Taking Sustainability to Heart: Know Your Customers to Care for and Retain Them

Written By:

David Pope, Marketing Director, HooYu

I was waiting to pick up my suitcase at the baggage carousel at the airport in Malta earlier this year and I couldn’t help but notice that the gaming advert I was staring at used the strapline “At Kindred, we play responsibly”. And only the night before, I had been watching the footie at home, and the gravelly tones of Ray Winstone enthused in a bet365 ad “At bet365, we gamble responsibly”. So, as a starting point, I want to commend the industry for starting to build sustainability into its DNA. Here are my views on how the industry has been on a journey to take sustainability to heart and where it can go further to really look after their customers in the long term.

Regulators are firmly driving the sustainability agenda

The team behind HooYu has been working with gaming operators to equip them with Know Your Customer checks since the first remote regulations came in way back in 2004. We’ve seen a lot of change in that time, but it does seem that the pace of change is increasing, both in terms of what regulators are now asking, the size of fines they are imposing and the level of sophistication that operators are building when it comes to age verification, preventing financial crime and removing gambling harm.

2019-2020 was a tough year for the gaming industry, even before the advance of Coronavirus put a halt to sports betting markets. The last 18 months have been dominated by increased KYC regulatory pressure on gaming operators. In May 2019, the UKGC introduced new KYC requirements and as the year progressed, operators were tasked with further requirements to better understand affordability, source of funds, source of wealth and connections to problem gambling.

KYC compliance has to be sustainable from an acquisition perspective too!

This issue of EI Industry News is about gaming operators taking sustainability to heart to look after their customers better. But on the flip side, operators need to perform KYC in such a way that it doesn’t cause customers to drop out of a cumbersome sign-up process. Or to churn if they are subjected to a poor protracted experience to evidence source of funds.

To do this, operators and KYC providers, such as HooYu, are now turning their attention not just to the identity verification tech under the hood, but also to the UI and UX tools that can be employed to whisk the customer through the KYC journey and minimise friction. What does great UI and UX look like in the onboarding process? Dynamic guidance to help the user provide the right document; automatic language detection to make it easier for the user to understand what is being asked of them; reminders and notifications to enable the user to come back later if they get distracted; design for accessibility for visually or physically challenged users; multiple paths through a KYC process so that digital natives can whisk through whilst older user need more instruction as to what do next.

The operators that will increase their GGY will be those that use clever UI and UX design to curate a great digital KYC journey, whether that be at deposit, payout or later trigger.

KYC needs to constantly evolve to sustain age verification and financial crime controls

Going back again to 2004, to the early days of KYC, what passed then for age verification and financial crime controls was a simple database check to confirm, name, address and date of birth. This rudimentary control gave confidence that the customer had provided real details, but not that they were really where who they say they are. In today’s age of data breach, checking a database to confirm identity really isn’t the defence that it used to be.

As such, operators now need to be able to orchestrate a wide range of KYC technologies beyond positive and negative database checks, to include ID document validation; liveness detection; facial biometrics; digital footprint analysis; address proofing and geo-location. And these technologies need to be orchestrated using identity confidence scoring in a way that 2+2=5 to really stay ahead of financial crime.

Is it time to evolve from KYC to UYC to further the sustainability agenda?

In the course of our work with both operators and regulators helping them to react to industry challenges, we decided the time was right to coin a new term - UYC or Understand Your Customer. As the scale of the problem gambling challenge grows, and regulatory pressure increases, it became apparent that traditional KYC was not enough. Both operators and regulators are looking to do more than just skim the surface when it comes to knowing their customers, they want to understand them.

What does this mean in practice? What the regulators are driving at is that operators shouldn’t set gambling harm controls in a one-size-fits-all manner. Instead, the operator should better understand gambling harm at a granular customer level. Behavioural customer profiling should be preceded by demographic customer profiling. For example, a 21-year-old user home-renter that has a payday loan account should be set lower deposit/wager thresholds compared to a 47-year-old home-owner in certain income demographics. That simplifies the picture but that’s the kind of UYC that operators need to drive towards to be able to sustainably maintain customer relationships.

Will operators take sustainability to heart without further regulation?

So back to the starting point of this article, how ingrained into operators’ DNA is the sustainability agenda? Is what they say in their advertising what they are putting into practice? In recent months we’ve surveyed lots of operators to understand their ability and willingness to score both demographics and behaviours to trigger gambling harm controls. Unsurprisingly smaller operators have less ability to implement player sustainability scoring, whilst larger operators have already embarked on these projects.

In a poll we conducted asking operators when would they like to conduct affordability checks against payday loan registers or financial stress sources such as bankruptcies and county court judgments, 77% of operators said they wanted to conduct such checks at the outset of the customer relationship, rather than when the customer was being investigated at a later date for problem gambling.

Having worked with gaming operators for the last fifteen years I think we can be encouraged by the journey the industry has been on and where we’re looking to go next when it comes to successful customer onboarding and sustainable customer relationships.