Open Banking is the UK’s response to the EU Payments Services Directive (PSD2); an EU directive requiring banks to share customer transaction data with licensed third parties when requested to do so by the end-user or customer in question.
Introduced in January 2018, it is a regulatory roadmap.
Developed by the Financial Conduct Authority (FCA) and the Competition and Markets Authority (CMA), it was created to help transition the many UK payment services companies towards the endgame of PSD2 compliance.
It enables bank transaction data to be shared via Application Programming Interfaces (APIs), facilitating the transfer of data between the two parties.
Across three different blog articles on the topic, I will set out my thoughts on what ‘Open Banking’ offers to the Betting and Gaming operators here in the UK.
Over the coming weeks, I’ll also provide the many use cases for ‘real-time’ banking data within the gaming space plus, the risks, issues and implications of its potential use.
Giving customers the choice of passing their own financial transaction data on to other licensed gaming operator may sound a scary notion.
Far from it.
With continued ownership of their own financial transaction data, Open Banking affords the customer ultimate control over how and with whom, their financial data is shared.
With Open Banking, you can authorise third-party without having to reveal your login details to anyone other than your bank.
Sharing such financial data via APIs is also more secure than the previous method of screen-scraping because you know exactly what information is being shared.
Also, you can now more easily revoke access. If you don’t want to share your financial data, you don’t have to. The choice remains yours.
Third-party providers need your explicit permission before they access your data through open APIs. That means you don’t have to opt-out – if you do nothing, your data will not be shared without your consent.
So … what does this mean for the Gaming Operators here in the UK?
Firstly, the Gaming Operators can benefit from savings in time & effort no doubt; avoiding the current administrative load associated with compiling and sharing paper documentation including bank statements if used as a means of determining or supporting income assessments / re-assessments.
Secondly, near real-time access to a customer’s statement information enables the Gaming Operator to make quicker, more informed decisions and reduce associated risks from a better understanding of a customer’s income and expenditure profile ‘over time’.
Open Banking will show a Gaming Operator their customers spend profile when compared to previous months say.
Lastly, ‘real’ data on income and outgoings can be more easily integrated with everything else within the customer account or service history to provide a more comprehensive view of affordability. The use of such a rich set of transactional banking data will more accurately reflect the customer’s financial circumstances and their ability to gamble / game ‘more safely’ (should that be an issue).
W2 are exhibiting at the Betting on Sport 2019 event next week (17th – 19th September).
Please pop by stand P7 and say Hi.