The Gambling Commission (GC) has said 97% of financial risk assessments during its latest pilot were “frictionless”, up from 95% in the first tranche of the beta testing, claiming the data shows a “positive” trend.
Assessments are being tested via a handful of major operators in a closed loop system to identify high-spending customers who could be having financial issues, with the GC adding it is “not another way of saying ‘affordability checks’.”
In its latest update, the GC confirmed that not only is stage two complete but stage three has also come to an end, with reporting currently taking place. Stage one was completed in February.
In regard to where the pilot process is currently at, GC director of major policy project and evaluation Helen Rhodes said: “Stage one looked at a cohort of inactive customers, while stage two looked at active customers.
“Stages one and two both tested customer accounts which had – during a set historical period – met high-spending thresholds.
“The account details were shared with one or more credit reference agencies and they provided a financial risk assessment at the point the threshold was met. This means the pilot is testing what financial risk indicators were present when the account met the high spending threshold.
“As a result, the credit reference agencies are replicating the data returns to operators as close to automated or live implementation as possible.”
On what stage two revealed, the regulator detailed that 1.7 million assessments took place across three credit agencies in relation to roughly 860,000 accounts.
In stage one, 95% of assessments were deemed to be frictionless by the GC, increasing to 97% in stage two – this is compared to the 80% that was estimated in the white paper into the Gambling Act 2005 review.
All three credit agencies were able to conduct frictionless assessments at a minimum of 95.57%, with the percentage of unmatched assessments falling from 5% in stage one to 3% in stage two.
Likewise in stage two, the regulator noted that operators would be unable to meet the requirements in a frictionless way for one out of every 1,000 customer accounts.
The white paper had suggested this would be around six in every 1,000 accounts.
There was also a reduction from less than 1% to what was referred to as an “invalid rate” in relation to issues in an operator’s data provided to credit agencies, such as “data formatting issues, invalid data or duplications in the data provided to credit reference agencies by operators”.
Due to there being a continuation of operators seeing different results from different credit agencies during stages one and two, and not knowing why, the GC said this would be a key focus during stage three’s analysis phase.
The pilot’s focus centred on four core pillars, including what portion of checks would be frictionless, how quickly these checks would take place, if the data being used is meaningful and how operators could eventually build risk assessments into their models.
Rhodes added: “These further findings from the pilot have helped us understand the extent that assessments could be conducted in a frictionless manner, which is an important success criteria for the pilot, but not the only one.
“Building on our staged approach to the pilot, we are now further exploring data consistency across credit reference agencies, as well as exploring options to focus identification through financial risk assessments of the most severe financial difficulties.
“We will also continue work to support operators to consider how they could support these customers. Financial risk assessments are not designed to be acted on in isolation, as that would fail to balance the financial risk alongside everything else that is known about the customer.
“Data-sharing for stage three of the pilot completed on 30 April, and the Commission has moved to an analysis phase which will run into the summer period.”
The post GC reports 97% of financial risk assessments in latest pilot were “frictionless” first appeared on EGR Intel.
Regulator reports two percentage point increase in frictionless assessments, while insisting it is not proposing any regulatory requirements for affordability checks
The post GC reports 97% of financial risk assessments in latest pilot were “frictionless” first appeared on EGR Intel.