And 38% of those households are struggling to pay and then making active decisions about whether to heat their own homes. All cut food on their table, heat or eat. This is a story of how AI innovation is tackling the 4 billion UK energy debt crisis. By rethinking how people pay their bills, Fliss Berridge and James Sharpe provide a solution helping vulnerable households manage their bills through compassionate collections.

I've called it compassionate collections with kindness. It, compassionate collecting of money that is owed undeniably. We have built in partnership an intelligent recommendation engine that consumers to break that payment down into small act, manageable chunk based on the intelligence that we gather from account information services.

It's like having a critical friend for your bill payment gives you nudges. It does it intelligently and compassionately.

Hey, before we dive in, can I please ask you her a big favor? If you are enjoying these conversations and getting value from the insights our FinTech beers share, please hit the subscribe button below. This is the easiest way to support the show, and it could mean a lot. My commitment to you is every single week I'll continue to bring more founders and product leaders that share with us the strategies that are working today to drive innovation and FinTech growth.

Thank you. Thank you. Thank you.

[00:01:22] Monica: Hi Fliss, hi James. So today we're going to have a very relevant chat because We all talk about the future of the industry is where fintechs and big players come together and basically we make the pie bigger, right?

[00:01:38] Monica: It's all about collaboration and playing to everybody's strengths. And you guys have done an amazing job to do and not only coming together to collaborate, but to do it, putting the customer at the center of everything that you do. So you're going to have a ton of impact with this product. So I want to start with the size of the electricity debt book in the UK is 2.

[00:02:04] Monica: 5 billion. That's a ton of money and this is the beginning of your journey. James, can you expand on this story?

[00:02:13] James: Yeah, I think the start of this story is a very human story, actually. Through various things that have happened geopolitically and stresses that have hit the UK particularly, we have seen a cost of living crisis.

[00:02:34] James: It's not unique to the UK, but the UK is particularly hard hit by this, and a specific sector, the utility sector, gas and electricity, dual fuel energy suppliers, increased their rates for their their energy supply to a point that lots of people found it very difficult to make payments. And in fact, I'll talk about some of the statistics later on, but we are seeing, Large numbers of households, 22.

[00:03:03] James: 5 million households in the UK pay regular bills to their utility company and 38 percent of those households are struggling to pay and then making active decisions about whether to heat their homes. put food on their table, heat or eat. So it's an enormous problem. And as a result of that, we are seeing changing in changing in payment behaviors and habits, and an increase in defaults arriving from those household consumers.

[00:03:35] James: And that's what has driven this enormous debt book, this increase of debt book on the balance sheet. Of all of the utilities in the UK, and the figure that you've quoted there, Monica, was a figure that was 13 months ago when we came together to try and solve the problem. The debt book now is in fact over 4 billion in the UK.

[00:03:57] James: So it's an enormous problem for the utilities. That debt is going to arrive on consumers at some point in the future, creating a furtherance to that cycle of hardship. And there must be a better way for us to approach. Societal good and helping people make their dues and continue to live the lives that they want to leave, but also dealing with this huge crisis that's now in our utility industry.

[00:04:26] James: So that's what brings us here today.

[00:04:28] Monica: Yes. And then not only you're solving a huge problem, like 4 billion, it's just like dreadful, right? It does make you like, be like, there is, I always made a difference between, Hey, I'm from Mexico. I live in Asia. So I see us as developing countries, but I lived too many years in the UK and I used to see the UK as a rich country.

[00:04:50] Monica: And I was like, people struggle financially in Mexico. But now it's no, people struggle financially in the UK a lot. And one of the things that I struggled a ton in the UK was the weather. I cannot imagine. We

[00:05:07] James: struggle with that too, so you're not alone.

[00:05:09] Monica: Oh I know, But it's I genuinely, I used to live in a house with heating and I was freezing every single time.

[00:05:19] Monica: I really cannot imagine people going through the struggle of, hey, I need to either choose between getting heating or paying my bills in a country like the UK.

[00:05:30] James: Yeah, and it's getting worse. And actually, we'll talk about perhaps why. Large parts of the population struggle to pay their utility bills and the way that you utility bills are structured in a moment.

[00:05:43] James: But yeah, you're absolutely right. People are switching off their energy. They're reducing their energy prices. And we've had a particularly cold winter this year. And the most vulnerable are the ones that are turning off They're heating older people with young families are turning off their heating because they simply cannot afford it.

[00:06:03] James: There has got to be a better way forward. And we have seen with enabling technologies and the magic of open banking, that there is a way to solve this problem. That's a financial crisis, but also put in your capitalist hat on fixing the problem in utilities and creating a normal shareholder value. So we think we've come up with something really remarkable here and we are super excited to talk about it today.

[00:06:27] Monica: Cool. Can we just go straight into it and tell us what is this thing?

