iGaming has come a long way- from the first online casino game to microgaming in the 90s and, over 25 years, the industry has grown significantly (European Business Review, 2019). Casino revenues in Europe now exceed €20 billion each year and the industry is expected to be valued at €100 billion by the end of the decade (UKTN, 2020). With the adoption of VR, AI, machine learning and blockchain casinos, the future of iGaming looks promising.
iGaming is changing
iGaming is involving more and more technological advancements. VR is being used to give the feeling of being in a physical casino, and to make it easier for players to communicate with each other. AI is being used to prevent cheating, learn customer preferences and provide customer support (Jones, 2020). Online casinos are also using blockchain to ensure fast and anonymous transactions, to prevent manipulation of data and to independently audit the fairness of games (Jones, 2020).
A study surveying 3,000+ regular online gamblers across major european markets found that players want fast payments, instant withdrawals, and to pay by bank transfer (Open Banking Expo, 2020). These findings show that improved payment options are definitely a top priority. This is where open banking comes into play. Open banking presents an opportunity to differentiate and drive customer loyalty by satisfying their transactional desires and needs (Open Banking Expo, 2020).
What is open banking?
Open banking is a banking practice that securely shares financial information, such as consumer banking transactions and other financial data, to third-party financial service providers (Estevez, 2020). Sharing data is done through the use of application programming interfaces (APIs) and only with the consent of customers (The Balance, 2020). Open banking is the driver behind both innovation and competition in the financial industry (Cahill, n.d.).
Why does iGaming use open banking?
Along with technological advancements, iGaming companies have the opportunity to improve their services and match customer preferences when it comes to payment options.
Open banking enables seamless and secure account top-ups, as well as instant payouts to customers through direct authentication and direct payment. Also, open banking allows iGaming companies to fight fraud by accessing account data and analysing transaction history (von Bahr Emilson, 2020).
Some iGaming companies you should know about
Kindred is an online gambling operator consisting of 9 brands, among them are Unibet, Maria Casino and 32Red. The operator uses open banking for their “Play & Withdraw” experience. “Pay & Withdraw” is a service that allows customers to deposit and withdraw money instantly and seamlessly (Bruzelius, 2020).
Monzo was the first bank to introduce a gambling block for those who wanted to control their gambling addictions. The company uses open banking to gain additional data access and enhance their services (Monzo, 2021).
What’s to come?
Due to new and emerging technologies, regulators are constantly reevaluating their policies in order to keep the industry safe. Regulators in Europe are making more strict rules around iGaming payment verification, source of funding and affordability, which is leading many companies to reassess their payment strategies (Leslie, 2021).
The Balance. (2020, October 11). What Open Banking Is and How It Will Affect You.
Bruzelius, P. (2020, September 2). Kindred CX: ‘Pay & Withdraw’ experience delivers on Relevancy, Speed & Trust. Kindred.
Cahill, H. (n.d.). InvoiceFair. The Evolution of Open Banking: Connectivity breeds digital competition.
Estevez, E. (2020, August 27). Open Banking. Investopedia.
European Business Review. (2019, November 15). Five Key Challenges of the iGaming Industry in the 2020s. European Business Review.
Jones, D. (2020). How 2020 Changed the iGaming Industry. Growing Gaming.
Leslie, K. (2021, Febuary 9). Transforming your payments strategy with open banking. iGB.
Monzo. (2021, Febuary 18). We’re running a pilot with TrueLayer to create an open banking powered gambling block. Monzo.
Open Banking Expo. (2020, December 10). Research: Five trends shaping the future of online gaming payments. Open Banking Expo.
UKTN. (2020, August 10). How Changes in Technology and Law Created the iGaming Industry. UKTN.
von Bahr Emilson, M. (2020, July 20). How Open Banking is Revolutionising Online Gambling. Linkedin.