In the past 5 years, there have been a multitude of different regulatory shifts across the various sectors of UK business.
From the GDPR to Gamstop and even Brexit, businesses have shown growth despite the many challenges they have faced, such as adapting company policies, implementing new security measures, and coming up with innovative ways to stay relevant in an ever-changing market.
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PSD2 And Its Impact On Fintech And Banking
The second Payment Services Directive, the PSD2, was implemented by the European Union in 2018 and aims to ensure security improvements, increased innovation and better competition in the financial sector.
The PSD2 gave UK fintech companies access to consumer banking data, allowing the industry to come up with new products such as open banking, as well as new payment options.
The innovation that this brought about led to the creation of payment aggregators and budgeting apps, which have had a great impact on the public’s ability to manage finances effectively.
The impact that the PSD2 had on the traditional banking sector is quite different. The directive brought about many challenges for the industry, as it caused quite a disruption in the financial sector.
Traditional banks have had to make rapid changes to their security measures, as well as adopt new technologies which required big operational changes.
Overall, the PSD2 caused a positive disruption that did indeed foster good competition, as well as lead to innovation and the improvement of existing security measures.
How Brexit Has Created Challenges For Cross Border Financial Services
Before Brexit, financial institutions in the UK could operate in the EU with ease as there were no travel restrictions, and the regulations were all the same.
However, with the arrival of Brexit, everything changed. Suddenly movement across the UK and EU borders was not as free, and the regulations within the different financial sectors were no longer the same.
This required the UK companies to make difficult decisions – do they make the necessary adaptations to retain the EU market, no matter how challenging, or do they opt to focus on their local UK market instead?
Many financial institutions opted to do the former, by creating subsidiaries in the EU, or by changing their operating methods to comply with both the EU and UK regulations.
They also took the opportunity to secure other international markets, thus providing themselves with additional security for the future.
Collaboration between EU and UK financial institutions has increased, allowing both EU and UK Fintech companies to leverage local expertise and compliance, which assists in running cross-border operations more smoothly.
What Is Gamstop?
Gamstop is a gambling prevention scheme introduced in the UK that uses self-exclusion methods to help people limit their access to gambling platforms.
All UK-registered online gambling sites need to be registered with Gamstop. This allows users to set up one-click gambling exclusion – by signing up with Gamstop, they prevent themselves from accessing all UK-registered online gambling sites.
How Does Gamstop Affect Online Casinos?
- Mandatory Participation: Every online casino that operates out of the UK is required to sign up with the Gamstop self-exclusion program and ensure that their clients have a clear option to self-exclude themselves from online gambling activities if they need to.
- International Market Considerations: Gamstop restrictions don’t apply to casinos that operate internationally. There is a guide on cryptonews.com listing the casinos that are choosing to use international licensing in order to bypass Gamstop requirements, thereby retaining their international clientele and remaining accessible to players in the UK who have signed up for the service.
- Importance of Responsible Gambling: Gamstop places an emphasis on the importance of responsible gambling, requiring registered casinos to promote it. Casinos must also provide the necessary resources to assist players struggling with a gambling addiction.
- Player Access Limitations: Because Gamstop is a self-exclusion initiative, the regulations can limit the access that players have to online casinos, which reduces the potential customer base, but has a positive impact on player well-being.
- Compliance Challenges: The integration of Gamstop into existing gambling platforms can be complicated, as it requires online casinos to navigate some difficult regulatory requirements in order to integrate successfully. However, in order to maintain a legal and ethical online casino business, businesses must ensure compliance.
- Innovative Solutions: Online casinos have adapted to the Gamstop regulations with innovative solutions, including alternative forms of entertainment that are related to gambling but don’t fall under the Gamstop requirements. This can assist with maintaining player safety and casino revenue concurrently.
e-Commerce: Adapting To The GDPR
How The GDPR Is Affecting e-Commerce Business
The General Data Protection Regulation (GDPR) is a policy that was introduced by the European Union in 2018, and adopted by the UK after Brexit, where it became the UK-GDPR.
It has impacted the way that companies collect, store, and use consumer data and ensures the protection of the consumer’s private data.
Impacted by the GDPR, the e-commerce sector has had to change its marketing strategies, as well as how it collects and stores its customer’s information.
Businesses have had to implement strict measures when it comes to customer consent for data collection, as well as provide up-to-date and legally binding privacy policies.
Benefits Of The GDPR
There has been a positive side too – GDPR compliance fosters trust between the company and consumer.
Consumers share more data when they feel safe, thereby allowing companies to market to their consumer bases more effectively, which increases engagement and conversions.
Since the implementation of the UK-GDPR, cybersecurity policies have been updated more frequently.
In fact, 83% of companies surveyed by the UK Government reported that new policies are more robust and comprehensive than they were three or more years ago.
The regulation has also assisted in job creation. Many companies have employed a Data Protection Officer to manage their compliance and to maintain all data protection measures that the company has put in place.
There are also more IT specialists with a focus on data protection being employed for the same purpose.
Concluding Thoughts
UK businesses have had to adapt to many different policy and regulation changes over the last 5+ years across various industries, and have proven themselves to be innovative in the face of change.
From the casino industry and Gamstop to fintech and the PSD2, the UK has once again shown its resilient nature and stayed relevant in the ever-changing global market.
