Educating consumers and gaining their trust will be key to expanding the use of Open Banking in the gaming industry according to industry experts.

Hosted by the editor of Payment Expert and Insider SportTed Orme-Claye, panellists from KwiffLeoVegasKindred and PXP shared their views on the adoption of Open Banking in gaming as part of a webinar for SBC’s Payment Expert Digital Innovation Day titled Open Banking 2024: Have the goalposts changed?

You can watch the full webinar by clicking here.

Open Banking has the potential to optimise payments in the gaming industry and the experts noted benefits including the reduced cost and improved speed of processing transactions, greater personalisation for consumers and better fraud detection and KYC processes.

Despite the benefits, the adoption of the technology has been a slow process so far and certain regulated markets are in a better place to use the technology than others.

Fredric Hellsten, Manager of Strategic Payments Projects at LeoVegas, said that the Nordic countries, as well as the UK, Germany and the Netherlands, are well placed due to embracing Payment Service Directive 2 (PSD2) and also hosting strong fintech sectors. 

Hellsten added: “Outside of Europe, Australia and Singapore have implemented guidelines and institutes that include Open Banking to get a better adoption. In Australia, they have something called the Consumer Data Framework. And in Singapore, they have even started an authority, the Monetary Authority of Singapore.

“Looking at the US on the other hand, they have a string of innovative fintech sectors and lots of investments in that sector. But they do lack a unified regulatory framework, which means that they are a bit behind compared to Europe.”

Theresa Mallia, Head of Payment Products at Kindred, agreed that the Nordic countries are currently at the “forefront” of Open Banking adoption. However ,she noted that people being “creatures of habit” when it comes to the payment method they use is slowing uptake, and that many don’t recognise Open Banking as an option.

“Even though in the UK the infrastructure and technology is very much there. We see it, at least in our case, in our client’s case, a lot of them still prefer cards and prepaid to the Open Banking Solution,” explained Mallia. “So it’s not just a matter of the technology being there, but also the technology being recognised and the clients being willing to go through that open banking flow.”

There is apprehension among consumers to embrace Open Banking due to the security concerns that arise from banks and other third-party organisations sharing sensitive banking information across platforms.

All of the panellists agreed that it is the job of the industry to educate consumers on the benefits of using Open Banking and also be transparent in how data is used and protected to build up trust in the technology.

Dwaine Thomas, Deputy COO of PXP Financial Limited, said: “I think the key thing is education in all forms and making sure that the messaging is really clear about what open banking is and how it is used.

“I think people need to understand that there are responsibilities from the providers to provide security and make sure that the privacy of their data is maintained. And being transparent about what data is captured, what data is used, and how it’s used, and ultimately how it benefits them, I think is really important. So I think education is the key thing, but making it very clear and concise on how it benefits the end consumer.”

An important part of operators’ considerations is the responsible gambling implications of processes. Open Banking has the potential to improve the player protection and KYC processes of operators due to the amount of data shared between banks. 

Mallia said that the visibility of certain data such as date of birth would allow operators to “further safeguard players” and also ensure that they remain compliant with regulators. 

Hellsten added: “We are exploring a number of products that are available in the industry that we can try to align with the open bank in terms of registration so rather than having to go and do three, four, five steps to actually create an account, we are getting all the information that we require and that is fine also with the regulator. That should also help to make it frictionless for the player.”

Financial institutions involved in Open Banking are required to work with other stakeholders to help push the adoption of it and the panellists discussed the need for all stakeholders to collaborate effectively to make this happen. 

“It’s about engaging with each other and talking with each other. And I think then the main point out of that is to create this ecosystem of interoperability. So the whole system relies on everything working together. So everyone has to work together in a logical sense [and] in a technological perspective. These APIs need to be standardised across the ecosystem. 

“What that means is if we can get to that point where it is very standard, we can use more data points, reduce friction further, but still maximise security. And this is what consumers want, they want the least friction and the most security of their transaction. We can do that.”

Given that education on Open Banking is key for further user adoption, it is important to know whether awareness of Open Banking is growing and if it can grow further in the future.

The panel unanimously agreed that the betting industry itself is becoming more and more educated and aware about Open Banking’s potential. The next step is ensuring the same is done for customers.

Bryan Cherrett, Head of Payments at Kwiff, summarised: “I’m quite positive and optimistic anyway that even from my own experience, the numbers, the percentages, the share has been increasing. And I’m pretty sure that if we are able to pull the rope in the same direction we’ll definitely all make even further traffic share in terms of Open Banking.”

Educating consumers key to expanding the use of Open Banking