Back to basics: Why the next wave of innovation won't try to reinvent the wheel

The online gaming industry has always had a fondness for promiscuous buzzwords and jumping on the latest technology and product bandwagons. And the current state of play in 2018 is no different. Whether it’s blockchain, the Internet of Things or virtual/augmented reality, the egaming world is once again awash with new technology jargon, and some operators have wasted little time in ramping up investment in such areas recently.

Companies like ALEA Gaming and Kindred Group, for example, have been some of the most prominent advocates of virtual/augmented reality gaming, while Greek operator Stoiximan also recently announced the launch of its “world-first” mixed-reality sports betting and casino product. In the digital currency sphere, meanwhile, start-up operators like FunFair and Coingaming have also continued to make significant inroads in the egaming space. Indeed, cryptocurrency pioneer Jon Matonis has even predicted crypto and blockchain will likely supplant online gaming as the main driver of Gibraltar’s economy.

Yet the latest wave of technological wizardry is still in its infancy and mass-market adoption in this sector has so far proven rather elusive. So how likely is it that these digital innovations actually have the potential to revolutionise the egaming sphere? And should operators be throwing money at large-scale product development right now to achieve first-mover advantage.

Chris Benstead, digital strategist at mobile app and web development agency Degree 53, is relatively sceptical about going all in on the latest tech trends and believes operators should err on the side of caution before planning any major investment. “With things like VR and AR, for example, I was asked my perspective on this quite a few years ago now and, in my opinion, they are all a bit of a gimmick for gaming and won’t really solve any of its problems,” he claims. “You will get some flashy experiences, but can you realistically imagine playing AR roulette for a whole hour? And with technology like VR, every experience where you need another device is a blocker essentially.”

He continues: “Crypto and blockchain are the big things currently and they probably do have a market out there, but, again, if you are talking mass market, then it’s been a bit of fad and the buzz has kind of gone out of it a little bit in my opinion. There will definitely be some companies that are successful, but I don’t see them overtaking normal currencies. If you’re a start-up, then you may want that crypto USP and to target a different demographic which is definitely technologically apt, male and 20-35. There might be something in that, but you are definitely going after a niche.”

Yet it’s not just about waiting for the ‘next big thing’ with regards to wider technology trends either. Just as significant is that operators can often waste a lot of time and resources in developing games, big features and flashy gimmicks, which they think are about to revolutionise the industry, and market the hell out of them, but ultimately fail to take off. Investing substantial money on a new product when there is no guarantee it’s going to make significant ROI is always going to be a risky business.

Keep it simple, stupid

Instead, some operators have found greater success in pursuing a much quieter and back-to-basics strategy when it comes to innovation. Taking their inspiration from outside of the industry, these online gaming companies have instead focused on what many would deem to be the less ‘sexy’ aspects of the customer experience, like payments and withdrawals. These areas may not get all the headlines but can have a significant impact on a company’s bottom line. So, are these areas of innovation in fact the industry’s main technological battlegrounds of today, and the part of the customer experience primed for the most investment for the foreseeable future?

Cost-per-acquisition in the online gambling is now astronomical, so there is an argument to be made that there is little point in spending hundreds of pounds or euros getting a user to your website when the first experience they are going to have is a negative one. In short, it’s about getting back to the very basics: making the core processes right and putting the customer first.

Prompter withdrawal procedures, a faster registration process, improved security tools, and the general removal of friction points in the customer journey certainly seem ripe for innovation and have clearly become areas of greater focus for numerous operators in recent months. Sky Betting & Gaming is one such example. And the Leeds-based operator’s enterprise business architect Andrew Walton points to the likes of WhatsApp and Slack as prime examples for how the online gaming sector should be evolving in this regard.

Indeed, the two US messaging giants Walton highlights never tried to reinvent the wheel – mobile and instant messaging had already long existed before they came on the scene – but both made their products frictionless, slicker and far easier to use than their competitors. And it’s exactly this USP that WhatsApp boasts about on its homepage with the message: ‘Simple. Secure. Reliable messaging.’

“These companies are deemed quite innovative but if you actually look at what they’ve done, their products weren’t built around some big new idea – they took existing services that people already used and just made them better. And you can see what the result of that has been,” Walton says. “All those areas which some people might consider the most boring parts, like onboarding and payments, are hugely important because that’s the real lifeblood of the online gambling industry. I believe that people really need to focus on this a lot more because there is actually plenty of innovation coming.”

George Kourakos, head of product and innovation at Stoiximan, is someone who is optimistic about the long-term outlook for reality-altering devices but also agrees with Walton’s predictions that the basics are ready for innovation too. “Nobody can be certain with a technology like virtual reality, but from what we’ve seen so far, I believe it will be very important for the casino sector because it’s just an experience you really can’t compare to mobile,” he says.

“Looking at what the likes of Revolut and Monzo have done to the traditional banks, I think the main advantages of these companies is they have created an experience that is targeting today’s users and Generation Z. They are customers who are using the web and services in a totally different way to how we have used them. So, in my opinion, I would say that the customer experience in general with regards to KYC, payments and registration is primed for innovation.”

