Utility Week

UTILITY WEEK | MAY 2021 | 31 Customers ability headache for customers and prompt a signi cant spike in arrears and unpaid bills – indeed, according to Citizens Advice data published in December 2020 at least 600,000 additional customers now say they are behind on energy bill payments compared to pre-pandemic times. The bottom line So, when will this evidence begin to really show itself on utilities' debt books? How long will the problem last and which cus- tomers will be worst a€ ected? These were the questions explored by a group of senior debt, collections and cus- tomer service leaders at a recent virtual working group hosted by Utility Week, in association with arti cial intelligence spe- cialist Inawisdom, in a bid to help energy and water companies arm themselves appro- priately for their forthcoming battle with debt and arrears. In the resulting report, Utility Week has summarised the key challenges discussed during this session, as well as subsequent follow-up interviews with a selection of par- ticipants. Topics covered include an antici- pated shi† in debtor pro le to include a large proportion of today's "just about manag- ing" customers, and the complex challenge of identifying or serving these individuals whose strong credit records belie their o† en hand-to-mouth existence. Also covered are water representatives' views on a relatively "naïve" sector approach to strategic write-o€ s of consumer debt. Some participants believed a more "commer- cial" approach would lower debt levels in the round and also reduce operational costs, thereby supporting reductions in consumer bills, which might improve a€ ordability. Critically, however, the report is not only focused on the debt challenges being faced by utilities, but also on the solutions partici- pants expect to help them plug product and process gaps and deliver better experience for customers struggling to pay their bills. Top of the pile in terms of solutions that are expected to make a material change to the readiness of utilities to handle Covid- related debt, are self-serve solutions, includ- ing open banking. Meanwhile the perennial issue of data sharing and the potential this might have to improve the way utilities ser- vice both long and short-term a€ ordability challenges for their customers, featured heavily. The full report is available to down- load free from Utility Week's website: utilityweek.co.uk. Jane Gray, content director in association with Comment Neil Miles Chief executive, Inawisdom A s the CEO of an AI consultancy, I am always fascinated by the application of technology and how the power of these emerging tools can be applied to tackle industry issues. The predictive nature of AI is proving vital in helping business avoid problems before they happen, and in utilities we are seeing this adopted more and more in the management of debt. Preventing vulnerable custom- ers from facing this nancial adversity is never more pertinent than in these exceptional times, when consumer debt poses a unique challenge. At our event we heard directly from debt, collections and customer service leaders what their current approach looks like today and where they would want to focus for the future to predict and prevent upcoming debt and to improve the debt process for custom- ers already a€ ected. It was clear that accurately antici- pating where the next wave of debt will come from is a key struggle in the context of the uncertainty generated by Covid. There are many customers who are managing to get by today, but who may also be vulnerable to debt in the short term. The ability of utilities to identify these customers early was in doubt, as traditional methodologies and data analysis approaches struggle to take into account some of the new imperatives the pandemic has created. It was encouraging that so many attendees recognised the opportunity to use broader datasets and shared data to help build a more rounded picture of debt propensity and aid in more rapid identi cation. With wanting to prevent debt even occurring, any approach that enables earlier intervention is a signi cant advantage. Another key area of discussion was the opportunity to add greater personalisation to customer journeys through the debt life cycle. Across the broad range of industries we work in, hyper personalisation in customer experience is regularly tabled as a primary strategic goal. Consumers are individuals and this must be kept front of mind when engaging with them, especially in the realm of debt, where there are multitude of reasons, emotions and requirements at play. In sensitive and complex situations like this, it is all the more important to have robust ways to ensure you really understand how and why customers are struggling and to tailor e€ ective and respect- ful options for them to address and resolve their problems. This might come down to nding the right payment type, communica- tion method, cadence of interaction or even o€ ering self-service and automation for the customer to avoid person-to-person contact altogether. Identifying those preferences and building the right journey for each customer is clearly a priority and it's an area where AI and machine learn- ing have great potential to drive rapid improvements using both historical and real-time data. With digital innovation well underway at many utilities, it was great to hear the open-mindedness of our working group participants to leverage this revolution to better man- age debt and improve the experience of customers. There is still untapped potential in the data utilities already hold, as well as a world of opportu- nity in establishing open source or shared datasets to establish a more consolidated, industry-wide approach to addressing debt. While the shared data goal may be some way o€ , a more proactive approach to debt prediction, preven- tion, and personalisation using the tools available today could create huge bene ts for customers and the utilities that serve them. Predictive tools can help address debt

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