Can location data help tackle the multi-billion pound bad debt problem?
For years, utility companies have reported losing millions of pounds through non-payment of bills.
Latest figures from Ofgem, Ofwat and the Consumer Council for Water reveal that the cost of this debt in the UK is now over £2 billion.
The problem doesn’t seem to be improving, but location data has the potential to help utility companies tackle it.
Accurate and up-to-date location data is helping to build a “digital twin” of Great Britain.
Within the digital twin you can start to integrate other information about demographics, property type, economics and other local factors that could be important to customer management.
By adding the spatial element to what you already know about your bad debtors, you can start to analyse patterns and identify correlating contributing factors.
A customer address is more useful when given an X-Y co-ordinate, or a geospatial location. This could help identify locations where risk may be building – such as areas where council tax is going up, and where there are challenges to the health of the local economy such as reductions in employment opportunities. Location data can also help identify areas of deprivation.
If you know the exact location of bad debtors, you can start to analyse property risk factors in the same way that credit risk is done against the account holder.
For example, you could see if there are trends linked to housing stock. Detailed property-level data can tell you a property’s type, size, age and construction materials. These may be predictors of energy use that, when coupled with other data, may be predictors of bad debt risk.
Then you could start targeted measures, perhaps sending field staff out to read meters in the areas where the risk of bad debt increasing is higher (and with location data you can optimise your route plan to send them out).
Or you could look at treating the problem not the symptoms. For example, you could install a smart meter to help highlight energy use within the household, or insulate the property to increase energy efficiency.
Internal data on bad debt and accurate addressing will help customer onboarding. And when changing utilities, not only can you check credit history on a person, but you can see if the premises they’re moving into may be in an “at-risk” area for bad debts.
The information is at address level and it does not identify individuals, so privacy and data security aren’t compromised.
For many decades Ordnance Survey has been providing detailed location data and services to utilities to help manage assets, customers and other stakeholders. As a government organisation our data underpins significant levels of economic activity across multiple sectors.
To find out how location data can help improve your business, contact commercialenquiries@os.uk