Chris Lees, Research Officer, Money and Mental Health

Three ways banks can maintain the momentum for supporting customers experiencing gambling-related harm

18 January 2022

When a person is struggling with a gambling problem there are often only two organisations that know: gambling companies and their bank. This is something we’ve said a lot in recent years but it’s worth repeating. It’s one of the reasons why we’ve spent two years working on a project exploring how banks and building societies can support customers who might be experiencing gambling-related harm. 

This extensive work, which has been supported by the Gambling Commission, has included running three workshops, holding two conferences and producing a best practice guide. We found that, while banks have taken some positive steps and want to do more, there are some key barriers that could make this harder. Today we’ve published a new policy note that looks closely at three of these challenges and what is needed to overcome them.

Building robust gambling blocks

One of the key things a bank can do to support its customers is develop a gambling block that allows them to stop any spending from a debit card on a gambling site. This can be a really important extra layer of control for people struggling with gambling, alongside other self-exclusion tools. But during our project we heard from both experts by experience and experts from banks about ways that people can get around these blocks and continue to gamble even after switching one on. Banks can counter this by adding in extra ‘friction’ to the block so someone can’t just switch it off and gamble straight away, but might have to wait a few days to give them time to think the decision through.

However, some of the loopholes to the gambling block are more complicated and need action from banks, new payment providers, regulators and gambling companies. For example, people can now pay to gamble through a bank transfer but gambling blocks can only stop payments made through a debit card. We think this gap can be closed but it needs collaboration between the banks where the payments come from, the companies who facilitate the payments and the gambling companies that receive them.

Dealing with gambling-like products

While our work has mainly focused on gambling activity that is regulated by the Gambling Commission, we were made aware of the increased presence of products and activities that shared many similarities to gambling. This includes loot boxes, where someone can spend money in a game to get a random reward, and risky investments like cryptocurrency and foreign exchange trading. There has been increased attention in recent years on the risks of these products and several academic studies have found links between them and problem gambling. When we asked our Research Community about these products, we discovered that while not many had used them, those that had felt they were very similar to gambling.

 “When buying them, it’s similar to gambling – the thrill of the ‘risk’ and not knowing what you’re going to get, and the good feeling afterwards is short lived and I start to regret spending money. This can become like a vicious circle where I buy more to make myself feel better. Or another thing with them is if you don’t get anything good so you end up buying another. It can be addictive.” Expert by experience

One of the key things that is needed is clarity over which products are regulated and by whom. Banks can play a role here and use what they have learnt so far from their work on supporting customers struggling with gambling. For example, they should work with expert organisations to train some of their staff to be aware of the signs that someone is struggling with loot boxes or risky investments and how to help them.

Using transaction data

Banks have access to a considerable amount of customer transaction data that they could use to spot signs of gambling-related harm and offer support. We found that banks see the benefits of using such data but are wary about how customers will react and concerned about data protection. Our previous research shows that half of people (51%) say that the benefits of banks monitoring their data outweigh the risks, compared to just one in ten (11%) who disagree.

“If bank statements show lots of outgoings to gambling sites, perhaps it should be part of their duty to notify the account holder of the amount they are spending, and offer support. Even if it is as simple as some leaflets through the post. Just something.” Expert by experience

Data protection is a complicated issue and we believe that the Information Commissioner’s Office, the regulator for data protection, and the Financial Conduct Authority, which oversees the financial sector, should issue joint guidance to help banks understand how they can use transaction data within data protection rules.

Sustaining ambition

As this two-year project comes to an end, it’s crucial that the momentum we’ve seen build during that time is not lost. Financial services firms must continue to innovate and adapt to keep pace with evolving and emerging gambling harms, and provide a range of support for their customers. We’ll be watching government, regulators and firms to make sure they act to better support people experiencing gambling-related harm.

You can read the policy note here.

Thanks to all the experts by experience and experts from banks who took part in this project. And finally a big thank you to Bronwen Dalley Smith and Kate Langston for leading on this project.