Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
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26 | 5TH - 11TH SEPTEMBER 2014 | UTILITY WEEK Customers Market view T he government's scheme to rollout smart meters in every British home by 2020 has been met with a degree of consternation. The objective of smart meters, which automatically take gas and electricity usage readings and transmit the information back to suppliers, is to reduce costs since energy consumption will become more visible and therefore more controllable for households and businesses. However, beneath the surface there is a concern that the meters are not secure or encrypted enough, and are therefore suscep- tible to hacking. This presents a real concern, both for cus- tomers and utility companies. There is a general view that the security of the proposed smart meters is too simplis- tic and weak. The personal data collected is oen sent via the mobile data network, since companies are reluctant to transmit via broadband services which would open them up to liability if a meter was hacked. However, hacking into the 3G and Wi-Fi space is commonplace and as such the customer has ample right to be concerned about how data collected on them is used, or misused. Furthermore, it is not just those involved in data collection and transmission that should be aware of security concerns as the rollout of smart meters closes in. The entire supply chain's security needs to be addressed. For example, what happens to the data held on a device when the meter is removed from the wall? From a micro to macro level it is also a concern if multiple devices could be compromised, because this would affect the national power grid. The simple truth is that, as the organisational boundaries and types of customer data increase, data security is an increasingly vital issue for the utilities industry. Consumers are increasingly aware of the data trails they produce and how this infor- mation is being used by companies. Nowa- days, personal information is intrinsically linked with trust; and customers expect companies to use and secure their data in an appropriate manner. It is therefore a big problem for utilities that a 2012 study by the Reputation Institute showed that most UK consumers would be happier to trust a bank with their data than an energy provider, despite recent discontent and scandal over the integrity of the finan- cial sector. This paints a dark picture of how trust in the energy sector has tumbled, and a recent report from Fujitsu called DataHeaven or DataGeddon? suggests experience with data may be significantly to blame. The report, which was based on survey results from 3,000 UK consumers, showed that 32 per cent of respondent had little or no confidence in utilities to manage their data security. There is the perception that customers are more willing to trade personal informa- tion in exchange for better service, a crucial element to the smart meter initiative. How- ever, the report indicated nearly half (43 per cent) of consumers felt they did not see any improvement in the services they received as a result of sharing their data with their utility companies. One in ten also felt their personal infor- mation was being used to extract more money from them. Only 6 per cent of those surveyed believed their utility company gave them a better service by using their personal data. It is clear that consumers feel they are receiving no improvement in the services they receive, despite sharing their data. As smart meters become more and more commonplace it is essential that utility com- panies try and repair this damaged trust with their customers. Most consumers do not tend to personally identify with their energy data as they may do with their banking data. It is frightening to think of your bank account details being hacked, but as the data collected on our util- ities use increases, and becomes more intel- ligent, it could be exploited in an equally nefarious manner. The data could be used to not only indi- cate where you live, but also, based on con- sumption, when you are in the house or if you live alone. It is hugely important that we gain more understanding of our energy use in domestic and business environments and seek more routes to reduce consumption. Smart meters do help this, but what is imperative is that utility companies take the security of them seriously in order to restore consumer trust. Aer all, if trust is already an issue it begs the question as to what the fallout of a full scale breach of customer data would be. Graeme Wright, associate director of utilities, Fujitsu UK & Ireland Data doubt Smart meters will allow consumers to better control their energy use, but a large number of people don't trust utilities with their data. Graeme Wright asks, are they right to worry? TUMBLING TRUST of consumers say they have "little or no" confidence in utilities to manage their data securely 32% Trust in utilities to manage personal information securely*: 2003 3.18 2013 2.84 SIX the percentage of consumers who strongly believe their utility company gives them a better service by using their personal data ONE IN TEN feel that their data is used by utilities to extract more money from them. Source: DataHeaven or DataGeddon? Fujitsu 2014 *average points, where 5 is highest