Charles Cohen: "Frictionless checks happen millions of times a day"

We sat down for a deep dive with Charles Cohen, CEO of Department of Trust, whose company shows a way forward for running affordability checks without burdening businesses and consumers. A contentious topic in the United Kingdom and beyond, Cohen believes that there are many reasons why businesses and consumers fear the introduction of this mechanism. The clock is ticking away for gambling operators who have very little time to get to grips with this new area of risk, Cohen says. Will affordability checks be fair and consistent? Can players enjoy gaming without the weight of bureaucracy? We find out the answers to these questions and others with Cohen’s help.

Q: Charles, everyone is talking about the upcoming changes to the way companies will need to screen their customers and carry out "affordability checks" in the United Kingdom. Are those checks to be feared?

No-one has anything to fear from these checks except operators who don’t implement them properly or in time.

From the player side, the main concern has been about privacy. People were concerned that players would be required to share a lot more data, or that operators would end up seeing a lot of sensitive information which isn’t applicable but which they can’t then "unsee".

The way the new regulations have been written shows that the Commission listened to these concerns and have come up with what should be a workable compromise. Most of the time, consumers won’t even know the checks are happening, their credit score won’t be affected, and nothing new will be accessible to operators.

Some risk does remain however in how operators respond to the information they find, and how the Commission evaluates their actions. If players still feel, after all this, that the process isn’t working for them, it could push people out of industry or offshore.

Q: How do you think businesses and consumers will benefit from the introduction of the affordability checks?

The situation in the UK for some time has been pretty chaotic and damaged trust between operators and their customers, and between operators and the Commission.

In the absence of clear rules, each operator has had to develop their own policies and procedures to meet what they believe to be the best way to ensure affordable gambling. A lot of penalties have been issued where the Commission has found them wanting either in design or implementation, but even then there was no consistency of approach. For active players in particular this meant a seemingly random set of responses, from stake limiting through to document requests. You can see why this would drive some people crazy. Winning should be unpredictable, not depositing.

That uncertainty should stop now, up to a point. There will be a common rule stating what checks happen when, and the type of information which operators will ask for. Just as players got used to presenting their ID for registration, they will quickly I think get comfortable with the idea of having to share some financial information at certain points, because the rules say they must. This can only be a good thing – but then the question becomes, will the outcomes of the checks be fair and consistent?

Q: Despite this, there is a lot a doubt that the process can be seamless. The UK Gambling Commission and the government have promised "frictionless" checks but are such checks actually possible?

It was mystifying in the debate around the White Paper that so many people claimed that high quality, completely frictionless risk assessments weren’t possible. It’s not true.

Frictionless checks happen millions of times a day in financial services, in checkout lines and online. Without them we would have no mobile phone contracts, broadband agreements, or installment purchases. Every one of these interactions will involve a real time financial risk assessment based on much the same data as is being discussed for gambling.

Unfortunately for our sector, the problem has really been that frictionless checks sold by credit agencies are not designed specifically to address our use case. Credit checks do a different job – determining the likelihood someone will default on a loan based on their credit performance. Gambling is not looking for snap judgements, but for information to advance a relationship. Another way to look at it is this: ID checks fail, affordability checks advise.

During the White Paper process we showed our checks to government officials and legislators to help them understand the art of the possible and I’m glad the message got through.

Q: How come there are still people who worry that the checks will result in more people turning to the offshore market if we have companies that are ready to take on the challenge and ensure that those checks are indeed frictionless?

I don’t think the problem is the checks themselves, but where the checks fit within a whole relationship between operator and customer. The checks provide information that gets included in operator actions but are never going to be the only factor in a decision.

A good example is communication when the operator has conducted a check and has concerns.

It doesn’t take much effort to find plenty of examples of poor messaging if you trawl gambling social media channels. Some of these communications feel more like demands from debt collectors than a care package from a concerned operator.

Customers who are alienated by this could easily go offshore and accept the risks which come with using those sites.

Clearly, UK operators have no interest in driving players out of the market and the hope is that now the regulations have given clarity, these problems can be addressed.

Q: Do you think there are any pitfalls when it comes to the introduction of affordability checks in the UK?

Number one risk is inconsistency in application.

Say you have wagering accounts with two different casinos and you spend £500 at both over a weekend, triggering a frictionless check. Both see the same information about you, but one decides to limit your spend but the other lets you keep going.

Which operator is right? Will one be fined later when it turns out I couldn’t afford that spend and ended up losing my home as a result?

Understanding financial data is complex. It’s not a simple traffic lights type question. Gambling operators have a very short amount of time to get to grips with this new area of risk and put policies in place to deal with it.

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