Open Banking is widely seen as a game-changing technology with the potential to revolutionise the payments landscape. However, despite government and industry efforts to promote adoption , several challenges still hinder its ability to achieve widespread acceptance and reach full potential.
Levan Bluashvili, Deputy Director of the Service Operational Division and Head of Payment at Adjarabet, is set to discuss these challenges at the inaugural Payment Expert Summit in Lisbon later this month.
In conversation with Payment Expert, he shares his perspective on the evolving role of Open Banking in the gambling industry, its potential to enhance the customer experience through more secure and efficient payment methods, and the steps that stakeholders need to take to overcome existing barriers and fully embrace this technology.
Payment Expert: How do you foresee Open Banking enhancing the user experience in gambling, particularly in terms of convenience and security?
Levan Bluashvili: Currently, we offer a wide selection of payment methods on Adjarabet.com, and we are always striving to enhance the security and variety of these options.
This includes adding new payment channels and refining existing ones. I believe that Open Banking, as a modern payment method, enables direct, real-time bank transfers, allowing users to deposit and withdraw funds instantly without relying on traditional card payments or third-party services. This not only speeds up transactions but also increases their security.
Additionally, Open Banking can simplify compliance with regulations like anti-money laundering (AML) and Know Your Customer (KYC) requirements. With direct access to verified financial data, platforms can more easily verify user identities and monitor transactions for suspicious activity.
PE: What are the most compelling reasons for operators to adopt Open Banking?
LB: I believe there are several compelling reasons to adopt Open Banking, and I’d like to highlight a few of them:
– Faster Transactions: Open Banking allows for instant bank transfers, enabling quicker deposits and withdrawals. This enhances the user experience by reducing waiting times, which can be a significant advantage in attracting and retaining customers.
– Lower Transaction Costs: By bypassing traditional card networks and payment gateways, Open Banking can help reduce transaction fees.
– Competitive Advantage: Early adoption of Open Banking can differentiate a gambling company from its competitors. Offering faster, more secure transactions and a personalised experience can attract new customers and increase loyalty among existing ones.
– Better Customer Insights: Open Banking provides access to more detailed financial data, which can be used to personalise the user experience. For example, companies can offer tailored promotions, set responsible deposit limits, or provide financial advice based on the user’s spending patterns.
PE: Can Open Banking influence the relationship between gamblers and operators regarding trust and data transparency?
LB: Absolutely, Open Banking has the potential to significantly influence the relationship between gamblers and gambling companies, particularly in terms of trust and data transparency. ‘
Here’s how:
– Enhanced Trust through Secure Transactions: Open Banking facilitates secure, direct communication between a user’s bank and the gambling platform. With strong customer authentication (SCA) and encrypted data transfer, users can trust that their financial information is being handled safely. This added layer of security can foster greater trust between gamblers and gambling companies.
– Data Transparency: Open Banking gives users more control over their financial data. Gamblers can see exactly what data is being shared, with whom, and for what purpose. This transparency reduces concerns about companies using data without consent, building a more open and trustworthy relationship.
– Reduced Fraud and Chargebacks: With enhanced security measures and direct bank connections, the risk of fraud is minimised. Fewer fraudulent activities and chargebacks mean a smoother experience for users, increasing their confidence in the platform’s reliability and fairness.
Overall, by adopting Open Banking, operators can create a more secure, transparent, and user-centric environment. This can help shift the perception of gambling companies from being purely profit-driven to being responsible partners in entertainment, leading to a more positive and trusting relationship with their users.
PE: How can Adjarabet and the wider gambling industry leverage Open Banking to support responsible gambling initiatives and ensure ethical practices?
LB: By integrating Open Banking, operators can offer a more personalised user experience. For example, they can provide tailored spending limits or reminders based on real-time financial data, helping users gamble more responsibly.
With access to a user’s financial data, Adjarabet can offer personalised spending limits aligned with the user’s financial situation. This ensures that users do not gamble more than they can afford, promoting responsible gambling. For instance, Adjarabet could suggest daily, weekly, or monthly limits based on the user’s income and expenditure patterns.