[00:06:30] James: Yeah in a one liner built on, regulated open banking we have built in partnership an intelligent recommendations and notification engine that helps Consumers that struggle to pay a single large payment once a month to a utility to break that payment down into smaller, manageable chunks based on the intelligence that we gather from account information services, basically and it basically works with that consumer to make sure that they meet the dues, because there is a, Statutory right and requirement for them to do that, but we do it in a way that's kinder to them.

[00:07:16] James: That's what we have built on. We think it will change the way that the collection mix looks inside a utility company, and it will offer a credible alternative to the single. large payment of direct debit once a month versus the expensive once a month payment on a credit card. So it's somewhere in the middle there and it serves all customers, but it's particularly good for those that are vulnerable on benefits work zero as contracts or are in the gig economy whose income profiles are a bit lumpy and bumpy.

[00:07:53] James: And it's harder to predict whether they would have the means to pay. So we just help them do that.

[00:07:59] Monica: And that's why it's called FlexiPay. Flexible payments,

[00:08:01] James: yes, that's it.

[00:08:03] Monica: Yes. So this, exactly this is the second time that you come to the show. So you're a purpose driven founder, double stamped. Can you tell us like, why is this unique and why does it have social impact?

[00:08:23] Fliss: So as James was saying, it, it tackles both sides of the situation. I call it, James talked about it turns bills into a manageable way for customers payers. To deal with their finances and I've called it compassionate collections, with kindness. It's compassionate collecting of money that is owed undeniably.

[00:08:47] Fliss: It's not letting people off their bills. It's not discounting. It's, not only referring them to debt management, it's compassionate collections where Every bill owing is paid and can be paid in a more manageable way and then on the utility side, from a business's perspective, it's turning their customers that were seen historically as risky.

[00:09:13] Fliss: And high cost to serve. It's making that smoother and more manageable and more palatable. Now, for the utilities, FlexiPayments gives them an easier, more efficient and low cost way to serve those customers and to reach those customers. So from both sides, from a consumer and from a bill payer. It helps and instead of this negative spiral where those on lower and or lumpy incomes are finding life even more difficult than those of us that are lucky enough to have a bit of a float in their account at the end of every month, it's turning that negative spiral where things just get worse and things are just harder.

[00:09:57] Fliss: Into a win situation. And that's just fantastic. And that's why order were fully behind the evident solution in our partnership, because it serves the need on both sides, businesses and consumers.

[00:10:11] James: Just a couple more points to that. What we've done here is we built something that deals with the 3 inertias that are surrounding the way that consumers engage with their utility.

[00:10:28] James: We have a prevention capability preventing people creeping into areas and falling away. And it's important to bear that in mind because talking to utilities, they're telling us. If they engage a consumer in that first month where hardship is creeping in, they have something like a 95 percent chance of recovering all of their dues.

[00:10:51] James: If it's three months, and it's typically three months before the utility spots that a consumer has failed to pay twice, and on the third month they go, hang on, what's going on? At that point, there's about half a chance of recovering all of the dues. And if that continues to over six months, then you've got almost no chance without going to nuclear auctions of getting county court judgments and entering people's homes and taking their their possessions, which is not a place anyone wants to be.

[00:11:24] James: So we can, deflect up front in that prevention phase. We've spoken about the ease of collections, the secure, frictionless, smaller bites of that due. through consent via the open banking platform. So that's the heart of what we do. But then the last bit of it is when we find people that are unfortunately in areas, they are in hardship.

[00:11:53] James: It's often very, difficult for those people firstly to speak about it. And then it's quite intrusive, the recovery motion, the way that the affordability check is done, how they prove what their income has been over the last two or three months, the manual process that, that takes, and often it's quite demeaning or it's very scary and those that are particularly vulnerable find it extremely difficult.

[00:12:21] James: And we have a method to ease that as well. So we've really thought about the problem not only in terms of the financial, the reward that our customer, a utility would get, but actually covering many bases in that organization. So it's not a good idea. It's a great idea because it solves about 12 different problems, right?

[00:12:42] James: It's really elegant.

[00:12:45] Monica: Yes, it is. And actually exactly like you've gone through a ton of product development, let's say, but please, you said something very important that it was compassionate collections and collecting with kindness. And this week, we were talking about customers.

[00:13:04] Monica: I was sharing some of the insights that we had been thinking about. And then I stopped and I said, by the way, all these came from us sharing our experiences. So it's not just. Words on the page, all these are emotions that came from many people. And I love that it's we can't have all the methodologies in the world and design thinking and follow the process.

[00:13:28] Monica: But I do believe that we need to put emotion in the thing that we're building to really make a difference. Can you guide us through how did kindness get into the process? This build.

