With the final determination of PR19 setting out the toughest price controls the water sector has faced since privatisation, every option for reducing unnecessary cost is on the table and debt collection operations are no exception. Digital transformation may have been on every department’s wish list two or three years ago but it’s now it is essential rather than merely desirable. The demands of PR19 and the forthcoming cuts to household bills required throughout AMP 7 mean sluggish infrastructure and old-fashioned processes won’t meet the service levels the regulator requires and the customer expects.
As all parts of the industry are seeking to respond to the regulator’s demands for innovation, in collections at least, the focus is clear. Engage more customers, resolve more arrears and do it all with less expenditure without sacrificing customer care. No pressure, then?
As a communication-based, data-driven customer service, debt collection has been a quiet beneficiary of the digital technology revolution. Under budgetary constraints, the sector will be looking for future-proof investments rather than quick-fix promises, with underperforming systems coming under scrutiny. A more nimble, microservices-based approach to collections is going to be essential in the coming year as efficiency demands grow. Fortunately, the big capital spend projects of the past have been replaced with a lower risk service spend, where expenditure equates more fairly to delivery, usage and time to value.
What tangible results can digital innovation bring?
Departments currently relying on letters and phone calls are likely to see digital engagement rates substantially higher than existing dialler activity and 3-5 times higher than two-way SMS channels, depending on circumstances. The level of optimisation possible, particularly when adding in technologies such as machine learning, mean that contact centre capacity and the amount of debt collected can be vastly improved from the outset. Reducing contact centre reliance won’t necessarily mean reducing personnel but it allows greater flexibility when deciding how to deploy staff and creates a useful elastic capacity to absorb cyclical fluctuations. This can have a positive impact on meeting SIM/ C-MeX targets, with shorter call waiting times and agents under less time pressure during calls, leading to better first-time resolution and better fairer outcomes overall.
Looking beyond early collections, agent activity is now supported by augmented intelligence-based decisioning with an unprecedented level of visualisation and strategisation advice based on what is known about each individual customer, in real-time. Individual actions are more accountable and transparent, with built-in audit trails guard against wasted repeat or duplicated actions. The scope and depth of information that can be used in decision-making and segmentation, from both management information, analytics and via machine learning is transformative. When transformation can improve customer experience and result in a lower cost to collect, it’s a proposition that the water industry can ill afford to delay any longer.