Sending identity documents can often be tedious, time-consuming and potentially risky.
James Elliott, Director of Legal at LeoVegas Group, shared his personal experience with the audience at the Payment Expert Summit in Lisbon, describing the steps he had to take to verify his identity in order to attend the recent event in Portugal.
Elliott wasn’t simply venting about the process – he was one of three speakers discussing the upcoming digital ID framework in the European Union (EU). This framework is designed to address exactly the kinds of issues Elliott experienced, introducing a digital wallet that aims to give all EU citizens access to a secure, unified digital ID by 2030.
This digital wallet will allow individuals to seamlessly verify their identity and obtain important documents, such as driver’s licences or medical prescriptions via a singular platform. The EU’s vision is to create a system where users have control over their ID and personal data, allowing different levels of access depending on the service or interaction.
However, the question posed to Elliott, Charlotta Shelbourg, Director of Product at Kindred and Peter Murray, Director of Strategy for Betting and Gaming at Mitek Systems, was questioned whether this framework presents a significant opportunity for operators in the gaming industry.
Since the framework is identity-based, it is expected to help operators streamline the onboarding process, which has long been time-consuming. Murray noted that this process hasn’t evolved significantly, even with the advancements in technology, but maintains that this framework could be a “fundamental game changer”.
The panel stated that the benefits of this framework extend beyond operators, as most importantly, it will benefit consumers. This is crucial, as widespread adoption hinges on consumer acceptance, a topic the speakers addressed later in the discussion.
For consumers, the digital ID framework promises significant benefits by granting them enhanced control over their personal data. Individuals will have the power to determine what information is shared, with whom and when, ensuring that their privacy is safeguarded.
This approach not only looks to bolster security by minimising the risks associated with sharing sensitive documents through traditional means, but it also accelerates transactions, making them quicker and more efficient.
With a unified digital wallet, users can verify their identity across various services and jurisdictions in an instant, eliminating the lengthy processes of the past. Ultimately, this system aims to empower consumers to take charge of their information and take the power from third-party companies.
However, while this framework sounds promising on paper, there are still concerns and challenges that need to be addressed. One of the most significant worries, especially in light of recent discussions about fraud in the UK, is the risk associated with having all personal data stored in a single wallet.
Elliott said: “I think (digital IDs) are also potentially very vulnerable because if you’re putting all of that info in one place we’ve got to make sure the person providing that has got security because that will be the biggest target for hackers and identity crime.”
The speakers mentioned that, in addition to implementing top-notch security measures, it is crucial to reassure customers about the safety of their data. This reassurance stems from a foundational level of trust – something that is essential between the customer and operator.
Operators have observed that players are often reluctant to share their personal data when placing bets, particularly with the rise of Open Banking. Shelbourg highlighted that this hesitance is partly due to the perception that it feels “intrusive” to provide such extensive information for a small wager.
Shelbourg and Murray discussed that a solution to this problem alongside education will be branding, making sure that your company’s brand is trustworthy and reliable.
Demographics were also a significant topic of discussion regarding the challenges to adoption. Similar to many emerging technologies, older generations tend to be more cautious about using them, and in some cases, their apprehension is justified. This observation aligns with statistics reported by various industries concerning Open Banking adoption rates.
These rates will vary based on demographics and the influence of other organisations adopting these systems. Shelbourg pointed out that if large state-owned banks and institutions embrace the digital ID framework, the rollout will happen “quite easily.” However, if only gambling companies are involved, it will likely take significantly longer to achieve widespread acceptance.
In addition to improving the onboarding process for operators, the panel discussed several other areas where the digital ID framework could have a positive impact, such as enhancing fraud prevention – particularly regarding bonus abuse – and addressing the contentious issue of cross-border jurisdiction.
Since this framework will be managed by the EU, it presents a unique opportunity for standardisation. This is particularly significant for the gambling industry, which typically faces a landscape of varying rules and regulations across different markets.
However, this technology may open the door to standardisation discussions, which Elliott believes won’t have much influence on the gambling sphere.
He said: “You rarely get a Spanish player in a Spanish location wanting to go and play on an Italian gaming site”, adding that this also isn’t allowed by many operators.”
One significant shift this framework could bring to the gambling industry is the impact on identity companies and third-party providers, such as Murray’s Mitek Systems. These companies may need to consider offering similar solutions, but they’ll be competing against a free option provided by the EU.
“If you’re a current identity provider, you’ve really got to have your eye on this. It might be five years, it might be 10 years, but if you’re doing nothing your business model is fundamentally under threat,” Murray concluded.
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