[00:13:42] Fliss: Sure. People have a relationship with money, whether they realize it and are aware of it or not. And it can be quite deep seated psychological reactions to situations concerning money.

[00:13:58] Fliss: And when we. Built our system, for example, several years ago now, we took out, some, we did an exercise with a customer experience company to help us design our system and the look and feel of it to give people calmness and comfort when they were doing these actions of dealing with their money.

[00:14:21] Fliss: Because there are two things that people tend to be quite often nervous about in life. One of them is finances. And one of them is new tech. So put FIN and tech together, people are going to be often quite nervous about dealing with your solution and your service, couple that with an essential bill that In that sort of, to get all philosophical, Maslow's triangle of needs, that bottom rung of safety, home, warmth, as you were saying about the British weather, it goes fundamentally to people's survival and, how they live day to day and how comfortable all Or not, that is.

[00:15:04] Fliss: And having something that allows people to pay those bills, heat their home, that actually reflects their life and responds to their income frequency and amount, rather than expecting people's lives to change. to fit their bill structure, that is going to be more fitting. And so if you can send somebody a bill that is payable by installments, and so that they can pay 10 a week, say, rather than 40 a month, that is going to be more successfully collected for the utility and easier to manage for the consumer.

[00:15:45] Fliss: And so it's a no brainer to add in kindness and thoughtfulness to your product. And you can do that still in a way where the business doesn't lose out.

[00:15:59] James: In fact we have seen when we've been trialing, the the experience we can get ahead of you. because of the comfort and the trust that you can build with the consumer.

[00:16:13] James: In the sense that, back to that, a big chunk something like 40 percent of our population isn't salaried, in the sense that they, have income, but it doesn't arrive in a convenient paycheck once a month, right? That you can then plan your bills and your expenditure around. So what we're able to do is understand with the technology when that income frequency is.

[00:16:42] James: Understand whether that income is steady. It's a steady state. So if it was a benefit, say, it would arrive on a Tuesday or a Wednesday, and it might arrive once a week, once every two weeks, or once every four weeks, the system understands that, and we go and have a quick look at the AIS when we know there will be funding.

[00:17:03] James: We will know the pattern of expenditure, and we will make a recommendation to say you could afford to pay whatever amount, you can afford, and we suggest that intelligently through the channels that they have signed up to, those that have, you know, regular steady income, but on dates that are not once a month, the benefits of one cohort.

[00:17:29] James: Gig economy and the zero hours contracted people, they get paid generally once a fortnight. And, they will have different size incomes based on where they called into work under the zeros contract, or did they go to work, right? Did they I'm an Uber driver. I choose when I want to drive.

[00:17:52] James: My income is determined by how much I drove in my income period. So what we're doing is we're almost helping them with cash flow and financial planning. And with these ever so slight nudges that we can give with the intelligent recommendation tool, we can get them to build that comfort around money.

[00:18:15] James: Yes, and they can build their trust in open banking because they see a value in the experience that they're getting and it eases their life. And it means we can then start saying, look, we can start building you up, building some credit in your account, take away some of the surprises of cold weather and we'll be part of your journey to make sure you protect the interests of your family.

[00:18:42] Monica: Yeah, and I think if I extrapolate what you both said into a principle, into a design principle, I'm basically paraphrasing, please, that basically it's a, hey, we are designing financial services, such that, we're designing financial services around people's lives and habits, rather than the other way around, getting people to adapt to the world.

[00:19:08] Monica: Way in which we operate traditionally as an industry

[00:19:11] James: and you think about it all disruptive technologies. And this truly is disruptive. We haven't seen, something move like this, perhaps since contactless. And then before that, faster payments, which this has been part of as well.

[00:19:27] James: The obsession around the customer experience. Drives modern thinking, modern design, and every day we obsess about what is the experience for the customer. And the Brucey bonus in that is, that we do that in a way that pays the bills to the utility and breaks down their fundamental challenges.

[00:19:52] James: They've got to have people paying for their products and services, otherwise they can't supply services, right? And that's the elegance in this. It's. It's, it is absolutely great for society but it does the right thing for business as well. Oh, and by the way, it does the right things for us as partners.

[00:20:11] James: It's it, allows us to, to make profits so that we can go on to then develop products again, that do the same thing, which improves the outcome for society, that then drives better value, general value for our customer and allows us to then continue to grow. So it's a really energizing experience.

[00:20:30] Monica: Yeah, I'm glad that you said like partners because I was going to pick on that right now, if I speaking with you at some point, I'm like, it feels like I'm speaking with two founders, e. g. two people from the same company, like the two of you are so aligned, it feels like one team, but what is what we need to specify here?

[00:20:53] Monica: It's it's not one thing. It is one team, but it's two different companies. And it's super cool that it's like, it feels.

