Whilst some economies are experiencing a downturn, the online gaming and gambling industry is one in which innovation can help drive improved performance through difficult times.
Emerging markets and simplifying cross-border trade
The online gaming and gambling industry is seeing a widespread, mainstream option. This is encouraging firms to look at their global reach. This makes the sector one of the contributors to the growth in cross-border transactions – which today are growing fast, with global transactions increasing from $29 trillion in 2019 to $39 trillion in 2022. Underpinning this surge were factors like global trade improvements, cross-border B2C payments, growth in online businesses and borderless e-commerce.
As an outcome, and to compete in the global marketplace, businesses around the world are turning to their banks and fintech partners for faster, securer and more transparent payment solutions.
Online payments allow merchants and consumers to conduct cross-border trade in goods in which they have a comparative advantage. At the click of a button, people can purchase products and services from across the world. In 2021, 2.14 billion people – almost a third of the world’s population – bought goods and services online. Another survey found that in the European Union (EU), 74% of internet users had shopped online.
Transactions in a global digital marketplace across countries depend on sellers and purchasers using compatible payment systems. In many parts of the world, this is tricky. Europe, for example, has differences in payment preferences across member states and is partly the inspiration behind a Single European Payments Area (SEPA) – whereby customers can make cashless payments via credit transfer and direct debit anywhere in the EU and in many non-EU countries, including the UK.
Here, using alternative payment systems designed to be compatible with widely used payment methods, like PayPal, improve interoperability and alleviate some of these issues.
Artificial intelligence (AI) and Software-as-a-service (SaaS) expansion
The online gaming and gambling sector has always been open minded when it comes to technology innovation – in fact progressive thinking with technology has become something of a prerequisite to success. In light of this, it’s exciting that digital payment systems are increasingly looking to harness the power of AI. It can be applied to help with data storage capabilities, predictive models, and user experience and empowerment.
The technologies can also help emerging and expanding brands alike to reinforce the trust they need to build with the customers. AI can support compliance, fraud detection, and cybersecurity. To protect a user’s financial security, AI-powered algorithms can analyse payments and transactions, gather data from different online payments and transactions, learn the patterns from former fraud cases, and determine a pass or fail verdict in near real-time.
AI minimises fraud for complex, high-volume transactions and human error in flagging suspicious transactions and will significantly impact the overall fraud resistance of digital payment systems. It can also be used by businesses to determine how best to pay suppliers or enhance customer service and expand market research.
Across the technology sector there is a talent shortage in play – and therefore a limited pool of graduates with specialist data skills impacting the ability of businesses to see through their digital transformation projects. Conveniently, AI can help here too. Taking on repetitive and time-consuming tasks so employees are free to handle more complex tasks where a human touch is needed.
Steered by the talent and skills conundrum, SaaS is of growing relevance for many businesses. Finding data engineers to build workflows and a skilled team to operate and manage the platforms the business uses is critical. As such, SaaS is becoming more appealing for businesses so that the only focus for business leaders is using the service while leaving the configuration, optimisation, fine-tuning, and performance management in the hands of an expert.
Global cross-border transactions increased from $29 trillion in 2019 to $39 trillion in 2022
Like all sectors, online gaming and gambling is preparing for a raft of compliance requirements around environmental, social, and governance (ESG). Digital adoption and its paperless, task-automated systems bring more environmentally friendly business practices. Today, customers, staff, and investors judge businesses by their approach to sustainability and make decisions based on ESG criteria. As a result, every organisation must have a strategy with corporate social responsibility (CSR) measures at its core.
All industries are looking to adopt greener practices, and fintech and financial services providers are no exception. As with most sectors, banks and financial services providers rely increasingly on data centres. With greater scrutiny on sustainability, there’s a growing appetite for data centres that use sustainable energy. And the supply is there, with some even sporting carbon negative credentials and the ability to provide energy back to the grid to support during spikes in demand.
The expectation for sustainable measures remains high for all businesses both front of house and behind the operational scenes – any organisations showcasing their CSR role in the market, and supporting sustainable initiatives and practices, will need to be authentic. Get it right and it could also contribute to attracting talent as you expand.
Powering growth in global markets for prosperity
The online gaming and gambling sector faces an interesting period, where the right innovation strategies could help it outperform other sectors and remain robust during economic uncertainty. Global payments make cross-border trade possible – opening businesses to emerging markets and facilitating SME growth, the backbone of a domestic economy. Having a provider with the right expertise in the regions you want to operate is critical to unlocking new markets. Complemented with AI to improve and streamline operations and SaaS expansion to help with the global skills shortage, even small businesses have the opportunity to bring in international custom.
The next few years will be rough for many businesses, but understanding past and present trends can help explain how best to weather them. And with this knowledge, you’ll be well placed to put your business in a position where, come the end of the recession, it’s ready to take advantage of the following stability.