Rethinking how payments are allocated through back office innovation can help utilities improve their customer experience and avoid reputational damage when supporting vulnerable customers in the wake of Covid-19, argues Parseq’s Craig Naylor-Smith.

The last few months have been a testing time for utility companies. Providers have been praised for deferring payments and offering free supply to unemployed people and hospitals throughout the pandemic, all while dealing with a spike in demand from residential properties and significant pressure to support customers.

This pressure has been particularly acute in the context of vulnerable individuals. Regulators, charities and the media have been holding the sector to task on protecting this group for some time, but Covid-19 has pushed providers’ responsibilities even further into the spotlight. Collecting revenue is still essential, but balancing commercial needs and treating customers struggling financially due to the pandemic with care is an even more precarious juggling act.

Pressure to support customers

During such an unprecedented time for the industry, the pressure to support customers has been focused on front line staff. However, their efforts to provide exceptional customer experience to those that need it most can be undermined if the functions that support them are not up to scratch. Today, the channels customers use to interact with their suppliers have become more digital, but the back office has fallen behind.

Payment infrastructure is a prime example. The payments industry has undergone a dramatic transformation in a relatively short period of time. The options customers can now use to pay their bills are myriad, spanning traditional methods, including Bacs, cheques and direct debit and more innovative new models, such as Apple Pay.

However, while utilities have embraced this paradigm shift and made it possible for customers to pay using their preferred method, in the majority of cases they are still behind the curve on payment allocation – which is the process of allocating a payment to a customer’s account.

Potential for misallocation or an ever-growing suspense account

Doing this process manually, when methods of payment are evolving all the time, increases the chance of human error, which could ultimately lead to misallocation, or a payment being held in an ever-growing suspense account. Here, the biggest potential threat links directly back to customer experience. If a payment allocation error is made, the provider could inadvertently chase customers for bills they have already paid.

This could be a very distressing outcome for vulnerable customers in normal conditions. In the middle of pandemic, when every sector’s treatment of at-risk groups is under even greater scrutiny, making this mistake could open utilities up to long-term reputational damage – denting potential customers’ perception of the brand in a competitive market where switching provider has become commonplace.

Utilities can avoid this outcome by adopting the same approach they’re applying elsewhere. Providers are already using technologies, such as automation, to improve the customer experience. Chatbots, for example, handle basic enquiries from customers, freeing up staff to focus on supporting more complex cases and vulnerable customers.

Automating payment allocation and lowering the cost to serve

The same principle is true for behind the scenes. Automating payment allocation, and other key back office functions, using innovations such as robotic process automation (RPA) and machine learning, means staff can focus on supporting those that need it most – not spending all off their time tracing incorrectly allocated payments and managing disgruntled and distressed customers.

Investing in the back office can also improve a utility’s financial health. Sticking with customer payments as an example. If they aren’t allocated effectively, payments can get lost or stuck in an inaccessible suspense account, meaning a provider’s balance sheet might not reflect the funds at its disposal. By automating the process, a utility can create efficiencies and unlock cash that can be used to help lower its cost to serve and make it more competitive in a crowded marketplace.

We’re all navigating a challenging time, but as the world tries to return to normality there is an opportunity to reflect on established ways of working and ask how effective they’ve been when put under pressure. Remembering the back office, and how it can help front line staff support the most vulnerable of us, will help utilities improve their customer journey, and make their businesses more efficient, during this critical period and beyond.

Originally published in Utility Week