There may be trouble ahead
As rising bills and economic uncertainty put pressure on household budgets, new entrant utility providers are having to look hard at their debt collection capacity and processes. With the success of rapid growth comes the need to plan for effective debt management before levels rise. When it comes to the sensitive handling of arrears, any lag in capacity will be keenly felt and have uncomfortable repercussions on hard-won customer ratings, business reputation and profitability. Digitally-acquired customers will have high expectations of the processes available to resolve their episode of debt and a swift and flexible digital solution is the best fit for new organisations.
Why collections specialism matters
As the most sensitive part of the business and one subject to a high level of scrutiny and regulation, debt collection processes need to be rooted in industry experience and operational knowledge. The desire to bring a digital application to market has lead to some limited, simplistic offerings which are unlikely to meet the demands of a sector with obligations to all customers including those in difficult or vulnerable circumstances. However, with advances in machine learning capabilities, there is now the expertise to incorporate intelligent ways of alerting operators to potential vulnerability, with strategies in place to respond in a timely and appropriate way.
According to the Ofgem 2018 Vulnerable Consumers In The Energy Market 2018 report “Suppliers need to proactively identify which of their customers might be in a vulnerable situation and offer tailored additional services to help them engage with their supplier”.
Customers front and centre
Understanding that utility providers have customer outcomes front and centre of their collections processes is key. From the outset, new utilities want to make sure every customer is directed to the most appropriate treatment and that no individual slips through the net because of dated analytics or inadequate choices. With competition fierce and customers ready to change supplier when service disappoints, offering a low-stress, early resolution to arrears without lengthy phone interactions makes sense. A digital solution with sufficient options including tailored arrangements and the option of integration with Open Banking, can break the costly reliance on contact centre calling. The resulting free capacity can then be directed to the most complex and vulnerable cases.
The bottom line – everyone benefits
A digital-first approach to collections at this early stage of challenger evolution will support the ethos of customer-enabling, accessible and effective processes while bringing an improved rate of return on investment and more revenue collected. With internal resources at full stretch due to continuing expansion and time to develop complex processes internally running low, a highly scalable modular microservices solution is the sensible consideration. By providing elastic capacity at a fraction of the cost of alternatives, it also helps preserve the competitive edge of new and agile organisations without sacrificing either reputation or service.