Open banking and iGaming: The game-changing synergy.

In the dynamic mix of financial technology and digital entertainment, open banking and the iGaming industry emerge as pivotal players. According to Future Market Insights, the open banking market is projected to hit $158.6 billion by 2032, experiencing a robust CAGR (compound annual growth rate) of 23.2% from 2022 to 2032. While catering to an…

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In the dynamic mix of financial technology and digital entertainment, open banking and the iGaming industry emerge as pivotal players.

According to Future Market Insights, the open banking market is projected to hit $158.6 billion by 2032, experiencing a robust CAGR (compound annual growth rate) of 23.2% from 2022 to 2032.

While catering to an estimated one billion global iGaming users, each with distinct payment preferences, operators find themselves in the middle of compliance, regulation and user experience demands.

As worldwide and European markets mature, the iGaming industry challenge is clear: navigate the intricate web of regulations without compromising the essence of the player experience.

As the world rushes towards a new era of digital transactions and immersive gaming experiences, the synergy of open banking and iGaming stands at the forefront, redefining how we play, transact, and experience the thrill of the game.

Join us on an exploration of the symbiosis between open banking and iGaming. From streamlining KYC and AML processes to ensuring secure account top-ups, open banking emerges as a cornerstone for operators eyeing enduring relationships.

This is not a mere technological shift; it’s a pragmatic look at how open banking transforms online gambling – fostering transparency, personalization, and responsible gaming practices.

Open banking: Transforming iGaming with professional precision

Open banking involves the secure exchange of financial information between banks and third-party service providers, including fintech companies.

In the powerful world of finance, open banking strides in, dismantling the old guard of big banks and opening up consumer data to new possibilities. The result? A smoother, more personalized financial experience for consumers, leveling the playing field for startups and tech platforms.

While fintech frontrunners have long embraced open banking, the gaming industry is just catching on. The impact? Profound.

But there’s more to the story. Open banking turns the gaming arena into a transparent stage. Operators can now keep a watchful eye on financial transactions, ensuring compliance with laws and regulations while preventing fraud. 

Open banking isn’t just transforming the game; it’s revolutionizing it with professional finesse. Trust, transparency, and a tailored financial landscape – open banking is leaving its mark on the future of gaming.

iGaming industry trends

In the dynamic world of online gambling, the landscape is undergoing a significant shift, driven by the surge in mobile device usage and global internet accessibility. Introducing new payment methods has further opened the doors for players to seamlessly engage with online gaming platforms.

A major driver of this evolution is the escalating demand for Mobile Gambling. 

In the United Kingdom for instance, 50% of online gamblers have engaged in gambling activities through their smartphones. 

The Latin American mobile gaming market is expected to grow from $2.67 billion in 2023 to $4.31 billion by 2028, with a yearly growth rate of 10.01%. The increasing use of 5G technology is helping mobile games to thrive in this market. For instance, approximately 70% of Brazilians are engaged in playing video games, mostly on mobile devices. 

Fueled by widespread smartphone usage, lower device costs, and robust communication networks, mobile gambling is becoming the go-to casino game and esports betting platform.

The convenience of mobile-based payment solutions is propelling users from desktops to handheld devices, presenting growth opportunities for businesses.

Operators are taking on roles similar to financial institutions in this fast-paced environment. Crafting payment systems and mechanisms, they grapple with the challenge of acquiring and retaining customers.

Challenges in the iGaming industry landscape

However, with growth comes challenges in the online gambling landscape, demanding careful navigation. We unpack the top 3 challenges and glimpse into the role open banking could play.

1. Online data security concerns

Open banking introduces enhanced security measures, such as secure APIs and standardized authentication processes, ensuring safer and more transparent handling of user data. This can enhance user trust and minimize the risk of unauthorized access.

2. Balancing Anti-Money Laundering (AML), Counter Terrorist Financing (CTF) and  Know Your Customer (KYC) requirements

Operators must delicately balance AML (Anti-Money Laundering)/CTF (Counter-Terrorist Financing) and KYC (Know Your Customer) regulations to ensure the integrity and security of financial systems. 

