A recent report from Queen Mary University of London sheds light on the pivotal role financial institutions can play in preventing significant financial harm arising from problem gambling. As more individuals seek help for gambling-related issues, the study emphasizes the unique position banks hold in identifying and mitigating gambling-related harms.
Financial Institutions Can Be the First Line of Defense
The research, conducted by the Multi-disciplinary Research Hub on the Prevention of Gambling Harms, reveals that approximately 44% of the UK population engaged in gambling in the year leading up to March 2023. While gambling can be a form of entertainment, it can escalate into a problem for some, resulting in severe financial and mental health issues and an increased risk of criminal involvement.
Some of the report’s highlights include innovative approaches financial institutions can adopt to support individuals affected by gambling-related harms. Dr. Janelle Jones, senior lecturer in Social Psychology at Queen Mary University of London, underscored the personal consequences of problem gambling, noting that financial institutions like banks had the perfect tools to enhance existing prevention and treatment measures.
Banks, with their unique position and access to transactional and behavioral data, can effectively identify and assist customers in recognizing and addressing their gambling-related issues early.
Dr. Janelle Jones, Queen Mary University of London senior lecturer in Social Psychology
According to the document, banks can implement measures like gambling blocks to identify and assist customers in recognizing early signs of gambling-related issues. Such institutions can conduct spending analyses to monitor transaction patterns and identify irregularities. Banks can then engage in active communication with customers, facilitating early intervention by addressing gambling-related issues.
Collaboration with Other Stakeholders Remains Paramount
The study emphasizes the importance of proactive measures, including banks actively signposting affected customers to specialized support agencies like Gamcare. These actions align not only with the new Consumer Duty imposed by the UK Financial Conduct Authority (FCA) but also contribute to promoting customer well-being and financial stability during a turbulent time for the country’s gambling sector.
Banks are generally in a better position to spot potential issues and intervene, as they do not suffer conflicts of interest like gambling operators. However, Julia Hörnle, professor of Internet Law at Queen Mary University of London, notes inconsistencies in the implementation of these measures across the banking industry, highlighting the need for industry-wide standards and regulatory guidelines.
Clearer guidance and minimum standards as to what the new Consumer Duty means for protecting individuals experiencing serious gambling harms is necessary.
Julia Hörnle, Professor of Internet Law at Queen Mary University of London
The study concludes that fostering collaboration between banks and regulators, establishing enhanced standards, and involving people with experience of gambling-related harm in designing measures can lead to more effective prevention of unsustainable financial losses. By doing so, industry stakeholders can save lives and safeguard individuals from the detrimental effects of problem gambling.