Fluctuating energy costs, compounded by geopolitical and economic turbulence, have led to a sharp rise in
credit defaults within the Energy and Utility (E&U) sector. The numbers paint a stark picture: In
the UK, energy debt has reached a record GBP 3.1 Billion, according to Ofgem.
Across the Atlantic, E&U companies are battling a similar crisis, with arrears totaling USD 20.3 Billion in 2023 and 21.2 million
households behind on their energy bills.
For utility organizations, balancing revenue protection with customer retention has never been more
critical. The answer lies in integrating advanced technologies, fostering customer-centric practices and
evolving the maturity of their debt collection processes.
Debt Collection Maturity: The Cornerstone of
Revenue Protection
Achieving maturity in the collection process requires excelling across four critical dimensions. This
maturity ensures the recovery of outstanding debt and establishes a streamlined, customer-friendly
process that builds trust, reduces delinquencies and safeguards long-term revenue.
Case Study
A Leading Utility Increases its Debt
Collection by 50 Percent with Predictive Analytics
Read More
1. Data-driven Debt Collection Model
A mature collection model offers a structured, data-centric approach to assessing and improving an
organization’s debt recovery processes. By focusing on the entire collection lifecycle, from onboarding to
write-offs, and leveraging a blend of strategy, analytics, automation and manual efforts, organizations can
optimize collections, enhance customer experience and minimize bad debt.
Left-Shift Strategy
The "left-shift" approach prioritizes proactive measures to address potential delinquencies earlier in
the collection lifecycle. Focus areas include:
Proactive Engagement
Leverage predictive models across different stages
Digitization
Use digital tools to minimize manual efforts for low-risk accounts
In today’s volatile environment, a mature collection model empowers organizations to transition from
reactive to predictive practices, driving improved efficiency and reduced bad debt through data-driven
strategies. By optimizing the use of automation and analytics while focusing manual efforts on critical cases,
it enhances customer experiences with personalized, predictive engagement. This left-shift approach minimizes
costs, boosts recovery rates and ensures sustainable financial health.
2. Performance Metrics That Drive Debt Recovery
Metrics provide the compass for an optimized debt recovery process. Organizations can measure efficiency,
customer satisfaction and areas for improvement by tracking critical indicators such as:
Visualizing this data through automated dashboards and correlating metrics like
Connects vs. Promise to Pays (PTPs) or Kept Rates vs. Volume
can uncover hidden patterns that drive actionable insights.
Additionally, empowering Customer Experience (CX) teams through advanced digital training can significantly enhance
outcomes. Programs focusing on conversation management, identifying vulnerabilities and negotiating payment
plans elevate team performance and improve overall collection success.
3. Advanced Analytics for Smarter Decisions
Many organizations rely on best-in-class platforms and advanced reporting tools but interpret the data output in
silos, limiting its strategic value. A unified, AI-powered dashboard can overcome this challenge by
providing:
By adopting predictive analytics and a holistic customer interaction strategy, businesses can improve debt collection by 50 percent while reducing
operational expenses by 20 percent.
4. A Digital-first Infrastructure with Cloud, Gen AI and Automation
Modern technology plays a pivotal role in accelerating outcomes in debt collection. A balanced approach –
combining human expertise with digital investments in channels such as WhatsApp, voice bots and self-service
options – is key to enhancing CX and reducing operational costs.
For instance, Gen AI-powered platforms enable natural conversations, facilitating payment plan
negotiations, capturing promises, understanding vulnerabilities, providing debt settlement options and boosting
contact rates.
Cloud-based solutions, such as Contact Center as a Service (CCaaS), coupled with automated workflows, further
optimize infrastructure, amplifying both efficiency and revenue.
Transforming Debt Collection: A Strategic Imperative
Traditional, manual approaches to debt collection can no longer address the growing complexities of the utility
sector. Organizations must adopt AI-driven intelligence, leverage digital-first channels and harness industry
expertise to elevate their debt collection maturity. The benefits are clear: Stronger revenue protection,
reduced operational costs, enhanced customer satisfaction and a future-ready collection model.
Keen to assess your organization’s collection maturity against industry benchmarks? Click here to take our free assessment.