The Impact of Digital Transactions on Public Utility Companies
Public utilities face a future of increased turbulence and uncertainty. To stay competitive, survive disruptions, and meet changing customer expectations they need to adopt new digital technologies that will positively impact their organizations. No one can deny that digital technology is fundamentally changing the world and reshaping how organisations operate in order to provide a better customer experience, achieve greater operational efficiencies, and provide improved security. Channels and technologies are evolving at a rapid pace, opening up new opportunities for companies to gradually offer customers a more digital experience, primarily through digital transactions.
However, this advancement comes at a cost. Utility companies and municipalities must weigh up the cost of digital transformation against the risk of continuing with legacy billing methods which are less secure and outdated CX practices. For those ready to move forward, the most practical solution is to partner with organisations that can help them build an intuitive and secure way for customers to make payments and that also ensures a positive customer experience.
Why digital transactions are thriving
Transactions within a digital environment are defined as online or automated interactions between people and organisations—without using paper. Nowadays digital payments’ penetration exceeds 40% globally with variation depending on marketplace, regulatory, and cultural circumstances. Digital transactions are likely to thrive due to their simplicity, particularly with business-to-business transactions. Consumers will also benefit from their security as the transaction fees are affordable and convenient.
Public utilities have realised the hard way that digital solutions aren’t just nice-to-haves but necessary. Their experiences result from facing different challenges like ineffective billing collection, the unwillingness of customers to pay for poor service or changes in customer behavior.
As per McKinsey and Company’s article “Digital public services: How to achieve fast transformation at scale”, providing digital services is imperative. Investing in digital services allows public utilities to meet public expectations and become more efficient and resilient.
As a result of digital transformation across various industries, today’s consumers face a new era when it comes to paying their bills. The preferences of today’s consumers are evolving to suit the availability of more technology than ever before. Automation is the answer in the utility industry, and providing better bill presentment and payment experiences is a top priority.
Digital bill presentation provides greater ease, speed, urgency, and simplicity. In terms of payment methods, customers are using credit cards more frequently to pay utility bills, as opposed to cheques. As a result of these changes, utility companies are encouraged to embrace digital channels — both for the presentation of bills and for the payment of bills, because speed, ease and convenience are central to the customer experience.
Factors influencing digital adoption
The question is, why aren’t utility payments becoming digital at the same pace as other industries and when will they catch up? Here are the most important indicators that will influence the adoption of digital transactions:
The mobile channel continues to grow. This is according to ACI Speedpay Pulse Report, which found that usage of utility providers’ mobile apps increased from 18.5% in 2018 to 21% in the last year, while over the next 12 months, nearly 23% of customers expect to use mobile alerts more often. With utility companies’ mobile apps becoming more established as a communication and information channel, customers will likely use them for billing and payments.
Focus on strengthening security. The next few years will see payment companies concentrating significantly on improving their cybersecurity framework. Adding a second layer of security to payments may also be facilitated by the Customer Authentication process.
Payment integration. Financial service providers and merchants used to be clearly distinguished. These days, a merchant’s platform integrates payment services. The whole purpose of integrated payments is to give customers a seamless checkout experience.
The key is to implement these practices now and get the relevant elements of process and systems in place.
Utility consumers today expect a seamless customer experience – people don’t think about industry siloes so the experiences they have online shopping or in booking travel will continue to set expectation for all the businesses they interact with. Now the time has come for energy companies to catch up.
Hansen Technologies makes digitalisation the backbone of utility companies and enables them to achieve excellence in digital transactions by redefining customer interactions through product innovation.
Product & Solutions Marketing Manager, Hansen