[00:21:02] James: Yeah, partners for purpose, right? That's the way to paraphrase it. I can do three, three word ditties as well for us. So maybe I'll invite you back the second time. But yeah partnerships for purpose really is what this is about.

[00:21:17] James: Look, there's a balance of trade between us. We are a big organization, auto and it is a. emerging growing organization as a medium sized business, there are costs both sides. We recognized that there was purpose in what we were doing for the customer, the end customer.

[00:21:41] James: We've got a very clear, digital strategy around how are we going to achieve that. We have a clear understanding about how commercially do we want to do that. And there's an awareness on my side that I could consume all of the resources of auto should I want to, but I know I can't.

[00:22:01] James: There's a mutual respect in the way that we behave together. But ultimately our focus is on powering growth. And one of the things that makes me very proud to work for and then a task group is that we really do nurture, smaller businesses, we believe in circular economy, right?

[00:22:25] James: And bringing emerging technologies front and center into the mainstream because it's good for customers. And together we can succeed. And I

[00:22:35] Fliss: think it's about, we've found that perfect fit on all levels. As James was saying, Atos and Avidin are bigger. Ordo is smaller. So we can reach those different types of potential customers out there in the market.

[00:22:52] Fliss: And we can be more agile and do things quickly and get things approved quickly and change. And Avidin and Atos. Provide that greater reach and talk the same language of going into corporate potential customers and so on. And also our technology fits they pass from one to the other. It's a seamless transition.

[00:23:15] Fliss: We provide, we've got the open banking account information and single payments and variable recurring payments to come. And that fits seamlessly and passes. is on so nicely to then the machine learning and AI and the packaging that Eviden and Atos can bring. So we're all levels, our technology, our people, the size of our company.

[00:23:39] Fliss: They go together. Yeah. I want to

[00:23:42] Monica: expand because if we use you guys as a case study. Many times when fintechs and big players try to partner, not to work as a vendor relationship, but to genuinely partner, there's frustrations because It's two different monsters. One, it's like a big corporate, the other one, it's like a tight resource, but very fast moving machine and the cultures are different.

[00:24:14] Monica: Mindsets are different. So what worked well for which principles will worked well for you to.

[00:24:24] Fliss: I think actually Atos and having this digital team in that they've termed Eviden, that it's actually been more like working with a smaller company. We did, we can't make it all sound rosy and unrealistic, James. There was some. Frustration and delay at getting our partnership announcement out.

[00:24:45] Fliss: For example, I'm not going to pretend that everything's brilliant and rosy. We've got to be real here, but apart from that, the actual working together and the teams we've, we can auto We can do little things around the edges and get on and do our, carry out our contribution to the partnership. And then there's another level, another layer of activities that we can do that we do know has to have more authorization and happen in a bit of a slower time, but that it.

[00:25:17] Fliss: It has more scale and impact for that reason. And we went to the, a utilities conference, didn't we, James probably coming up about this time last year. And it was incredibly successful. It was fantastic. We had people on our stand from. Both companies there, we had triple jewel branded notebooks, which I love and which were a huge hit with everyone.

[00:25:43] Fliss: So there's, I think you can divide activities and impact up into what are the small things we can do around the edges and we can get on with those. And then. Simultaneously, what are the larger, bigger, long term things that we can do that take a bit more time and planning and just make sure you progress those in the background as an overlay?

[00:26:07] James: Yeah. And just to add my, 10 cents into that, I have in my career, I have run alliances, and there is balance of trade and balance frustration. And Fliss, I understand your pain. We have a rigor, and a compliance and a governance model that is is built for a 13 billion euro business, right?

[00:26:38] James: And I, I can't, as much as I would like to ignore that, I I cannot. So those frustrations are in there, but again, the, constant engagement the, close collaboration we brought our engineering teams. Into close proximity and work together. And at that level, with a focused digital purpose, we came together at the beginning of this journey.

[00:27:06] James: We put ourselves in a room and we asked what if questions. And that's how we started. The only thing that holds us back is our ambition. And we put our ambition in the room, and we said, do we think we can prove that this works? And we prove it in six weeks and then we begin to productionize the things that we need to do.

[00:27:30] James: And from the outset, we could see that there was enormous value in creating a partnership that then goes on to do the things that we, what we really want to do, which is affect the outcomes for a customer.

[00:27:42] Monica: Yeah. Why don't you guys expand on the six weeks? And I'm going to say why I've worked in different types of organizations.

[00:27:52] Monica: Some of them, let's say that you guys, it's like, the innovative process is well done. And it's a big, a cultural belief that something can get done in 6 weeks. Yes, and then there's other cultures where we're like. Oh my god, you want me to do all of this in just six weeks? And I'm like, yes, it is possible.

[00:28:13] Monica: But it's, a little bit of a mindset shift and also a process shift.

