The Future of AML: Battle Between Art and Science? – Part Two

Many believe that industries such as finance and insurance are leading the way with AML and KYC. Are there any other industries you think we should be using as a benchmark?

I think not. As an industry, we should look to set our own benchmark. We can definitely take things out of different sectors, finance, for example, however, the dynamic of the gaming sector is very different to finance and insurance. It’s a more risk-based approach, whereas in other industries, their risks are a lot more easily identified. It’s not as risk based, we do one thing if we see X or we see Y, so again, it’s more of science, whereas, we have to interact with clients in gaming. We have to take a risk-based approach, which is an art. So, whilst I believe we can take the best things out of each and every industry, we should look to set our own standards based on what we see. I think what we need to be doing as an industry is really again, identifying what these industries have done well.

So, for example, the finance sector has onboarded open banking. It looks like the adoption’s increasing and even myself as somebody who has recently purchased a home, five or ten years ago I would’ve never been willing to just give a company consent to access my open banking data, but it definitely improved the process of me purchasing. I didn’t have to send in bank statements and didn’t have to send in pay slips or utility bills. I just gave the conveyance authority by banking details and then within 48 hours it had all been approved. So definitely those are areas where we can lean from, but I think we have the opportunity now as an industry to set a benchmark of how we want to move AML and KYC into the 21st century and beyond.

Why do you think the connection between AML and responsible gambling has taken so long to be recognized by the industry?

I think, like most things, change can be resisted and can be a slow process. It’s something that I had been doing research on for a number of years. In 2016, I presented this to the UKGC in terms of the intrinsic link between AML and RG, that intrinsic link where somebody ends up committing financial crime to fund their gambling addiction. It’s something that the majority of the industry has also identified and recognized, but I think in terms of acting upon it, it’s just a case of, again, being able to efficiently get your RG and marketing teams really working in unison and that’s that key of collaboration. At times we have an insular and compartmentalized approach to business operations, but this is something we need to work hard to get away from. True value is created when teams work together.

Post-Pandemic, we’ve definitely sped up that process in terms of our collaborative working. I think it’s just one of those things where change sometimes is a slow process and it’s taken the extreme circumstances of the Pandemic to really get the industry to prioritize aspects such as affordability.  The UKGC has been pushing the single customer view and affordability issues for some time already, but in terms of acting upon it, the impact of the Pandemic was the main factor.

Ray’s final thoughts on the future:

One thing we know for sure is that criminals are always looking for new ways to perpetrate crime and Financial Crime is no different. In fact, financial gain forms the basis of nearly every predicate offence.

I believe the future will go one of two ways when it comes to AML/CTF in the remote gambling sector.  There will either be further regulation of operators if there is a continuation of AML/CTF failings or a complete shift to collaborative working, where operators work within one another to identify and mitigate ML/TF risk player by player. We are already beginning to see this with the embracing of the affordability process and introduction of open banking into the sector.

AML/CTF compliance if not already, will be at the front of every business decision including when looking into new markets. Given my capacity to be able to see things from both an operator and regulatory perspective, I am confident of the latter becoming the future landscape.