Preliminary findings from the UK Gambling Commission’s pilot of frictionless financial risk assessments show that a frictionless examination was possible in 95 per cent of cases.
This means that the data shared by operators was “successfully matched” by credit reference agencies, which would allow a financial risk assessment to be returned to the operator in a frictionless manner.
Over 530,000 inactive accounts were probed to get an idea of the proportions of customers that might be able to receive a frictionless check.
Of the five per cent of assessments that were “unmatched” between operators and credit reference agencies, less than one per cent were due to data formatting issues, invalid data or duplications in the data provided to credit reference agencies.
In the remaining four per cent of the assessments which required a deeper, more invasive check, the credit reference agency was unable to identify the customer and/or no information was available.
Helen Bryce, the Gambling Commission’s director of major policy projects and evaluation who is leading the pilot, said it is “encouraging” that the proportion of assessments that could not be conducted in a frictionless manner in stage one was lower than the white paper estimate.
But she added that the industry must “wait for full pilot and data collection findings to get a true estimate.”
Stage one of four in the pilot is now complete. It asks what proportion of those high-spending customers checked could get a frictionless financial risk assessment if they were introduced.
Stage two will look at how quickly credit reference agencies could return a financial risk assessment before stage 3 will ask if using credit reference data “meaningful for understanding of an individual customer’s current or imminent overall financial risk and financial vulnerability.”
Stage four will look at implementation issues and how the data could be presented to operators to help understand the level of financial risk or vulnerabilities associated with individual customers. It will ask how operators could build financial risk assessments into their overall customer interaction processes.
Bryce said stage one already has some learnings for certain operators to implement based on the assessments which could not receive a frictionless check.
“In considering how many customers could receive a potential financial risk assessment, operator data quality can play a role in reducing friction,” she said.
“Operators can take steps to reduce duplicate accounts and rectify incorrect data fields to improve data linkage rates.
“Credit reference agencies have systems in place to support this data cleansing in a live environment, should this proceed to implementation.”
The pilot is taking place in three stages which will run until April 2025, with reporting and assessment of the full findings, alongside other data and evidence, set to be released.
