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Feb 2022 | Credit Decisions | Data Insights
By Posted by Colette Land

Leveraging data and insight to improve decision making

In response to the pandemic, Experian launched a set of initiatives to support businesses, local authorities and charities in the UK. Each initiative leveraged data and insight to improve decision making.

In addition to providing insight to help food banks prioritise resources in areas where there are high concentrations of customers in vulnerable circumstances, we also offered utilities suppliers the opportunity to pilot Open Banking to help financially vulnerable customers understand more about their finances and support conversations about debt.

The latest figures from the Open Banking Implementation Entity (OBIE) available in Sep ’20 show that over 2m UK consumers have used Open Banking, and over 50% of small businesses claim to have used it to help get access to credit, perhaps it’s time utilities leverage this emerging technology.

I’m pleased to be able to share with you what we’ve learned from the pilots, what’s worked well and what’s likely to come next. This article will cover Experian Open Banking Tools and how it was used to help utilities suppliers during the pandemic.

What are Experian’s Open Banking Tools?

The Affordability Passport is a mobile app that allows (in this case) utilities companies to offer their domestic customers a secure platform through which they can share categorised transactional data from their bank accounts. The process is convenient, secure and driven by consumer consent. In its simplest form, the solution enables the supplier to access (through a web portal) summarised information detailing the customer’s income and expenditure (split by high-level categories that are aligned to a Standard Financial Statement) for the last 12 months.

Experian’s Commercial Acumen is Experian’s equivalent Open Banking tool for businesses, offering commercial customers the option to share their bank account transactional data and accounting data with the supplier to make a quick and informed assessment on, for example, debt repayment plans. The service includes access to the Director’s personal bank account as well as that of the business for up to 3 years of transactions, and also management account information including P&L, balance sheet, list of invoices and aged debtors, all under the consent of the customer.

Our Open Data Platform currently processes 91m data transactions a month.

How was Open Banking used to help utilities suppliers during the pandemic?

I’m pleased by the take up of the Open Banking Covid-19 pilots across utilities. We had a mix of utilities suppliers interested in the initiative and, due to the simplicity of the setup, several water and energy suppliers (including both commercial and domestic) proceeded. The pilots involved a variety of use cases – for example;

  • A domestic water supplier used the Affordability Passport to expedite the process of assessing whether a customer was eligible for social funding tariffs. Previously, financially vulnerable customers provided copies of bank statements which typically took weeks to supply, assess and turn around to inform the assessment. Using the Affordability Passport, the process was completed in minutes and in some cases where the customer remained on the phone, they could immediately take advantage of the reduced tariff.
  • An energy supplier used the tool to assess consumers’ “ability to pay” when considering whether a customer could afford to repay a debt alongside their ongoing monthly energy bills. The Affordability Passport gave the customer the opportunity to agree to share their bank account transactional information with the energy supplier for the sole purpose of using the information to determine an affordable repayment plan. The information obtained from the solution gave the supplier clear, concise and accurate information on the customer’s income over the past 12 months alongside summarised, categorised spending data. This identified the disposable income that could be used with confidence to repay debt. Where it was clear that the customer could not afford debt repayment alongside their ongoing monthly energy payments, additional support was triggered.
  • Commercial Acumen is helping to reveal more about the financial well-being of small businesses and their capacity to survive the pandemic. In the pilot Commercial Acumen is used to get an aggregated view of the day to day spending behaviour of commercial customers (where mutually agreeable) to inform discussions on payment breaks and debt repayment plans, rather than rely on aged filed account information from Companies House.

If you’d like any further information in regards to how we can help your business, please do get in touch.