Utility Week

UTILITY WEEK | SEPTEMBER 2021 | 39 Comment Leon Muis Chief business offi cer, Yolt Technology Services B usinesses have been hit badly by the pandemic and many are now looking for ways to rebuild bigger and better and save costs and time. Open banking has demonstrated various business bene ts in nancial services, such as lower costs, increased e ciency, improved customer insights and experience, better retention, and innovation. Early movers in utilities will reap similar rewards. Consumers have also had to tighten their belts, so the ability to share their banking data to get bespoke payment terms, or products and services that will bene t them, is a real incentive. Debt management and col- lections teams are likely to come under increasing pressure in the months ahead and open bank- ing can support them in various ways. Open banking payments can improve the rate of success- ful payments made via means other than direct debit thanks to a smoother payment • ow, which reduces debt collection costs. This can be improved further with recurring payments – a set and forget option for customers that bills them automatically on a date of their choosing. Direct access to customer account data can improve sta decision-making regarding the creditworthiness of a customer during the onboarding process. It can help determine if they are eligible for social tari s and billing them at the time their account balance is most likely to be topped up. These bene ts are just the beginning. With the right data and innovation, we anticipate even greater gains in future. Measurable improvements, in terms of time and cost sav- ings compared to traditional methods, will vary signi cantly depending on the utility. But if we consider a hypothetical situ- ation where a customer service representative takes 20 minutes to assess a prospect's creditwor- thiness, multiply that to 1,000 customers per month and the total is 330 hours. Automate the process through open banking and the assessment might take just 2 minutes per prospect, resulting in around 300 working hours saved per month. And that is just the beginning. The stress to individuals of going into debt has been ampli- ed by the pandemic and is a particular burden to a grow- ing contingent of new to debt customers who are defaulting on payments for the rst time. Open banking's ability to reveal their actual nancial circum- stances makes it possible to tailor repayment plans to each customer's unique nancial pro- le, providing them with some peace of mind that they are able to meet their bills. Many people build up a debt over the course of the year and are asked to pay it o in December. For nancially stressed families, or people struggling to meet Christmas costs, it may be preferable to stagger the bill over a month or two and send early warnings to prepare them, or take another approach. Furthermore, a more precise assessment of custom- ers' creditworthiness, informed by open banking data, can help pinpoint those most in need of a social tari . Advancing technology will deliver even deeper insights into customer nances. Our recently launched Cash• ow Analyser tool carries out real-time and historic analysis on up to 18 months' worth of customer transaction data, providing utilities with an even more complete picture on which to base decisions. "Greater reliance on data and analysis is helping businesses streamline processes and reduce costs" United Utilities open banking trial United Utilities' catchment in the North West is home to 4 in 10 of England's most deprived neighbourhoods. As part of a commitment to li 315,000 people out of water poverty by 2025, the company is piloting an open banking app designed to streamline eligibility assessments for its reduced-rate social tari€ s. When an applicant calls in to a customer representative seeking help, with their agreement the tool automatically accesses their bank account data while they are on the call, checking levels of income and evidence of bene‚ t payments. These insights are shared with United Utilities in real time, so an approval can be made while they're on the line. According to United Utilities, the new system reduces the typical back and forth communications between agents and customers. Michelle Atkinson, head of income at United Utilities, tells Utility Week: "We wanted to under- stand if open banking has a place in our a€ ordability jour- ney and in supporting customers who can't pay. There's now much less friction in the process and the details we're getting are veri‚ ed, so from an auditing and from a govern- ance perspective, we're getting customers on to the lowest possible bill with the greatest of certainty." Another goal of the pilot was to test customer appetite and sentiment towards this new type of digital experi- ence. More than a third consented to share their banking information, a level of uptake Atkinson considers "really strong and probably over double what's expected in the industry". In addition, 80 per cent of that cohort said they would use it again and recommend it to family and friends. "Greater reliance on data and analysis streamline processes and Download the report Download the report Can Open Banking Resolve Utilities' Debt Fears? free at: https://utilityweek. co.uk/can-open-banking- to-resolve-utilities-debt- fears/ As England sweeps aside Covid restrictions and scales back related financial support measures in pursuit of a return to 'normal' life, energy and water utilities are holding their breath in anticipation of a wave of customer debt and affordability issues. The Government's Coronavirus Job Retention Scheme, the uplift to Universal Credit and a general decline in discretionary outgoings as people changed their spending I N S I G H T R E P O R T The open banking opportunity for utilities: bringing debt and affordability into focus With a pandemic-induced wave of customer debt expected to wash up on utilities' books over the coming months, some suppliers are trialling open banking solutions in the knowledge that better use of customer data can drive business efficiencies, improve customer support and help create more personalised products and services. This Utility Week Insight Report, created in association with Yolt Technology Services (YTS), highlights the key opportunities and challenges for this exciting data sharing innovation. In association with In this report Introduction The pandemic, utilities and open banking Uncharted Waters The size and shape of utilities' concerns about debt and affordability as covid restrictions and protections are lifted. The role of Open Banking Why this innovation from the financial services sector can help utilities: identify emerging affordability issues for customers, tailor support, make decisive decisions on debt resolution and increase efficiency in payment processes. Consenting adults The challenges to be overcome in applying open banking to the utilities sector, including securing consumer buy-in. V I E W P O I N T Expert commentary from Leon Muis, Chief Business Officer at Yolt Technology Services

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