Utility Week

30 | FEBRUARY 2022 | UTILITY WEEK Vulnerable customers Download report Journeys out of debt A new report from Utility Week and Inawisdom asked experts from water and energy to share their experiences and solutions to dealing with different cohorts of customers in financial difficulty. T he toxic cocktail of Covid, inflation and energy price hikes, is taking its toll on consumers' finances and challenging utility companies to think differently about how they deal with a new cohort of custom- ers tumbling into debt. This was an important challenge to emerge from a Utility Week workshop which brought together customer and collections experts from both energy and water compa- nies. The virtual event took place at the end of November with support from AI and data specialist Inawisdom. The workshop addressed the need for companies to adapt to the new vulnerability trends. It also debated how to ensure that all of those facing payment issues, including the long-term vulnerable, had equal access to multi-channel engagement and the diver- sity of journeys afforded to other billpayers. This is no simple feat but a complex terri- tory to navigate. As participants pointed out, there is the issue of dealing sensitively with those new to debt and the stigma they attach to it; the problem of pinpointing those 'just about managing' but still pay on time. And there are good ideas emerging on better ways to engage with customers in financial difficulties – although no silver bul- let. Data is seen as a new tool to harness – but it is widely acknowledged that using it and sharing it to effectively help customers and their utility providers spot those on the brink of debt and default was still in early stages. The urgent need to level up A key tenet of the discussion was to explore a concern raised briefly at a previous Util- ity Week/Inawisdom event: the contention that investment in digital innovation and digitally supported customer service for debt and affordability "journeys" lagged behind other areas. It is acknowledged there is a need for lev- elling up, with experts identifying that utili- ties need to do something quickly to inject more sophistication into the processes for those struggling to pay and make it easier for higher volumes of customers to flexibly manage their payments if they need to with- out stigma. At the same time solutions are needed that don't drive up the cost to serve. As one energy participant remarked: "The levelling up agenda is very important for me because we have yet to tackle it. In contrast, we're allowing digitally connected people to do different things in different ways." On a more positive note, it was recognised by a number in the group that while debt and collection departments used to apply a fairly one-size-fits-all approach, Covid had forced a realisation that they needed to add more differentiation for different customers. Encouragingly, that is starting to happen. A number of companies have got to a stage where they have five to six different standardised customer journeys. One energy company representative described new pro- cesses that it had created, saying: "We cur- rently operate six tailored customer journeys for residential customers and have another six planned for development in the next three months. Within these journeys we are making better use of data and insight to tai- lor the solutions we offer customers, based on their individual circumstances." The journeys included a wide range of support services and solutions for customers struggling to pay, such as: • Flexible payment options; • Flexible debt repayment plans; • Smart meters and other tools to help cus- tomers reduce their consumption; • Referrals to partners offering specialist financial support (income maximisation advice, affordability checks, etc.); • Reductions in debt from a support fund for customers experiencing serious finan- cial hardship. The data the company was drawing on to help was primarily internal customer data: account history, previous payment history, past behaviours, and response rates to differ- ent contact mediums. "This helps us to form a view of the cus- tomer's preferred way to interact, as well as what solutions may be best suited to their needs," they added Covid has accelerated the need for pro- cess change While the financial impact of Covid might not have led to dire debt problems, as pre- dicted at one stage, it has drawn in differ- ent profiles of people. This, plus the hike in energy prices and another steep rise inevita- ble in 2022, has given new impetus to tack- ling the need to produce different solutions and scale them up. One approach taken by an energy sup- plier was to empower agents where possible to differentiate between those who belonged At a glance Here are some of the key findings of the report: Debt is set to increase as inflation and energy bills soar and universal credit is cut A new cohort of vulnerability has emerged – the previously better well-off, which furlough/redundancy has pushed into debt Utility companies are worried about 'just about managing customers' – those new to debt or pensioners that pay their bills but suffer hardship There was an urgent need to introduce digital routes to give just about manag- ing and newly indebted customers more control and processes to deal with their predicament with dignity Journeys needed more personalisation – agent engagement was key, with a need for more focussed training to enable agents to deal with the new types of vulnerability Data sharing, although seen as a solu- tion, was minimal at present, although a project with DWP held out hope There is more scope to harness technol- ogy to inform utilities and flag problems earlier

• Cover