Put a block on it

When Barclays announced on 11 December the launch of a feature allowing mobile banking app customers to ‘turn off’ debit card spending with certain types of retailers, the news garnered plenty of media coverage and was roundly welcomed. As well as supermarkets, restaurants, takeaways, filling stations, and premium rate websites and phone numbers, the simple blocking button within the app also applies to gambling, or more specifically gambling websites and betting shops.

GambleAware chief exec Marc Etches praised Barclays in the press release distributed by the bank, whilst adding that with no limits to stakes and prizes, as well as credit cards allowed, it is important to make it easier for people to control their spending. “This [tool] can play an important role in helping to reduce gambling-related harms,” he stated. Meanwhile, Barclays said the initiative will be expanded to cover credit card holders in the near future.

Yet the 325-year-old global banking giant isn’t the first to roll out such a feature in the UK. Challenger banks Monzo and Starling introduced similar transactional blocking for online gambling back in the summer. And as of December, 50,000 Starling customers had switched on the blocking feature. This equates to 15% of the start-up bank’s customer base. “We introduced the feature to support customers who want to self-exclude from gambling and betting institutions,” Sarah Williams-Gardener, head of public affairs for Starling, tells EGR Compliance.

“This is something that would take months if they were to go round every shop and call the different websites, and even then there are new places opening all the time. With Starling, they can block all transactions through the app by switching on the gambling block.” At the moment, users are able to turn the block off if they so wish, although if they do that Starling automatically displays a message with the phone number and web address for the National Gambling Helpline. “We want to encourage those who need help to reach out to them and make them think twice before switching the block off,” Williams-Gardener explains.

New kids on block

Fintech unicorn Monzo reached the milestone of one million current account customers in September, with around 20,000 new accounts being opened every week. Meanwhile, London-based Starling eclipsed 210,000 current accounts by early August – a 500% jump over nine months earlier – and has now reached in excess of 330,000 accounts. These digital-only banks, along with the likes of Revolut and Tandem, are experiencing soaring growth and attracting tech-savvy millennials lured by features such as real-time transaction reporting and free cash withdrawals when abroad. By being agile and not shackled by legacy technologies, these mobile-centric banks are disrupting the staid banking sector.

However, an oft-quoted maxim states that you’re more likely to get divorced than switch bank accounts, while it was reported earlier this year that only around 20% of Monzo customers deposit their salaries into the bank. This would suggest most use it as a secondary bank account. And these challenger banks are still pretty insignificant compared to the scale of the ‘Big Four’ – Barclays, RBS, Lloyds and HSBC – which are responsible for 75% of all UK current accounts. So the fact that Barclays, which boasts over 10 million active online and mobile customers, is the first to introduce merchant blocking could signal a watershed moment and encourage high-street rivals to follow suit.

If that ends up being the case, it could very well lead to voluntary gambling blocks becoming commonplace within banking apps. “I hope it does put pressure on other banks to do the same and it very much should be the norm,” says Richard Wade, who retired last March after 17 years as director of compliance and responsible gambling at Rank Group. “I recall going to the Gambling Commission at least five years ago asking for their support to pressure banks into doing just this. For online operators and players in particular, it would be a great help but has always fallen on deaf ears where the banks are concerned.”

Others question why it’s taken until almost 2019 for a major bank to introduce this form of self-exclusion. “If anything, I am surprised it hasn’t happened sooner,” remarks Joe Saumarez Smith, chairman of Bede Gaming. “I’m sure the government has reminded the high-street banks that they have a social obligation to their customers and that this will become the norm across all banks as soon as they find a way to enable it across their antiquated technology platforms.” He adds: “I personally welcome anything that gives those with problem gambling issues the tools to reduce harm and control their expenditure.”

A problem shared…

Barclays said it introduced the tool to help those with mental health issues and addictions to control their spending. Around 430,000 people in the UK are thought to have a gambling problem and roughly 2.3 million are either problem gamblers or at risk of developing an addiction, according to Gambling Commission data. And unless you’ve been residing under a rock throughout 2018 you can’t fail to have noticed how responsible gambling has been the red-hot topic this year, with the gambling industry coming under heavy fire amid accusations that operators are merely paying lip service to this issue.

Certain operators are trying to be more proactive of late, though, whether it be experimenting with AI-powered solutions to detect and reduce gambling-related harm or Sky Betting & Gaming (SBG) – winner of Socially Responsible Operator at the EGR Operator Awards 2018 – with its new responsible gambling tools. These SBG tools include cool-off periods, deposit limits and a newly presented profit and loss dashboard, as well as encouraging customers to put controls in place when using SBG apps.

Indeed, the Leeds-headquartered firm’s executive chairman Richard Flint – a vocal advocate for the proliferation of responsible gambling tools – describes Barclays’ move as a “very important piece in a broader set of measures to help customers manage their spending”. He adds: “We support any move, such as this step by Barclays, which complements what we are doing and ensures a holistic approach to protecting customers.”

In fact, you’d be hard pushed to find anyone who thought, even in private, that allowing customers to block gambling transactions is a bad thing. “From an operator’s prospective, it’s a helpful move from the banks who are willing to share the burden of responsibility,” says Elena Holmes, responsible gambling analyst at Panserve, which is behind the Marathonbet brand. “Operators are doing their best looking for vulnerable customers, but if the help is coming from the banks then it can only be welcomed.

“Will the other banks follow? Of course they will, because there’s a lot of pressure on banks in how they help vulnerable customers – and one vulnerability comes in the form of gambling addiction, which often starts or ends with anxiety, depression and financial hardship and bad debts, which means a loss for the banks.”

The avalanche of horror stories in the media of late around gambling addiction and the harm it can cause have been a sobering reminder of the gambling industry’s responsibilities and its shortcomings. And now it seems the financial institutions that facilitate gambling transactions are finally showing a willingness to do their part and share the burden of responsibility. With one of the Big Four putting its head above the parapet and introducing blocking for certain merchants and services, it seems it’s only a matter of time before another major bank follows Barclays’ lead. And that has to be a good thing.