Furthermore, Open Banking can be leveraged to educate users about responsible gambling. By providing insights into their spending habits and financial health, gambling platforms can empower users to make better-informed decisions. Educational content can be personalised based on the user’s financial data, offering tips and tools to help them gamble responsibly.
By utilising Open Banking in these ways, the gambling industry can not only enhance responsible gambling initiatives but also ensure that ethical practices are at the forefront of their operations. This approach benefits users while also contributing to a more sustainable and trustworthy industry.
PE: What do you think are the biggest challenges to Open Banking adoption in betting and how can operators overcome these barriers?
LB: In Georgia, Open Banking is developing at a relatively slow pace. Although all the necessary legislative requirements and laws were approved more than a year ago, these functions are currently limited to banking applications (mobile banks) and even then, with restricted capabilities.
For now, users can only view information from other bank accounts within their mobile banking apps, such as account numbers, balances, and recent transactions, but transaction initiation is not yet available.
Based on this situation, adopting Open Banking in the gambling industry in my country presents several challenges. I believe some of the main challenges are as follows:
– User Trust and Awareness: Many users may be unfamiliar with Open Banking or sceptical about sharing their financial data with betting platforms. Concerns about privacy, data security, and the potential misuse of personal information could hinder adoption.
– Cost of Implementation: The initial cost of implementing Open Banking can be high, especially for smaller operators. This includes not only the technology investment but also the resources needed for compliance, user education, and ongoing maintenance.
– Technical Integration and Complexity: Implementing Open Banking requires significant technical infrastructure and expertise. Betting platforms need to integrate with various banks, manage APIs, and ensure that their systems can handle real-time financial data securely and efficiently.
– Resistance to Change: Given the challenges mentioned above, internal stakeholders may resist adopting a new system, preferring the familiarity of traditional payment methods.
By addressing these challenges head-on, operators can successfully adopt Open Banking and leverage its benefits to improve the customer experience.
PE: How can operators and fintech firms work together to build up customer trust and familiarity with Open Banking?
LB: First, we should all work together to address the challenges facing the development of Open Banking, including those I mentioned earlier. In this regard, we can launch joint educational campaigns to inform users about the benefits and security of Open Banking. Fintech firms can collaborate with gambling operators to create a seamless and intuitive user experience for Open Banking. This collaboration ensures a smooth integration process, minimising friction for users when they engage with the service.
Additionally, we can introduce co-branded promotions or pilot programs to gather user feedback and use it for future developments.
By working together on these strategies, gambling operators and fintech firms can build strong customer trust and familiarity with Open Banking. This collaboration not only drives adoption but also enhances the overall user experience, making Open Banking a valuable and trusted tool in the gambling industry.
PE: How closely should operators monitor Open Banking’s development in the financial services sector? Is Adjarabet keeping a close eye on this?
LB: Yes, we have been involved in the Open Banking process from the beginning, including the development of regulations and beyond. We are currently collaborating with banks and other Payment Service Providers (PSPs) to develop Open Banking and offer new services to our customers, which will be beneficial for both them and us.
Additionally, AdjaraPay, which is part of the„ Adjarabet Group and holds a PSP licence, is a member of a fintech association. This membership enables us to stay actively involved in the development of Open Banking and stay updated on the latest market trends, such as technical innovations, regulatory changes, and compliance.
PE: What do you hope Lisbon attendees will gain from this session? What do you think the key takeaways will be around the topic of Open Banking?
LB: I believe this summit will provide valuable insights into Open Banking across various countries, highlighting the challenges and opportunities for its future development. Additionally, it will enhance our understanding of the value of Open Banking and offer practical strategies for its implementation.
The overall goal is for attendees to walk away with a holistic understanding of Open Banking’s potential, practical steps for implementation, and the motivation to use these insights to drive their businesses forward in a responsible and customer-centric manner.
On a more localised note, I personally hope that this summit will spark significant interest in the development of Open Banking in Georgia. By fostering greater collaboration among companies and stakeholders, we can advance Open Banking initiatives in the region and drive meaningful progress.
The exchange of ideas and experiences from various markets will provide us with the knowledge and inspiration needed to enhance our efforts and position Georgia as a key player in the Open Banking landscape.
The Payment Expert Summit, part of the upcoming SBC Summit, will be held at the Feira Internacional de Lisboa from September 25-26.