[00:28:19] James: So

[00:28:20] Monica: how did that work?

[00:28:22] James: First, can I take it first, then maybe jump in after, because I could ask that question in two ways if you don't mind. Firstly in the, situation that I work for this enormous business with Governors of Appliance that we've already spoken about.

[00:28:37] James: So the importance for Six Weeks for me was, I was corporate venturing, right? I was acting like a startup inside my business. And in fact, that was the role I was brought in to do was, to come and break evidence bring the very best of what we do, our remarkable people, the remarkable products and services we bring and look at the market.

[00:29:01] James: So it was important for me to garner the support of the business. And the best way to do that is to. And to have the rigor in that six weeks to pivot or kill. So we chose the thing that was fundamentally hard. in the what if scenario planning that we had been doing. And we looked at the toughest bit, which was, could we classify the AIS in sufficient ability that a machine could make the right decisions?

[00:29:38] James: And we had to prove that. And once we proved that, then the rest is easy, right? So that's what we took as our MP hard problem, if you like. We focused down on that. We brought together our engineering teams with that more style thinking. We will have failed if we do not achieve that. And if we do not achieve that in six weeks, we kill the project.

[00:30:01] James: And that was the rigor that we put in right at the beginning. And I'm glad to say and it's pretty obvious that we did prove that actually you could bring accounting information service with proper classification and do something remarkable with that information, which is then moves the lives of the general population.

[00:30:20] James: So once you've proven that, Then saying to the business, we want to have a solid partnership. We want to see the addressable market in the size that it is, not only in the UK, but across Europe and beyond. Do we have the permission to carry on? And let's not put words in your mouth, but I'm going to do it anyway.

[00:30:41] James: I trust you,

[00:30:42] Fliss: James.

[00:30:42] James: Yeah your board was doing the same thing in terms of I had numerous conversations with, George and others around, Is this the right thing to do for you as order two? So it was really important that we did that. Six weeks and said, this is a concrete idea that is built on rigor, is highly innovative and differentiates us and creates a market that nobody else is in at the moment.

[00:31:13] Fliss: And I think it helps that our technology is so complimentary that we can. One service follows on from the other. And so in working out, can we work together? Is this something we should do? Is this something we should invest in both in terms of hard cash and resources? In working all of that out, it helps that it all slots together so easily.

[00:31:37] Fliss: And it is the right decision because we can provide this bit and Eviden and Atos can provide that bit. And yes, when you put them together, it does create a solution that is far better than just adding the separate bits together. It creates a holistic technology and financially resilient method for people to be able to manage their finances.

[00:32:00] Fliss: And then I also, I think, Putting that in our marketing explanatory how to video with giving examples of some characters really brings that solution to life and demonstrates why we're doing this. Why is it worth putting effort into investigating? Is this partnership worth it? Because we can make that change and have that impact, to the everyday person on the street.

[00:32:28] Monica: I love that. And we'll go into the characters idea where customers very, soon. I just want to step back. If I it was exactly I tried to put myself in the shoes of the customer in this case in the shoes of the listener. All these questions come to me as I'm listening. If I am the audience, and if I'm listening, what you just said, probably I'm like, Oh, this is super cool.

[00:32:51] Monica: And then coming back to James, you talked about we can do this in six weeks. Because we've had specific record and discipline and practices, probably the listener will be asking how what do you mean? Can you expand?

[00:33:10] James: Yeah so while we might appear from the outside, is this as a global SI is a be a master slow moving business.

[00:33:18] James: We have Teams are people that we have specifically built. They, are squads that work together continuously. So they have high velocity. They are littered with mathematicians, data scientists, data engineers who obsess around the outcomes of, good compute and what you can deliver on that.

[00:33:46] James: And I've got no understanding of what they do, and they talk to me, and it's whoa, I just nod politely, and I let them get on but they are really capable of understanding the outcome. We start with outcome, okay, I don't care how we get to the outcome, show me the path of least resistance to that outcome.

[00:34:08] James: And on the way, we stand up and we understand whether we are going a path that isn't going to yield the outcome that we want, and we either pivot that and put the path back towards the outcome again, or we kill that thread of work and say, nice idea, it isn't going to do what we need it to do. And we have the rigor and the bravery to say the five days you've spent trying to solve that problem, in fact, has created more problems than it solves.

[00:34:36] James: So let's do the decent thing and put that to bed. So we have a team of people that are capable, comfortable excited to work that way. You have product owners in, me and in, in Mike and the team over in order that really understand product and product outcome. And then we have that North Star thinking.

[00:35:02] James: And we, every morning, religiously look up at that North Star and say, That's where we've got to get to. If we can't get there, it's not worth doing. And just having the bravery to do that. Sometimes you win on that, and sometimes you lose on that. But if you don't have that and you're losing in that motion and you haven't got that six weeks rigor, you will carry on delivering with a potential project or with an outcome that doesn't satisfy the need.

