Customer Vulnerability: Can third-party data help make a difference?

Anyone can find themselves in circumstances that make them vulnerable and this situation may not be permanent. Vulnerability can include those in financial difficulty, those of pensionable age or customers […]

By Priyanka Shrestha

Anyone can find themselves in circumstances that make them vulnerable and this situation may not be permanent. Vulnerability can include those in financial difficulty, those of pensionable age or customers with a disability.

Supported by industry regulators, utilities are looking to understand the different dimensions of “customers who are in circumstances that make them vulnerable, including their drivers and what works and does not work in helping them.” [1]

Therefore, in order to provide the best-possible level of customer service, help those who are truly vulnerable and avoid fraud resulting from misrepresentation of a customer’s personal circumstances, utility companies need access to accurate and up-to-date information on their customer base. This is where third-party data suppliers can help, an approach has been outlined in Ofwat’s ‘Vulnerability Focus Report’:

  • Effective use of data will help companies to understand their customers and identify those in situations of vulnerability
  • Sharing of data, information and resources is helpful when supporting customers
  • Partnership working with other utilities and other third party organisations has been shown to be effective in identifying and assisting customers whose circumstances make them vulnerable

Utility companies can already access some third-party data to enhance their understanding of vulnerability. This additional insight can help them make accurate, informed and consistent decisions which take into consideration data on factors such as:

  • Residential status, e.g. indications of Social Housing;
  • Household composition, i.e. the number of adults and children living in a property;
  • A customer’s current financial status, e.g. County Court Judgements and existing credit accounts;
  • Measures of a customer’s wealth, income, affordability, indebtedness.

However there is no single third-party data supplier that can help utility companies verify all aspects of a customer’s vulnerability. While there is some movement on government departments introducing wider data sharing powers and making some of their data available, which would make it much easier to assess some aspects of a customer’s ‘vulnerability’, there is still some way to go before such data is available.

A wider range of data could be used to gain a better understanding of more areas of customer vulnerability. Utility companies would have a better understanding of a customer which would help them assess their level of ‘vulnerability’, segment their overall customer base and devise and allocate focused treatment strategies for how best to treat these individuals. This would ensure that those who are identified as being in ‘vulnerable circumstances’ could be given the help that they need at the earliest-possible opportunity.

Regular processing of third-party data and proactive monitoring to identify changes in circumstances has the ability to help guarantee that customers who are genuinely ‘vulnerable’ are provided with help. While there is still some way to go before utility companies can easily assess all aspects of a customer’s ‘vulnerability’, the use of currently available third-party data should be harnessed while the industry awaits further developments around data sharing.

By Rebecca Hammond, Head of Utilities, Equifax

[1] https://www.ofwat.gov.uk/wp-content/uploads/2016/02/prs_web20160218vulnerabilityfocus.pdf

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