Changing lanes: SafeComply Technologies on the future of RegTech

Regulatory technology (RegTech) has played a central part in the financial services industry for some time. Now, increasing enforcement and obligations from gambling regulators in the areas of social responsibility and anti-money laundering have seen an increasing wave of new RegTech solutions being designed for the gaming industry.

The experiences gained by individuals working in the regulatory arm of the financial services industry have aided the development of better methods of remaining compliant, in what is arguably a vital area of everyday life. Far from sitting on their hands, egaming providers have been quick to embrace technology as a way of improving compliance, and providers such as bet365, William Hill, GVC and Mr Green have all launched technological initiatives in this area over the last 12-24 months.

Ex-Betsson VP of legal and general counsel, Abby Cosgrave, stepped down from her dual roles at Betsson in the Summer of 2018 and partnered with Liberatum developer and solution architect, Klaus Jensen, to launch SafeComply Technologies. This is the technology arm of Cosgrave’s larger SafeComply Group which was launched in October 2018. Cosgrave discusses the development of SafeComply Technologies and how the intersection of Regulatory Technology and the egaming industry might be a positive relationship for both parties.

EGR Compliance: How does the technology developed by SafeComply Technologies compare to or supplement other RegTech technologies on the market?

Abby Cosgrave (AC): RegTech largely falls into 5 focus areas: Regulatory Reporting, Risk Management, Identity Management/ Control, General Compliance and Transaction Monitoring.  In an ideal world, a product should tick all these boxes but very few do. Our initial product, SafeGuard supplements operations in 3 of the 5 areas: Regulatory Reporting, Risk Management and General Compliance. We will seek to develop future versions to incorporate the other two areas.  Most RegTech providers currently targeting the egaming sector tend to focus very heavily on the Identity Management and Control area, whether by offering KYC solutions, or PEP’s and Sanctions or Adverse Media checks. I believe our software sits alongside these tools in providing operators with software to centralise customer due diligence, control workflows and decision making and to issue reports.

EGR Compliance: In what ways have your experiences working for Betsson Group coloured your approach to the development of SafeGuard?

AC: I guess this question is inevitable given that I stepped down from my senior position at Betsson Group and have then moved on to launch SafeComply Group. Betsson are a fantastic company and one I hope to work with again in the future, they have some fantastic proprietary software for customer protection and working alongside such tools certainly illustrated how helpful they can be. However, the fundamentals of SafeGuard are unrelated to my time at Betsson Group and are instead inspired by closely monitoring the regulatory settlements and sanctions from Great Britain alongside the general obligations imposed under the 4th AMLD across Europe.

Regular themes in this matter are that operators must apply risk assessment knowledge to their customer due diligence processes, they should collate and assess all available information on players in line with their risk assessment, such collation and evidence should be revisited and constantly assessed in line with the customers risk profile and that such records should be centralised and provide a single customer viewpoint of all relevant data so that the relevant persons in RG and AML are able to make timely interventions in relation to such customers.

EGR Compliance: Does AI or machine learning algorithms play any role in SafeComply’s tools?

AC: We provide a platform that implements clear workflows, greater visibility over customer due diligence, easy reporting, centralised and visible decision making and automated regulatory reporting. The platform has the facility to automate risk scoring and “next action” suggestions for operators however, any such risk sore or suggestion should be led by the operator and those risk flags in line with their internal risk assessment. AI and machine learning can result in a lot of false positives without the correct data or parameters being set and it is for this reason we are seeking partners to work alongside rather than to issue an “off the shelf” product which could incorrectly flag large sections of a customer database as higher risk than they should be.

EGR Compliance: Gambling regulations change worldwide on an almost daily basis, how will SafeComply technologies deal with this issue?

AC: To future proof as much as possible, the software we will focus on will relate to central themes that sit within AML and RG in each market which means that any tool is not tied too tightly to any one jurisdiction. As a general comment, in regard to local gambling regulation in each territory, the industry will continue to see increased restrictions unless the industry starts to conduct itself accordingly. It is not difficult to see a trend in lawmaking in this area: regulator makes law, industry finds workaround or applies requirement in a minimal fashion, regulator responds by restricting the industry further.

EGR Compliance: Does your product target any specific types of operator? If yes, what type?

AC: It is something that would benefit all operators, but we are consciously looking for the right ones and for long-term partnerships rather than quick sales. We plan to undertake integration and brainstorming workshops with each operator we onboard and will look to advise on how safeguard should be used to streamline and supplement their current practices and systems. We understand this will be time-consuming and have limited ourselves in regard to the initial number of partners that we can accept and will start meetings in early 2019 with a view to onboarding our first partner.