[00:35:31] James: So it's discipline, it's teaming, it's collaboration. It's wisdom, it's curiosity, it's playfulness, and it's passion, really. That's, yeah, it's passion.

[00:35:47] Monica: It's definitely. Otherwise, we couldn't build what we're building. Last time when I spoke with Fliss, I think the first thing she told me in the podcast, not outside, she was like, Monica, but you realize you are a geek, right?

[00:36:02] Monica: I was like, yes, I am. I think everyone that comes to the podcast is a geek too, because we get so passionate about these things. A normal person that doesn't work in banking doesn't. So passion is important.

[00:36:17] James: Yeah, and the nice thing about it is technology should be a servant to us. And if you can enable technology to do that and do that well, then you've got a great product future.

[00:36:30] James: So too many people lean to what it says on the tin in technology, right? And then they bend the organization, their operations to suit the need of technology. We have a freedom in the way that we build our partnership to expressly say. What is the purpose of technology in, this outcome? And we keep technology where it needs to be, the servant to that outcome.

[00:36:58] Monica: That will go to a

[00:37:00] James: short,

[00:37:01] Monica: keep technology where it needs to be. Yeah. Good. So if technology is a servant, then a customer is the master. Absolutely. Yes. So coming back to the customer please, you said a few minutes ago that When you were building these exactly, you brought customers to the center and you were telling their stories.

[00:37:25] Monica: Can any of you tell us a little bit more about who are these customers and how do you. You brought them into the story.

[00:37:33] Fliss: So building on the research that Aldo did right at our beginning to build our service and, how should we display this? What, should it look like? And then some research that we did, which admittedly now is a bit historic.

[00:37:49] Fliss: It was during lockdown and how do people feel about their finances, but actually, and unfortunately, the economy hasn't. rebounded much since lockdown. So we're still in this cost of living crisis. We've still have high energy prices. Water bills have just gone up. I was just shocked at mine only yesterday.

[00:38:08] Fliss: In fact, I was on the phone to Thames water, but, so things haven't got much better, but the surveys and statistics and the findings we found were In response to people's finances being tighter, people gave themselves, 80 percent of people gave themselves a financial M. O. T. during that time and had a review of their finances, and in looking at their finances, which was their stress reaction to, Oh my goodness, this is Pretty uncomfortable.

[00:38:45] Fliss: 40 percent of those people started canceling their direct debits. And that is a direct result in their, need for control and wanting to do something, wanting to take action, wanting to have a closer handle on their finances. But then if those direct debits. And if they don't put alternative repayment methods in place, then that's going to affect people's credit scores.

[00:39:13] Fliss: And it comes back to having developing technology that suits people today in a far more instant and dynamic society that we live in today, rather than 50, 60 years ago, when direct debit and card on file and card payments were invented 60 years ago. So our financial system and our solutions have been developed to, to reflect and correspond with changing needs of society and during our customer testing.

[00:39:51] Fliss: What we found was an absolute diversity of how people react to finances and how they deal with them. For example, some people would just click through payment screens, not reading anything. That's my type of person, not detailed, just reading. Someone else wanted to read everything on every screen, including the small print.

[00:40:15] Fliss: And so do you put on a screen, for example, we're FCA regulated for half the people. That was a comfort and reassurance for another, for the other half of people. It was no, that's too much detail. And by the way, you start mentioning the financial conduct authority. I'm a bit freaked out now and I don't want to know about it.

[00:40:35] Fliss: How much information do you give, how do you present it is, different for lots of different characters and so you do need to have different options and, screen journeys for different types of behaviour. And then one more example is how people deal with their finances. And that comes to what I was talking about, deep rooted beliefs and how people react.

[00:41:01] Fliss: One person, for example, said, yep, they deal with all their bills as soon as they come in. Otherwise it would play on their mind and they'd worry about it until it was cleared. Someone else, I think this person was a tour guide. He said, nope. I don't pay, I don't pay until I'm getting red final demands landing on my doormat.

[00:41:20] Fliss: If it's a big corporate, then they can wait for my money and they can demand it. If they're a small company, I'll pay it because there was a recognition of people need, some people need cash flow more than others, but I was astounded that. Someone would deliberately just leave their bills until the final demand, and they would be able to sleep at night because I wouldn't personally, but it was just an example of the array of different people and attitudes and ways of managing money and how people feel about money and the need for flexible technology solutions today, matching the technology that we have today, which is instant, low cost, secure payments.

[00:42:05] James: And then there's an interesting angle to, to, to that, when I was conceiving the idea, over a, pint in a pub, how most ideas of mine arrive, I'll be honest, but, the, there's a, there's an emotive thing to this and I had been reading so in the UK, we have a regulator of, energy called Ofgem And every two years they do a consumer study.

