The four months of global lockdown has seen several regulators place temporary player restrictions across licensed gambling marketplaces.
Facing further regulatory scrutiny, David Pope Marketing Director of digital customer identification solutions provider HooYu tells SBC that betting would be foolish to think of new KYC demands as pandemic stopgap measures.
SBC: Hi David, great to catch-up. Are you surprised by the UKGC’s ‘lockdown measures’ asking operators to increase customer interventions, player monitoring, due diligence and affordability checks?
HooYu: Hi SBC… no I’m not surprised at all. That’s their general direction of travel, to drive their licensees to make sure that each customer is looked after and considered by each customer’s personal circumstances, not just by how much they bet,
I know the industry is hurting with the lack of sports markets but it’s healthy to see regulators regulating and identifying market risk. In the long run looking after the customer is what will keep the gaming industry buoyant and help ensure continual long-term growth. Sadly, there wasn’t enough of that in 2008 when we saw the last significant economic shock.
This is something that we will see more of from the UKGC and other regulators. I see a very near future where the term Understand Your Customer is as common as Know Your Customer.
SBC: The UKGC has asked for operators to revisit their framework on triggers and consider their customer base and their disposable income levels as a starting point for deciding intervening actions… Can this broad remit be fulfilled by incumbents?
DP: Only partially. Operators tend to only use customer behaviour triggers such as withdrawal reversal, velocity, spend, loss chasing etc that lead to customer outreach, cool-off offers or limit setting to trigger player review or outreach. Once an operator conducts Enhanced Due Diligence on a player then they start to look for negative financial indicators. However, at present operators don’t have the tools to programmatically assess each customer’s financial situation before deciding thresholds at which problem gambling triggers are set.
SBC: Focusing on KYC. Can a betting operator gather relevant data on consumers who have likely been disrupted in such a short period of time (daily habits, spend, income,)?
DP: It’s tough for gaming operators, they’re don’t have access to the same sort of financial insight as financial services providers do. One of the ways that HooYu helps solve this for gaming clients is to use our UX and UI tools to reach out to the customer to ask for copies of payslips, bank statements or other documents that help understand a customer’s source of funds.
SBC: Operating under unprecedented circumstances. From your experience, how has COVID-19 changed the roadmap for KYC and compliance tech development?
DP: Firstly, the reduced customer activity and diminished sign-up flow has made the efficiency of the KYC process even more important. More than ever now, operators need to work with a partner that helps them optimise the success of their KYC process, not just give them the tech to tick the KYC regulation box.
Secondly, the KYC process is evolving into what I call UYC, namely Understand Your Customer. Again, operators need to work with a KYC provider that enables them to go a little deeper to reveal negative financial indicators or address links to known problem gambling or self-exclusion cases.
SBC: Finally, as industry mindsets focus on recovery strategies, what core dynamics and factors should betting leadership be focused on to ensure long-term stability?
DP: Stable long-term growth is more likely when we minimise the chance of seismic shocks. True, there’s no way we can forecast the next Covid-19, but it’s certainly time for regulators, operators and their tech partners to come together to examine how we can help evolve KYC to UYC.
At HooYu, we’re designing the future of gaming KYC/UYC and I’m keen to hear from operators what they want so please do email me at [email protected] with your wish list.