Kiwibank’s initiative to offer customers the ability to block payments to online gambling websites has drawn praise from many quarters with other financial institutions being encouraged to follow its lead. The tool was created in collaboration with the Problem Gambling Foundation and has seen increasing interest from consumers.
With the Covid-19 pandemic came an increased interest in and engagement with online gambling in New Zealand. Gambling spending grew from around $4.1 million a week at the beginning of 2020 to $6.25m a week during the lockdown, according to the Ministry of Health’s data.
Kiwibank responded to this trend and the potential harms associated with it by being the first bank in the country to allow customers the option of blocking payments from their credit and debit cards to online gambling websites, after a successful pilot project in 2020.
Julia Jackson, the Kiwibank head of sustainability explained that the rise in activity during lockdown is a global phenomenon as people eased their boredom and stress with online gambling.
“As a bank, we started to think about what we could do meaningfully. We’re not counsellors, we can’t solve all of those problems. But we do have a unique insight into people’s spending behaviour,” she said.
The payment block is applied to merchant codes linked to gambling companies. Any online gambling transactions attempted with the customer’s card via these merchants will be immediately declined. The block can also be placed on additional cards and can be reversed at any time, following a two working day processing period.
Jackson remarked that the auto-save credit card payment function available on most online gambling websites allows individuals to overlook the amount they are actually spending on these activities.
“Eighty per cent of customers who have put the block in place have kept that block on. That’s now been seven or eight months of them not having the ability to gamble online,” she stated.
Kiwibank has reported that it has helped 127 customers side-step close to $13,000 each per year in gambling losses, which comes to about $1.7 million in total with over 200 customers requesting the function.
Jackson explained that customers need not worry about their future lending project if they choose to use this tool, saying,
“The benefit, ultimately, is we are supporting our customers to ensure that they are spending their money in a way that is promoting their long term wellbeing and helping them to get ahead. It ensures we have customers who are more financially resilient and more emotionally resilient as well, which is a great side outcome.”
Banks Under Pressure
The banking industry at large has been urged to prioritise the safety and interests of customers in the wake of the Financial Markets Authority and the Reserve Bank of New Zealand’s joint review of the state of the country’s conduct and culture in 2018.
The Reserve Bank Governor, Adrian Orr, had commented at the time, saying,
“To promote a sound and efficient financial system, banks have a responsibility to ensure customers receive products and services they “understand. These products and services must be suited to customers’ needs on an ongoing basis.”
Gambling counsellor Bonnie Lovich-Howitt spoke up for consumers, explaining that online gambling websites obstruct self-exclusion efforts.
“Our clients report gambling sites are like an octopus. One website will have an offer on other sites. Often unsolicited messages pop up, but we really don’t want them popping up when people are most vulnerable. I had a client who was doing really well, they hadn’t gambled in over a year, they were feeling really good, their relationship was back on track. And then they got an email from a random online gambling place. Basically, it said, you know, spend $1, and we’ll give you $100. But 40 hours later that harmless dollar cost them their whole paycheck,” she said.
Lovich-Howitt added that Kiwibank’s measure is an effective tool for individuals seeking to reduce their exposure to gambling harm and that she had urged the bank to ensure that the use of this measure would not negatively impact the customers’ ability to borrow money.
The counsellor made her final comment on the matter, saying.
“That’s crucial to the success of the block. They wouldn’t have as many people using it if customers were worried it would affect their lending. We need people to be confident to talk to the bank. Offering services helps challenge the stigma associated with harmful gambling, and financial institutions have a responsibility, as gambling is directly related to money.
“I honestly hope and believe that it’s a trend that all others follow.”