Podcast ¦ RO-AR.com: Digital Transformation and Affordability

Key Takeaways

• Increasing Demand for Affordability Assessments: Regulatory pressures are driving an increasing demand for structured affordability assessments, particularly in utilities and financial services.
• Revisiting Affordability Strategies: Organisations that previously overlooked affordability considerations are now revisiting these strategies, leading to productive dialogues.
• Integration into Collections: The integration of affordability assessments into collections processes is progressing at varying stages across energy suppliers.
• Customer Engagement via Digital Tools: While customer engagement through digital tools has become more widely accepted, there remains a digitally excluded group with limited access.
• Steady Open Banking Adoption: Open banking adoption remains stable, with 25-33% of users opting for this service. Trust and data privacy concerns are the main factors influencing this decision.
• Prioritisation of Vulnerable Customers: There is a growing prioritisation of vulnerable customers, with organisations increasingly adopting systematic approaches to manage this demographic.
• Expanding Data Sharing Capabilities: Data sharing and portability capabilities are improving, allowing users to transfer their financial data across different creditors.
• Pandemic Impact on Digital Processes: The pandemic has accelerated the acceptance of digital processes, although traditional methods, such as spreadsheets, are still prevalent in some organisations.
• Reassessment of Affordability: Continuous reassessment of affordability during payment plans is becoming more common, with some organisations implementing quarterly reviews.
• Real-Time Consumer Spending Data: The I&E (Income and Expenditure) data captured through the IE Hub reflects real-time consumer spending behaviours, enabling organisations to make more informed decisions.
• Balancing AI and Human Interaction: Maintaining a balance between AI innovations and human interaction is key, as customer preferences vary widely.
• Rising Consumer Debt and Complexity: The economic outlook points to rising consumer debt levels, with customers facing increasing complexity when navigating support options.

Key Statistics

• 70% of Customers Miss Out on Benefits: 70% of customers miss out on benefits worth more than £400 per month.
• Open Banking Adoption: Open banking adoption rates range between 25% and 33%.
• Expenditure Trends: The I&E data closely follows expenditure trends, reflecting fluctuations in the energy price cap.

Key Discussion Points

• Regulatory Pressures: The evolving regulatory landscape is prompting organisations to place more focus on affordability.
• Vulnerability Identification: The role of vulnerability identification and its impact on service provision.
• Digital Transformation: The impact of digital transformation on customer engagement and service delivery.
• Trust and Data Privacy: Data privacy and trust issues related to open banking usage.
• Organisational Readiness for Digital Affordability Assessments: Variability in organisations’ readiness to adopt digital affordability assessments.
• Consumer Behaviour: Assessing consumer behaviour concerning essential versus luxury expenditures.
• Regular Affordability Reassessments: The necessity for automated and regular reassessment of customer affordability.
• New Partnerships: The implications of new partnerships in extending support services within existing frameworks.
• Customer Navigation of Support Options: How customers perceive and navigate support options amid increased debt complexity.
• Trends in Consumer Spending: Trends in consumer spending patterns in relation to current economic conditions.
• AI vs. Human Touchpoints: The balance between leveraging AI for efficiency while maintaining meaningful human touchpoints.
• Future Challenges: Future challenges organisations may face as they integrate affordability systems into their processes.

Podcast Description

In this insightful podcast episode, Mark McElvanney, Client Services Director at IE Hub, discusses the evolving landscape of affordability assessments in light of changing regulations within financial services and utilities. He shares valuable insights on consumer behaviour, the challenges surrounding digital adoption, and the role of technologies like open banking and AI in enhancing customer journeys. The episode explores the complexities organisations face in delivering effective support to vulnerable consumers and the growing demand for data portability and streamlined processes. Tune in to gain an understanding of the future trajectory of affordability in a rapidly transforming financial ecosystem.