Energy prices around the globe have surged since the advent of the war in the Ukraine. As an example, wholesale gas prices in the UK have increased by 145% since July and the country’s energy prices overall have risen 90% over the past year.
This, coupled with other rapidly rising living costs are impacting the UK’s annual inflation rate, which has accelerated to a 41-year high of 11.1%.
While there is currently a price cap in the UK to protect consumers from the extremes of energy price increases, the cap is not indefinite. Once lifted, energy retailers will come under intense scrutiny by government and regulators on how customer debt is managed. And these challenges are not limited to the UK; as climbing inflation places increasing pressure on household finances around the world, adaptive and robust debt management has become critical for energy retailers.
Configuring debt management
Debt management can be complex. Not only will energy retailers have their own internal processes and rules, there are also country-specific debt management regulations to comply with. These things have an impact on the retailer’s ability to deliver excellence as well as keep the cost of debt management within acceptable parameters. An automated debt management solution is an excellent way to ensure there is rigour in the debt management process, configurability to meet fluctuating business needs and external factors, and to ensure a strong customer experience.
Here’s Flux’s take on how a good automated debt management solution can add value:
Rapidly flex to meet changing regulatory and situational changes
To be truly customer centric and adaptable, energy retailers need to have multiple treatment paths for debt management. And these paths need to be adaptable as the landscape changes. Automated debt management tools can be configured to the energy retailer’s unique requirements and optimises the process for specific actions such as payment reminders. They provide the ability to differentiate debt paths according to certain criteria, for example: residential or commercial customers, new or long-standing customers.
Improved customer experience
The goal of automated debt management is to act as the fence at the top of the cliff. To ensure that impact or risk to both the business and its customers is managed and minimised. The intelligence built into an automated debt management solution ensures customers are moved through debt stages at the right time, intervening early, and at volume if necessary. This early intervention provides a much better experience for the customer who no doubt does not wish to fall into a bad debt scenario, by enabling the business to respond before the situation has the potential to escalate. Automation also brings a greater degree of accuracy as it reduces, and in some cases eliminates human error, and this frees up staff to utilise their time on more value-adding tasks.
Reduced cost to serve
With staff freed up to work on more valuable tasks such as debt recovery and important compliance matters, and a machine automating the debt management process, the cost to serve is therefore reduced. Furthermore, with an intelligent system that intervenes early and improves accuracy, the probability of bad debt is reduced resulting in a more profitable business.
Proactive debt management
Good debt management solutions will enable proactive actions to be taken, for example: handling credit balances. The technology can be used to monitor large or persistent credit balances and trigger automatic notifications to customers. Not only does this mitigate the risk of bill shock should the consumer be unaware of their energy consumption, and provide a positive customer experience, it also ensures the retailer complies with regulations. Another example is monitoring of instalment-based payments. The retailer can monitor the efficiency and status of customers on payment plans, enabling early intervention and potentially avoiding the need for a full debt treatment path.
Integration with third-party systems for customisable communications
The fifth benefit of automated debt management solutions is the ability to customise communications that are sent via third-party systems, such as CRM, push notifications or email. Debt path events can trigger comms to be sent via specific channels in real time, with customisable messaging that can be adapted depending on the situation. Not only does this ensure the retailer is proactive in its debt management processes, the APIs will also ensure that ERP and CRM systems always have the correct information, bringing accuracy, efficiency, and real time analytics.
Technology designed for energy retailers
Like most things, not all technology is created equally. Flux’s tech was developed specifically for the needs of organisations that make, move, and distribute energy. We’re well versed in energy retailers’ requirements for simplifying BAU processes, meeting regulatory requirements, and delivering excellence across the board.
Our configurable debt management tool provides the advantage of shared functionality but adapts to the nuances of different markets to ensure compliance with local regulations. We operate in a state of constant evolution, striving to find smart solutions to our clients’ pain points and always looking for new ways to make our platform more configurable. Our goal is to automate as much of the process as possible so that our clients’ teams can focus their time (and energy!) on the things that matter the most.
If you’re interested in how Flux’s automated debt management solution could help your business, get in touch with the team to book a demo of our solution.