Post Pandemic Trends for Utilities
The COVID19 pandemic triggered a series of issues that impacted businesses worldwide. Lock downs of the population, closure of non-essential businesses, layoffs, forbearance and credit reporting delays have impacted cashflows, increased disputes and complicated risk management. Utilities are not immune to these challenges and were forced adapt.
Utilities are considered “essential” at all times since they are the cornerstone of modern civilization. But their importance is highlighted when the world is shut down but people need heat and hospitals require electricty. As consumers accepted the "new normal" their expectations of businesses changed significantly. This past year has accelerated adoption of new technologies and reinforced traditional industry concerns. Here are a few takeaways.
Mobile and Digital Payments are on the Rise
In a September 2020 report from the International Data Corporation, they found that nearly three quarters of retail spending during the pandemic occurred online, with more than 20% of U.S. consumers using touch-less payments, kiosks, and mobile ordering for the first time. In addition, 23% of customers said they are now paying for goods using mobile or alternative payments, and more than one third (38%) reported feeling safer when touchless processes are in place. These shifts in consumer behavior are especially impactful for utilities.
When a utility provides digital payment options, they receive several benefits.
Increases in biller revenue through fewer late or missed payments
Reductions in the costs associated with shutting off and reestablishing service
Mitigating the need for collections.
To gain these benefits and capitalize on the change in consumer preferences, utilities focused on EBPP adoption.
Electronic Bill Presentment Gains Importance
Utilities around the world have been early adopters of electronic bill presentment and payments and it’s easy to understand why. EBPP provides a frictionless bill solution that accepts multiple payment types while communicating to consumer in their preferred language. And it minimizes dispute costs associated with customer service and IVR.
With more people using digital wallets, mobile apps and the internet for payments, providing a bill timely and conveniently has never been more relevant. Plus, the drive to reduce carbon and recycle increases the utility’s “green” credibility. Adoption is on the rise and EBPP functionality is expanding.
According to EESPA, electronic bills have increased by over 33% in Europe.
Worldwide there were 18.2 billion EBPP transactions and they are expected to reach 30.7 billion by 2027
Multi-lingual, multi-currency support for bill payment are now integral to EBPP solutions.
Non-Traditional Credit Reporting Addresses Gaps
With the CFPB issuing credit reporting guidance during COVID-19 Pandemic, utilities and other billers no longer had access to valid risk prediction tools. But as an essential industry, new accounts still needed to be added, bills dispensed, and collections completed. So, many companies turned to new information and analytics solutions to augment their risk analysis.
Some of the tools that helped them make decisions include:
Check and retail transactions
Confidence score and micro-indicators
AI and machine learning
The pandemic has reinforced the need for utilities to accommodate their customer’s preferences. As more people continue to work from home or on the go, they need seamless and intuitive ways to manage their finances. Younger consumers expect mobile solutions tied to their preferred payment methods. Utilities need to partner with providers that understand their unique environments/customers and can offer technology that anticipates the changes in the payment landscape.