A sustainable future for online gambling: how open banking is helping
Find out how open banking can help online gambling and betting operators meet their compliance requirements while improving the experience for players.
Making online gambling safer has been increasingly high on the UK government’s agenda as it sets out proposals to reform gambling laws. At the same time, the gambling regulator has also turned its attention to how gambling businesses follow rules when promoting gambling products and interacting with customers. We take a look at how open banking can help create safer online gambling environments for players, while helping operators meet their regulatory obligations.
What is open banking?Open banking is a way of giving regulated companies secure, limited access to a customer’s bank account with the customer’s express permission. This access is enabled by secure technology called application programming interfaces (APIs). APIs allow customers to:
- Share account and transaction data, for example, to help with affordability assessments
- Make payments and initiate payouts without the need to share card details
How does open banking make gambling safer?Open banking helps gambling operators meet their safeguarding requirements in a more efficient and targeted way. By connecting directly to a player's bank account in real-time through secure APIs, open banking can:
- Enable operators to verify a customer's identity and check that the payment account they are using belongs to them
- Provide a comprehensive view of a customer’s bank account to more accurately assess the eligibility of the customer
- Give customers the option to switch on gambling blocks for open banking payments
Verifying customer account ownershipAll online betting and gambling platforms are required to verify account ownership of new customers, as well as whether those customers can afford to gamble and their source of income. This is intended to prevent unauthorised players and protect those who are vulnerable, while also helping to detect fraudulent account creation and activity.Operators typically carry out these checks by asking customers to submit their account statements and/or identity documents manually or by email. But customers often end up waiting days or even weeks to be verified and may simply give up and go elsewhere. Carrying out checks in this way is also risky: sending sensitive information on non-encrypted platforms such as email or by post can lead to data breaches or information being manipulated or forged. The problems don’t stop there — customers can make mistakes when manually inputting data, which sometimes means legitimate players are incorrectly rejected from platforms. With open banking, operators can verify account ownership in an automated and accurate way. Open banking uses API-based account verification coupled with secure authorisation methods (such as biometric authentication), so operators can be sure that the payment account a customer is registering belongs to them — and this is verified directly with the bank. Since open banking pulls data directly from customers’ bank accounts, it also means fraudsters can’t upload false documents.
Open banking makes the whole verification process much easier and less labour-intensive as input fields are automated and pre-populated by the bank. Operators don’t need to manually cross-reference customers’ identity documentation with the bank’s records, which significantly speeds up the onboarding of legitimate, eligible players.
Providing a comprehensive view of a customer’s bank accountThe UK Gambling Commission requires operators to take into account the regulator's guidance on customer interaction, demonstrating that they’re meeting three key outcomes:
- Identifying people who may be experiencing, or at risk of developing, problems with gambling
- Interacting with them to offer help or support
- Evaluating the impact operators’ interactions have on customers