Follow the leader(s)

As the late Apple co-founder Steve Jobs once famously said: “Innovation distinguishes between a leader and a follower.” The aforementioned Sky Betting & Gaming (SBG), which has been one of the industry’s biggest success stories in recent years, has more often than not taken the industry lead in this regard. The operator has a remarkable track record of being first to market with features which on the surface may not appear to be revolutionary, but taken together have resulted in a user experience which is often deemed one of the best in the industry. This back catalogue of features includes seamless login across its portfolio of mobile apps, Touch ID and the introduction of Apple Pay to its list of approved payment methods.

Fast Withdrawals is the operator’s latest initiative in this regard. Launched towards the end of last year, the “world-first” online payments feature vastly speeds up the process by which customers can get withdrawals into their bank account – a process which usually takes two-to-five days on average. The new technology developed by SBG has slashed this time to under two hours, albeit just for Barclays customers initially.

According to Walton, the reception from customers has been extremely positive so far, with the operator aiming to roll the technology out with other banks too over the coming months. “Fast Withdrawals is something that customers really needed, and the reception so far has shown just that.

“It always came out in research that withdrawals were a real issue for customers because they were winning on Saturday but then it took days to get their money back,” he says. “At the end of the day, why should they deposit when it takes them three or four days to get their money? That was really a problem on the banking side, but we helped drive that innovation and it’s been a massive tick in the box for customers.”

Of course, it’s not only Sky Bet that has been innovating in these areas. MRG subsidiary Mr Green, for example, unveiled its Express Registration and Withdrawal earlier this year, a product which uses Sweden’s BankID authentication function to register users and transfer funds in five minutes. Competitors such as Global Gaming, Hero Gaming and ComeOn have all made similar inroads in this area too by launching fast withdrawal and registration processes via Trustly’s Pay N Play payments system. Gaming Innovation Group has also opened this up to its own operator partners, helping to reduce highregistration churn seen historically in the online gaming industry.

Measuring success

With these wave of fast withdrawal products, undoubtably a major risk for those operators before going live was that because customers could take out their money much quicker, this ultimately meant they were less inclined to leave their money in the ecosystem. The other side of coin, and most likely the reason there has been such a flurry of activity in recent months, is that by doing the right thing for the customer it will increase their brand loyalty and lead to a greater share of wallet.

But more broadly with a feature such as this, the main problems are deciding whether it’s worth the investment and how best to gauge whether it has indeed proven successful. After all, it’s clearly hard to compare a fresh registration form, for example, to a new gaming product where an operator can directly measure the revenue derived from it. But there is other KPI monitoring that can be done, while analytics tools such as Google Tag Manager and Hotjar have proven to be some of those most effective at measuring the user journey with regards to what is and isn’t converting customers.

Degree 53 says it follows a similar analysis process with regards to registration and claims it has increased the conversions of registrations significantly each time. “Although you can’t measure it exactly, an extra 20% conversion increase is a lot of money on the bottom line when you’ve got thousands of customers going through,” Benstead says. “This isn’t difficult stuff to do and it doesn’t take a lot of time or investment, but people just don’t tend to do it because it’s not perceived as sexy. It’s one of the forgotten or unseen battlefields.”

Compliance has also proven to be a hindrance when it comes to innovating in this part of the user journey, and is often cited as a reason why some companies have put the brakes on many attempts to simplify the customer sign-up process. In areas such as registration and KYC, for example, where the wealth of personal information taken is required by operators for compliance reasons, legal teams can be reluctant to make any wholesale changes to the process if they haven’t been instructed to do so by regulators. If the compliance isn’t changing, why should operators want to look at features which aren’t directly making money?

One small step, one giant leap

However, Benstead urges operators to be far bolder in this regard as he believes it doesn’t necessarily need to be at the expense of compliance. “If there is a regulatory change then you’ve got an opportunity to have a redesign and think about how it should work and be more forward thinking,” he says. “One approach we’ve seen companies do is question when they actually need that data. For example, an operator may ask for 20 pieces of information before a customer can register and is allowed on the website, but in some instances you might not actually need some of that information until they deposit or withdraw. So perhaps there are other ways of getting people on to the site much quicker in a way that is still compliant.”

But what comes next? Open banking appears to be an area of relatively untapped opportunity, which could be particularly beneficial in areas such as customer protection and affordability. Educational onboarding, in a similar way to how Slack drops in little hints and tips to the user, is also being actively discussed by certain operators and would aim to guide the customer through the product in real-time by using browsing activity data. Not to mention artificial intelligence and the advances that could make with chatbots and the realm of customer service in general.

The first interaction with the customer on-site is always crucial. And at the end of the day, the more people an operator can get through the door the more deposits and revenue they will accrue, especially if the inherent risk of innovation can be reduced by rolling features out to small groups, doing A/B testing and then KPI monitoring. Such non-revolutionary, incremental 1% changes do add up over time and a cursory glance at industry market-leaders, indicates that they seem to nearly always get the basics right when it comes to UX. Bet365, for example, is not known for its big flashy features and product launches, but for consistently providing a reliable and easy-to-use sports betting service.

This is not to say there is no future in this industry for the current wave of technological trends, nor that there is no room for operators to launch their own innovative products. Some firms will no doubt find formidable success by investing to obtain first-mover advantage, and often it’s not an either/or for companies that have the money and flexibility to experiment. But for the foreseeable future, there seems to be some real merit in focusing on those parts of the customer experience which sometimes don’t receive the love they deserve. It’s time to get back to basics.