Utility Week

38 | SEPTEMBER 2021 | UTILITY WEEK Analysis Utilities trial openbanking As concern mounts about the likelihood of new and deepening consumer debt this winter, some utilities are turning to a fi nancial services technology phenomenon to help equip them cope. A new Utility Week report explores how and why.` A s England sweeps aside Covid restric- tions and scales back related nan- cial support measures in pursuit of a return to "normal" life, energy and water utilities are holding their breath in anticipa- tion of a wave of customer debt and a• ord- ability issues. The government's Coronavirus Job Reten- tion Scheme, the upli- to Universal Credit and a general decline in discretionary out- goings as people changed their spending habits during lockdowns, served to create a nancial bu• er making bill payments easier to budget for. But as these props are removed over coming weeks and months, experts expect a growing contingent of "new to debt" customers to emerge. Meanwhile, it is feared that those already defaulting are at risk of being plunged fur- ther into arrears. Both scenarios have serious implications for utilities' debt books. The precarious situation has prompted some utilities to seek out solutions and inno- vations that create and sustain a more realis- tic picture of customers' nancial situations. Among them open banking has emerged as a powerful tool. The ability to access bank account data via a third party app, pro- vided customers give consent, can unlock a range of bene ts such as: helping better identify nancially vulnerable customers; helping mitigate bad debt; creating more personalised payment plans; reducing costs associated with nancial transactions; and alleviate stress levels for customers and sta• . Pilots of the technology at several utili- ties have shown it has legs, and provided that certain business and technical hurdles are overcome, longer term use cases and wider roll outs are expected to emerge in the months ahead. A new report, created by Utility Week in association with open banking technology pioneer Yolt Technology Services, pro les some of these early open banking trials in the utilities sector, as well as the experiences and expectations of those leading them. Among those companies who share their experiences in the report are Eon, North- umbrian Water, Pelican Business Services – a joint venture between Wessex Water and Bristol Water – and United Utilities. The full report is available to downloaded free from Utility Week's website. Contributors to our report said: "When furlough ends there are going to be large-scale job losses and that's when the impact will really be felt. The serious wall of fi nancial hardship, initially predicted for last summer, is still expected to arrive." Steve Crabb, consumer vulnerability expert of fi nancial hardship, initially predicted for last summer, is still expected to arrive." Steve Crabb, consumer vulnerability expert "Open banking could reduce stress in customers who would either feel uncomfortable or are unwilling to visit an advice bureau." Charley Maher, managing director, Pelican Business Services "Our debt tends to be focused on rental sector properties. As restrictions on evictions for unpaid rent have started to unwind, it's where we will start to see a problem come." Mark Wilkinson, head of income, Northumbrian Water we will start to see a problem come." Mark Wilkinson, head of income, Northumbrian Water an advice bureau." Charley Maher,

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