The first article of the ‘Demystifying Affordability’ series sets the context for affordability in Great Britain. This piece discusses the importance of automating affordability processes and adopting a layered approach for operators in the tech-innovation industry. The next article will address common concerns and misconceptions surrounding affordability.
In its guidance for remote operators during Covid-19, the Gambling Commission emphasizes the need for operators to automate their affordability process. The Commission advises a three-step approach: ‘Identify, Interact, and Evaluate.’ Operators should identify customers at risk of experiencing gambling-related harms, interact with them to minimize these risks, and evaluate the effectiveness of their actions. Automating affordability controls is crucial for early screening and identifying vulnerable individuals.
The Gambling Commission highlights that operators often act too slowly and set affordability thresholds at unrealistic levels. Manual affordability checks conducted hours or days late may already be too late to prevent gambling-related harm. Implementing robust automated affordability controls not only meets regulatory expectations, but also improves efficiency by reducing manual due diligence and customer interactions.
Proposed changes may require operators to conduct affordability checks with set thresholds, potentially as low as £100. Some operators already include affordability checks during the customer onboarding process, using non-intrusive checks on registration or first deposit. Conducting high-volume checks early in the customer journey and delivering them in real-time enables tailored automated interactions.
Operators should take a risk-based approach and escalate the level of affordability assessment at different stages in the customer journey. Non-intrusive checks can be seamlessly conducted in the background at the beginning of the journey, while more invasive checks requiring sensitive financial information can be conducted later on or when the customer wants to increase their spending limit.
Instant checks are important to ensure operators comply with real-time protection requirements and provide a frictionless onboarding experience for customers. Non-intrusive affordability checks based on open data do not require customers to provide highly sensitive financial information.
Screening for vulnerability early in the customer journey allows operators to set suitable protections in real-time. Derogatory data registers and affordability estimates are used to trigger automated interactions, which can include safer gambling messaging, reality checks, or limits.
Operators must record their interactions with customers and create a clear audit trail. Automating this process enhances transparency and allows operators to explain their treatment of customers to the regulator.
Considering affordability early in the customer journey not only fulfills regulatory requirements but also enhances the customer’s experience. Personalized interactions can be tailored to individuals, offering increased protections for vulnerable customers and uninterrupted play for those gambling within their means.
Enhanced affordability assessments are necessary for customers who breach initial spending limits or display indicators of harm. These assessments can involve open source data checks, customer-provided information, or verified source of funds or wealth documentation, but must balance accuracy with customer privacy and convenience.
A layered approach to affordability is resource-efficient for operators as it relieves pressure on compliance teams. Early-stage affordability assessments inform the need for further checks, ensuring resources can be allocated to customers who require them most.