Operators in the financial sector find themselves navigating a complex landscape of regulations, aiming to balance strict compliance measures and the need for a frictionless customer experience.

In this intricate dance, open banking emerges as a key solution, facilitating seamless integration with compliance and risk management systems, and automating AML/CTF and KYC checks with precision and speed. This not only enhances the accuracy of due diligence but also enables financial institutions to stay ahead of emerging threats and adapt to the evolving nature of financial crimes.

3. Player experience challenges

The player experience faces challenges with lengthy registration processes and slow withdrawals. The call for safe, personalized, and frictionless experiences challenges operators to leverage technology for streamlined processes and effective player retention.

How do you enhance the customer experience in a regulated and fragmented market? 

Open banking leverages technology to streamline registration processes, offering faster and safer onboarding. Account-to-account payments also contribute to quicker and more efficient withdrawals, enhancing the overall player experience.

This not only enhances customer experience but also aligns with regulatory requirements, providing a safe and regulated environment for transactions.

Navigating these trends and trials strategically positions industry players to shape the future of the iGaming industry.

5 Ways iGaming operators can leverage open banking

In the ever-evolving landscape of iGaming, operators are on a relentless quest for innovations that streamline operations and enhance the player experience. Enter open banking – a game-changer that offers a strategic symphony for gaming operators, profoundly reshaping industry dynamics.

1. Fight fraud and stay compliant

Open banking allows for swift and secure access to account ownership data, a pivotal asset in expediting Know Your Customer (KYC) processes for payment providers.

Analyzing transaction history becomes a formidable tool for PSPs in the fight against fraud, particularly crucial in markets with diverse regulatory landscapes like those across Europe.

It leverages KYC data provided by customers, setting trigger values and limits based on customer risk classifications. The system detects fraudulent behavior by analyzing deviations from collected KYC data and historical behavior.

2. Safe and seamless A2A deposits

Say goodbye to redirections and cumbersome payment gateways. With open banking, operators can execute direct payments securely with A2A (account-to-account) payments.

A2A payments streamline the payment process by removing the need for laborious, error-prone data entry. Users can authorize payments directly within their bank app, often facilitated through seamless app-to-app redirection and enhanced by biometric authentication.

A2A payments are driven by open banking that acts as trusted holders of login and transfer credentials, pre-authorized by players, and operators navigate the transaction process seamlessly. The result? A highly secure and frictionless experience for players. 

3. Instant payouts to any account

As players revel in their victories, open banking steps in to offer a seamless exit strategy. Operators can instantly payout winnings to any account, mirroring the method used for funding. This not only fulfills player expectations for swift transactions but also aligns with AML requirements, completing the gaming experience on a high note.

For iGaming operators, open banking is not merely a technological upgrade; it’s a transformative force that propels them into a new era of player-centric operations.

The real-time insights derived from player behavior and heightened security measures create an environment where efficiency meets personalized engagement.

As the industry adapts to the demands of modern gamers, open banking stands as the cornerstone of this evolution.

Its cost-effective nature, coupled with the potential to redefine player interactions, positions open banking as the strategic lever for gaming operators looking to stay ahead of the curve and lead the symphony of iGaming into a harmonious future.

The stage is set, and with open banking, operators are ready to orchestrate a gaming experience that resonates with the rhythm of player expectations.  

Final thought

From transforming player experiences to reshaping operator strategies, open banking is not just a tool; it’s the game-changer the industry needs. As the iGaming landscape continues to evolve, fueled by the unstoppable force of mobile gaming and the promises of open banking, we stand on the brink of a digital revolution.

For gaming operators eyeing the immense potential in the industry, selecting the right payment solution is crucial. It’s not just about the game; it’s about giving players the seamless transactions they desire.

The information contained in this post is intended for informational purposes only, and should not be relied upon for professional advice of any kind. Zimpler does not make any representation or warranty as to the completeness or accuracy of the information and assumes no liability or responsibility that may result from reliance on such information.

Francesca Portoso avatar