Guides

Guide to open banking and smart data in the energy and utilities sector

30 July 2024

In January 2024, research from UK charity Citizens Advice revealed that 5.3 million people were in debt to their energy supplier. Against a backdrop of cost-of-living increases, there’s been a strong focus for UK households, businesses, and public sector organisations on rising energy costs and water bills. Opportunities to reduce the size of bills, and for utilities companies to find more cost-effective ways to manage payments, and accurately assess future payments, are vital.

Open banking is already playing a key role in delivering some of these opportunities and there are  powers set out in the proposed Digital Information and Smart Data Bill, to expand data sharing initiatives. These will provide additional opportunities to unlock innovation, competition, and economic benefits for consumers and SMEs across seven key sectors:

  • banking
  • energy (including fuel and utilities)
  • finance
  • home-buying
  • retail
  • transport
  • telecoms.

Our guide explains how open banking and smart data can help to transform how energy and utility services are consumed, managed, and paid for. This includes handy QR payment codes, alternative and efficient ways to top up Pay-As-You-Go meters, and affordability assessments for financially vulnerable customers.

Open banking can also offer energy and utilities firms cost savings on some card-handling fees, and administrative benefits, including in one case, reducing a three-week paper-driven process to an online experience of about 7 minutes.

Flexible ways to pay regular bills

The guide includes a case study from Ordo and Eviden, whose FlexiPay payment solution offers a new way to pay regular bills, such as utilities and water bills and is a flexible alternative to Direct Debit and card-on-file instructions, enabling flexibility on the amount and frequency of payments to cover a bill, suiting a customer’s finances, rather than a set amount on a regular fixed date.

This can help customers avoid arrears, and is useful for people such as gig economy workers, who don’t have a fixed income profile.

Energy costs for small businesses

Many of the UK’s SMEs also need more flexibility with their utilities payments, particularly as they are not protected by the energy price cap,  with some spending up to 20% of their total business costs on energy consumption. Our guide explains how open banking applications can analyse financial data in near real-time to assess a business’s spending patterns and energy usage, offering recommendations for less costly utility options based on actual consumption data.

We also look at a new SME energy marketplace, VoltView, which can help SMEs source alternative suppliers. By utilising half-hourly smart meter data, retail tariff data, and credit checks, VoltView’s marketplace can offer supplier recommendations based on their energy profile and access to a repository of relevant grants.

Moving to a data-driven economy

Open banking has highlighted the extensive range of opportunities that can benefit consumers and businesses when customers are put in control of their data. The Department for Business and Trade estimates that commercial opportunities created by personal data mobility have the potential to increase GDP by £28bn.

This is particularly true of the energy and utilities sectors – gas, electricity, water, and fuel – the cost of which is a key concern for many businesses and consumers.

As we move forward under the new government, the implementation of a new Digital Information and Smart Data (DISD) Bill will be crucial in realising these benefits to end-users across various sectors. It will also support the transition to an innovative, data-driven economy.

Read the guide