this the best time to be involved with the gaming industry?
If you are an innovator absolutely it is! Regulation is racing to try to keep up with both the demands of their individual jurisdiction and global fraud and AML compliance structures. They need help and support so if you can’t disrupt the market now then you never will.
If, however, your business model means that innovation is tough to embrace or to implement then your relevance and sustainability are going to be tested. History demonstrates that business moves on rapidly (think Blockbuster/Netfilx) and leaves behind those that can’t adapt to move with it, or look to jump ahead of it.