[00:42:33] James: And I can't remember the exact amount, but it was high 30 percent. It, they asked consumers, do you trust direct debit? And the answer was resounding no. And the reason for that was in the cost of living crisis, right when that crunch hit, the response of the energy companies that could see the wholesale price, skyrocketing.

[00:42:59] James: In some instances was to treble or quadruple the size of people's director, but unilaterally. I'll be fair to them, they give them 14 days notice. Monday this week, I've paid 200 pounds for my gas, and in three weeks, Monday, I'm going to pay 800 pounds for my gas, and you're going to take that money.

[00:43:20] James: Really isn't letting me know that you're changing my payment in a way that I can trust, right? Baked into all of the, research that has come from Ordo, the industry itself recognizes that consumers are changing and the industry needs to change with them. And if they don't, their debt book increases and that's what's happening.

[00:43:44] Monica: And I think that's key because that's what you guys see it, right? Like consumers are changing and consumers change all the time. Your product allows you, not you, but allows the utility companies to identify if there's a signal that it's telling me, hey, this customer, it's about to change their behavior.

[00:44:05] Monica: Therefore, We need to treat it in a better way such that it's good for the customer.

[00:44:11] James: Yeah, in fact there are triggers that are explicit particularly around direct debit. There are two signals that are sent. If a cancellation is made a signal is sent. It's called ADAC, which we can intercept and use that as a a recovery process, a deflection to go into a quarterly bill, say, and paying on credit card, which is supremely more expensive than taking a direct debit transaction.

[00:44:44] James: So that's good for we can transact lower, lower in many cases than direct debit and significantly lower than than credit card. And then there's an ADAR. which is where, there has been a failure, a return of funds back through the direct debit system, which attracts a cost to the utility and often attracts a cost on the retail bank side of the the consumer.

[00:45:12] James: So they get a double hit they get a seven pound 50 fine because maybe they were one penny short that day that fixed amount needed to go out of their bank account. All very frustrated for the consumer and it can take weeks before the utility recognizes that's happened.

[00:45:33] James: And then you're in that cycle where I've now fallen one or two payments behind, paying my dues and you're creeping into, harder territory to recover. So there are things like that. We can with smart marketing and the use because in essence, the technology is white labeled for all intents and purposes, the consumer is interacting with utility that just happens to provide new and more interesting ways for you to make your payments.

[00:46:06] James: With good marketing you can move good payers. We have elected to trust issues on direct debit, not to do that anymore. You get them paying more regularly. You're helping them particularly because they get then huge lumps and bumps, not in their income, but in their expenditure in summer, they might be only spending 300 pounds a quarter and winter, they might be spending 1500 pounds a quarter and we can help them see that's emerging.

[00:46:36] James: expenditure and start getting to make payments earlier. So yeah, triggering being part of the consumer understanding and the psyche is really important. And we've got tips and tools to do that. And

[00:46:51] Fliss: also for just picking up on one point there that James mentioned, the immediacy of Open banking solutions that are available today.

[00:46:59] Fliss: Card payments take multiple working days to clear and go through. Direct debits take a couple of weeks to set up and then three days to clear. If any of that goes wrong, it also takes multiple working days before the utility will find that out, which isn't good for the utility either. And trying to resolve that as well as all the costs incurred.

[00:47:22] Fliss: Once people are on to open banking solutions, be that for the moment, single open banking payments where a payment can be paid in multiple installments. And then later this year, variable recurring payments, which is like a smart direct debit will be available to utilities. Once. Open banking methods are starting to being used.

[00:47:45] Fliss: If something goes wrong there, or like a customer is, wants to change their payment method or change the amount, the utility also knows that instantly as well, and they can start, they can get on the front foot and start a conversation and a dialogue before things get out of control and it's catching it early means it's easier to resolve.

[00:48:07] James: With a triaged understanding of why the person might be exactly. Pre financial hardship. The other thing that we've found, actually, again, Fliss made an interesting comment around the bill payer dynamic in there when, we talk to those particularly that are on low income or they have this lump and bump in their income, the things they say to us.

[00:48:29] James: About what we do is the transaction is immediate and I know where I am with my money.

[00:48:36] Fliss: Yeah,

[00:48:38] James: And that also is a huge benefit. I pay on credit card. It often doesn't appear on my balance for three days. I don't know where I am with my money. Yeah, so then they start tripping over themselves and then back to that kind of cash flow thing.

[00:48:52] James: We're there to help them with cash management cash flow. What do

[00:48:57] Monica: you think? We are approaching towards the end. Very quickly, what has been the role of AI in all this innovation?

[00:49:06] James: Yeah, we have built, in essence, a machine learning algorithm that takes vast amounts of data and tries to put humanity and understanding into that data.

