Utility Week

32 | OCTOBER 2021 | UTILITY WEEK Customers Event Perfect storm of hardship Rising retail and wholesale energy prices combined with cuts to Universal Credit and rising inflation mean that for some vulnerable consumers it's going to be a cold winter. B oris Johnson may be confident that surging gas prices will not lead to a winter of hardship this year, but at Utility Week's Consumer Vulnerability and Debt conference last month they were eyed as the latest in a potent combination of fac- tors brewing up a "perfect storm" of con- sumer affordability challenges in the months ahead, as one speaker put it. The withdrawal of government support schemes which have sheltered many house- holds from the worst financial impacts of the pandemic is imminent. This, mixed with a rise in the energy price cap and now unprec- edented spikes in wholesale energy costs – alongside upticks in other basic domestic costs such as food – all suggest utilities will see deepening problems around financial vulnerability across their customer bases this winter, our expert speakers agreed. Furthermore, it's going to be hard to pre- dict who is most at risk of sudden financial hardship. Across the UK today we know that there are masses of individuals and house- holds whose good credit and payment his- tories mask a hand-to-mouth existence with no buffer in savings. As Anita Dougall, chief executive of event sponsor Sagacity Solu- tions pointed out, more than 50 per cent of UK adults currently have insufficient savings to allow them to handle a surprise bill of more than £300 pounds. And as financial troubles settle in, utili- ties are also bracing themselves to deal with mounting issues in other forms of customer vulnerability, including mental health chal- lenges and physical health impacts as more consumers face choices between heating and eating or stringently ration their consump- tion of essential services. Utility Week's two-day conference explored the manifold ways in which utili- ties are squaring up to this daunting environ- ment and trying to equip themselves to help customers while also protecting cash flows and balance sheets as much as possible. The first day of the event covered policy and reg- ulatory issues, which speakers felt must be Leveraging technology to tackle debt In a breakout session sponsored by AI specialist Inawisdom, speakers and delegates shared views on the potential for technology to help utilities and their customers tackle debt challenges. Customer service leader Andy Clowes spoke about the focus South East Water has recently placed on expanding payment options and how it is trying to address issues around econo- mies of scale for these new technologies via strategic technology partnerships. Meanwhile, Inawisdom's Dimitrios Gontzes described how it's work with Northumbrian Water has sup- ported leaps forward in the company's ability to identify emerging affordability issues for indi- vidual customers and forecast its debt exposure accurately – and resource itself to mitigate this – months into the future. The need to bring greater personalisation into consumer debt pathways was a key theme for both speakers, but they also identified a range of challenges – echoes in audience engagement – which can make it hard for utili- ties to achieve this. Below are listed some of the key obstacles to personalised, technology enabled debt management identified by speak- ers and delegates • Lack of high quality, well-structured data. • Low ability to integrate data sets (especially third party data) and generate focused intel- ligence. • Fear of overreaching ethical grounds for data use. • Creating sound business cases for technol- ogy investment. • Achieving economies of scale for technolo- gies which will only help niche segments. • Lack of in-house skills to ensure technology investments are optimised.

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