Utility Week

UTILITY WEEK | OCTOBER 2022 | 29 Customers in association with with us, then the communication will be automatically adapted to re ect the right tone." Dalley says the company has a solid understanding of its customer demograph- ics, adding that it also has one of the largest Priority Services Registers (PSR) in the UK. Rachel Ryan-Crisp, a• ordability and vul- nerability lead at Southern Water, agrees that utilities must focus on identifying sus- tainable and holistic support for customers. She notes that the concept of vulnerability is o- en associated with € nancial di‚ culty, but there is "a vast array of things that can be put into that particular box". "Some of it is, certainly, going to linked to € nancial vul- nerability, particularly in the space of mental health. I think that is an area where we [utili- ties] can have a key reassuring role to play if we can work with customers and relieve them of the stress and anxiety they might feel around their bills," she says. Aligning innovation with customer needs It is inevitable that innovation and new technologies will have a pivotal role to play in improving utilities' ability to identify customers who need additional support, as well as providing more control over how and when they pay their bills. In the € rst instalment of this research, all of the water and energy leaders sur- veyed said that direct debit remains the most important method of payment. How- ever, its in exibility can present signi€ cant challenges for bill payers, particularly those in vulnerable circumstances. A new study from Pay.UK, titled All Aboard – Improving the Payments System for Financially Vulnerable People, shows that more than half of people experiencing € nancial vulnerability have had to borrow cash to cover a € xed payment. O• ering some degree of exibility in bill payments could be the di• erence that prevents a customer from falling into debt or worrying about impending direct debit payments. However, according to our research, most respondents are not yet convinced of the sig- ni€ cance of all innovations in payments. Just 27% said Request to Pay and open banking are signi€ cant to their business at present, while 32% said third party payment apps are currently important. Half of respond- ents also said direct debit enhancements are important for their business. Despite the current ambivalence, the industry does acknowledge the potential for innovation to transform payment pro- cesses within the next € ve years. More than two-thirds (71%) of respondents said direct debit enhancements will be important for their business within this timeframe, while, according to 62% of those surveyed, the same is true of third party payment apps. Almost half (48%) foresee open banking being important for their business within the next € ve years, and 38% said the same of Request to Pay. Bruce Nicholson, credit strategy lead at Severn Trent, says his business is exploring di• erent payment innovations but insists the broad demographics of customers must remain at the forefront of thinking. "We aim to o• er many exible payment methods and we have a duty to our customers to preserve a broad range of payment methods," he says. The customer must remain at the very heart of any decision-making when deploying a new technology. Claire Miller, director of technology and innovation at Octopus EV, explains that getting buy-in is pivotal. "We o- en use beta systems where we give customers the opportunity to get on board, but we'll explain that it's early days so it might not work seamlessly. We'll make it available to them and make it clear that we want to test it and get some data to support next¢steps. "That allows us to explore what works best and what our customers want. Cus- tomer experience is super important to us." For Northumbrian Water, adopting a new tool, like Request to Pay, requires a signi€ - cant trial period to ensure that it is the right solution for customers. "We started trialling Request to Pay last summer, but it's not in all of our cus- tomer journeys. We are using it in the early stage debt journey, so a € rst reminder," explains Mark Wilkinson, head of income at Northumbrian. "It has been a trial rather than a per- manent solution in that we haven't quite worked out where it € ts best in the journey." Understandably, di• erent utilities are at di• erent stages of maturity when it comes to embedding innovation across the billing journey. But the consistent message from respondents was that the deployment of any new technology must be part of a wider, holistic approach to billing and payments revolving around what is best for custom- ers, particularly those facing vulnerable circumstances. Nadine Buddoo, intelligence editor Put customers in control Utilities across the board have identi ed communica- tion and flexibility as the two key methods for protecting customers from falling into debt, both in the tumult of the coming months and beyond. In today's uncertain economy, doubtful debt levels are likely to rise – but prevention is still a powerful tool. By engaging with customers regularly, UK water and energy companies can not only remind customers about upcoming or unpaid bills – they can also continually communicate the impor- tance of their services and why they must be paid for. And by o• ering flexibility in how bills are paid, companies can give customers more control over the payment process and timeline. Innovations like Request to Pay and open banking, which enable better communication and flexibility, show plenty of potential for growth over the next ve years. But utilities know how important it is to keep customers at the heart of their decision making, especially when it comes to innovations. Many have implemented signi cant trial periods to ensure that new technologies are right for their customers. And they've also rightly assumed that customers won't immediately trust new technologies as they're introduced. At Mastercard, we're focused on building safe and smart solutions that people can feel con dent and secure in using. Water and energy companies will need to continue exploring new payment technologies and invest in better communication and billing solutions as the draw- backs of existing ones become more apparent. We also know that new technologies are making it easier for utilities to identify and serve vulnerable customers, using data insights and segmentation. Tailoring the customer journey based on what they need and what they're able to pay is another powerful means of debt preven- tion as we head into an uncertain autumn and winter period. Whether you're adopting innovations now or considering them for the future, they're an impor- tant tool to keep in mind as we continue to adapt to customer needs in this time of economic flux. Mehmet Eryilmaz, VP Real Time Payments, Mastercard

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