[00:49:20] James: It, spots patterns in income profile. It understands, the different types of expenditure, statutory things like your bills. disposables even things like lifestyle and gambling can be built in, into the model. And it also understands the purpose of the utility. So we're able to put, by customer, i.

[00:49:44] James: e. the utility, a specific set of rails around what the machine learning does and how it behaves and what it can offer in terms of its recommendations to the customer. But what is worth understanding is the AI is a consent driven experience. The AI is recommending, the AI isn't decisioning. And what it's doing, it's working with the customer to say, based on our understanding, you could afford this amount.

[00:50:19] James: And the customer, particularly with a single payment, can say, actually, you don't know something that you don't know. I can't afford to quite pay that this month or this week. Could I dial that down? And then next week we can go and ask for a bit more and the customer may be more comfortable that week. So it's, intrinsic to what we do.

[00:50:44] James: It is, Democratic in the way that it works. It allows the human to be part of the reasoning and we have a mutable view on the decisions and the model number of that AI that was used. in each recommendation stored away. So we're able to replay, the reasoning that the AI did, the recommendations it gave, and the interactions therefore and after, all the way through to payment or decline in a payment, whatever the customer does.

[00:51:20] James: And doing that allows us then to have a ethical view of what the AI is doing. We're able then to make sure bias isn't creeping into it, and we're able to, be an advocate for the consumer, what any point can say, I'm not sure that did the right thing, and we're able to replay this, the session that they went through and we are then able to make adjustments.

[00:51:45] James: Based on that kind of feedback and commentary from real people.

[00:51:50] Monica: Anything else from your side to add as we close?

[00:51:54] Fliss: It's like having, as James described it, it's like having a critical friend for your bill payments. I think some people there's, great uses of AI out there and I'm sure lots of people use it, but it also can have a Scary dimension to it.

[00:52:10] Fliss: This robot taking money out of your account. That's not what automatically that's not what's happening at all. It's actually a critical friend. They're built in to looking at your finances and helping with, you got paid more tips this week. How about you pay off more of that bill to get ahead or catch up on a previous week?

[00:52:31] Fliss: And I think describing the AI is that critical friend that gives you nudges, dials down. If, some people could find that scary and especially utilities thinking we're going to put our consumers, our customers through this web of automatic whipping out money here and there, it does it intelligently and compassionately.

[00:52:53] Fliss: And it's allowing the consumer to retain control and empowering them to have a better view of their finance. It's not replacing them. I

[00:53:05] James: mean, what is interesting in terms of, this is used the words variable, recurring payment VRP. There is a component for us to be more automatic and automated with the AI.

[00:53:19] James: As the customer can sense and learns and trusts, they may feel actually, you're doing a great job, do it for me. But even then, and this is where our partnership takes strength from the auto capability, the VRP allows you to put guardrails around the customer. What can be automatically taken a max low and a max high and a max total in any given period so a customer can have total confidence that thing is not a unilateral experience to them, and that's what's fundamentally important here.

[00:53:52] Fliss: Yeah, and it's, it can be integrated in, therefore, in that stepped approach. So it's not a shock or this big, bang change for the utility or the customer. For at the moment, this can be done via single payments and then single payments by and enabling installments into that single payment. And installments could be by one customer.

[00:54:18] Fliss: Chipping away at that bill, or it could be a bill that is contributed to by many occupants in a household, a bunch of flatmates, for example. And then the next step in evolution on that, which is just a step rather than a big leap, is then a smart direct debit variable recurring payments where money is more automatic on a weekly or monthly or fortnightly basis.

[00:54:44] Fliss: Within those parameters that have been pre agreed by the consumer and the utility, as James was saying, it's a stepped approach that helps both utility and customer get used to this new, instant, low cost, secure technology moving on from direct debits. Yes,

[00:55:03] Monica: and it is not just a product and it's not just an innovation, but it's a solution to 2.

[00:55:10] Monica: 5, now 4 billion pound debt problem. Yeah.

[00:55:17] James: And that's just in utilities, right? There's a debt book in water companies. There's a debt book in local councils and local government. There's a debt book in the tax office. So this we've started where there is a enormous societal need. because of the fundamental need for people to be healthy, keep their homes and survive.

[00:55:40] James: And we are now looking at the broadening of the sector and in fact, taking this across Europe.

[00:55:46] Monica: Amazing. It's been absolutely amazing having you in the show. And I'm like, and thank you for building such a great product. It's good. But it's nice when you're like, yes, that is a good product because of like everything that we've been talking about.

[00:56:08] Monica: So yeah, it's been great coming here.

[00:56:11] James: It's been

[00:56:12] Monica: fantastic.

[00:56:12] James: Thanks for the invite.

[00:56:14] Monica: Thank you everyone. See you next week.