FinTech Connect 2019: Key Takeaways
Somo's CSO Ross shares his thoughts on the future of financial services and how companies can create real product differentiation.Read more
What a way to start the day! On the 6th August, we hosted a webinar bringing together some of the leading innovators in the utility industry to discuss what the future holds for the sector and how digital can help brands differentiate in a highly commoditised, price-sensitive market.
The event featured future-thinking industry experts, including Philip Steele (Future Technologies Evangelist at Octopus Energy), Sarah Merrick (Founder and CEO at Ripple Energy), Philip Clayson (Chief Digital Information Officer, formerly at SSE Energy Service and TalkTalk), and our very own Chief Strategy Officer, Ross Sleight, who chaired the event.
Many thought-provoking and challenging lines of discussion were covered with our panellists. Themes of Somo’s utility white paper were echoed throughout as panellists identified how both challengers and incumbents can differentiate in the sector. Price still seems to be the number one determining factor for customers when choosing a provider. The ultimate goal for energy companies in an era of intensifying competition should be to change customer priorities, so that customer service, trust, product and service innovation, are more important for customers than price.
Customers' focus on price is one of the key barriers to growth for smaller providers, but Sarah Merrick, founder of Ripple Energy raised an interesting solution to this issue. Ripple is looking at giving customers the chance to buy shares in the co-operative that owns their windfarm. Customers that own the means of energy production, such as wind turbines or solar panels, tend to be much more engaged. This strategy would allow everyone to experience the feeling of generating their own energy, no matter where they live, helping to drive customer engagement and to get them to think more about where their energy comes from. Also, it may promote loyalty amongst a more engaged customer base.
We couldn’t have a conversation about utilities without talking about smart homes. The role of utility companies in a world where tech giants are continuously releasing new technology is a fascinating angle. Phillip Clayson views this as a challenge for utility companies as the market’s adoption of Amazon products is much quicker than products released by the ‘Big Six’. He explained: ‘Amazon has far more resources being thrown at this than we (utilities) do even collectively. So, I think there’s a lot to do if we’re to go head-to-head with the likes of Amazon and their ecosystem.’ However, Phillip Steele, Future Technologies Evangelist at Octopus Energy, views the future relationship between utility companies and tech giants as more of a partnership arrangement. The Amazons and Googles may sell smart home products or even electric vehicles, but it’s how it connects to a tariff that’s really important to a utility company.
Smart meters have previously failed to provide customers with greater energy management and control. Our white paper found that 'only 23% of respondents with a meter say it has helped them to better monitor and understand their energy usage'. However, going forward, smart homes should give customers the ability to monitor their appliances, manage their energy and use preventative diagnostics and detection for their appliances. Utility companies should ensure they are equipped to meet the change this will bring to consumer behaviour.
Utilities are behind other sectors when it comes to digital transformation. However, COVID-19 has accelerated both utility companies’ and consumers’ adoption of digital services, with our panellists pointing out that digital-first businesses have been the least impacted by the pandemic. Digital transformation has now picked up in the industry as challengers have entered, unencumbered by legacy systems, processes, and driven by a complete focus on customer needs.
Sarah Merrick argues that ‘If they [utility companies] want to protect their position, then they have to embrace smart digital tech’. It's essential that incumbents focus on providing value to customers or face an ever-decreasing market share. The conversation around this point brought the webinar to a fitting end with the key takeaway that ‘Transformation is a necessity, not a luxury’.
Throughout the webinar, it was clear that customers are demanding to have more ownership and control over how they use and manage their utilities, and there’s a large appetite from the utility providers to deliver this. Those that can accelerate their digital transformation and provide innovative solutions that enhance customer experience and give control back to users, will ultimately succeed in a rapidly changing industry.
You can download our utilities white paper here and watch the full webinar recording below:
The webinar took place as an addition to a series of white papers we’ve created over the past 18 months. Previously, we’ve looked at financial services and whether digital-only banks are the future of the sector. We’ve also researched whether consumers are ready to switch to electric vehicles and what barriers are standing in the way of mass EV adoption. Keep an eye out for our next one in the coming months!