Turning on the tap of innovation in UK Water

Turning on the tap and having water flow is pretty much a given to most people in the developed world. For something so important, little thought goes in to how the water arrived at the outlet, even though our future depends on it. However, the challenges to deliver this future are mounting.

Small streams make big rivers

Facing challenges such as population growth and climate change, issues of leaks from ageing systems and affordability, companies in the water sector are under increasing pressure to find new ways to deliver their services. Innovation has been highlighted as the critical connection and foundation for development of each of the 4 key expectations in Ofwat’s PR19 report: great customer service, resilience, affordability and innovation.

Similar to the retail banking sector in 2016, the water industry has awoken to the importance of the customer and understanding how their engagement is essential over the long-term. While customers may have accepted the status quo until now, as other industries develop their services, customer expectations about water are on the rise. To meet the demands of PR19, water companies need customers to play a more active role in water management and to be more aware of how their behaviour affects the world around them.

Opening the floodgates to customer engagement

I wrote about customer apathy in retail banking in 2015, where I recognised customers felt powerless in the system. PSD2, MiData and Open banking each helped to make the industry more transparent and thus enabled customers to play a more active role and understand their options. Whilst it was deemed an apocalypse by some at the start, as the dust settles it is increasingly clear that benefits exist for both customers and banks. Water companies are facing a similar dilemma and can take some key learnings from the bankers.

  • Being transparent is rewarding – when customers have all the information, they need they feel more in control to make better decisions. In banking it was helping customers to manage their money better, in water it is educating customers about their own usage patterns in order to help them develop better behaviours. In turn this will surely help companies meet their PR19 expectations.

  • Sharing helps you grow faster – collaborative working isn’t about losing control, it is about sharing information openly so that the best brains can work on building a better outcome which benefits all in the end. In an industry where risk avoidance is the norm, working with new suppliers can help to foster the agility needed to innovate quickly. Traditional bankers did it when they teamed up with challengers, TfL do it by sharing their traffic data with anyone that wants it.

  • Customers will value you and share their data, but they need to trust you -by building a relationship with mutual benefit, customers will learn to trust you. Using customer data to create better experiences for customers will more likely engage households and consumers in to the process as well as the outcomes.

  • Be in their world – bankers found they cannot rely on one avenue to communicate with their customers. High street branches are important, but so too is online, telephone, apps and social. Each must, within reason, offer the access to information the customer demands. Similarity water companies need to be in the right space at the right time to help customers make the decisions they need to make. Be that information about their own usage on annual bills, disruption warnings on social media, wasteful behaviours in the press or any other information a customer may need- whether they know it or not.

Retail Banking Innovation and The Art of The Future

Here at DWC we have scaled up significantly over the past months to a 15 person strong team and consequently this has drawn the majority of my time and energy away from writing new content. This guest article, written by James Taylor of the Fintech Network, caught my eye though and together we agreed to share it through DWC. I think James raises pertinent questions - and from a well informed perspective - on retail banking innovation. 

I hope you enjoy James' writing as much as I have.



We exist to facilitate and advocate the adoption of innovative and disruptive financial technologies. We do this by uniting the most influential figures in the industry to challenge the status quo and improve traditional banking systems. This happens through our industry leading conferences and original content.

As retail banks continue to jostle for position in the digital transformation race, I’ve found myself considering what innovation within banking really means and who is going to get it right.  My remit at FinTech Network requires me to speak daily to individuals who are responsible for innovation, design and digital transformation in both incumbent and challenger banks alike - and the one thing that strikes me is the variety of responses I get to the question “why and how are you innovating.” 

Some innovate to reduce cost.  Some innovate to create new products.  Some innovate to push the organisation to become more customer focused.  Some innovate purely as a marketing exercise.  There is innovation in response to regulatory change and innovation in response to the latest must have technology.  Some banks are innovating through acquisitions, JV's, partnerships and accelerators.  Some are changing their business model and culture.   

All are trying to ride the digital wave with a specific outcome in mind for their business and their customers.  But they can't all be right, can they?   

Only a few I've spoken to seem to spend their time thinking about the future and what we, the consumer, are likely to be demanding from our banks in say 5 or 10 years’ time. Based on our future experiences from every facet of our digital life how are expectations and behaviours likely to change. 

For instance, how is the way I book a holiday going to influence the way I bank?  How is the technology I carry with me going to change the way I pay for things?  Which technologies that have had marginal adoption today going to become an overwhelming feature of my life in the future?  What unknown unknowns are going to emerge that none of us could predict?    

The process of making these predictions has been referred to as the “art of the future” and the reason it’s so critical to innovation functions within banks is without considering what customer behaviours are going to be in the future, how can you innovate now to create a business and a set of products that meet those future needs?  How are you going to create meaningful customer insight and design customer focused products if you can’t confidently predict how your customers are likely to behave?  

How are you going to ensure that the sweat and tears given in the name of innovation now don’t turn out to be wasted when the technology you pinned your hopes on has been leap-frogged (chip and pin anyone?) and is now obsolete.  Or that customers are behaving in a completely unforeseen way that makes your particular proposition irrelevant?  (Pokemon Go??)  Or that you realise you don’t have the back end systems and processes in place to support the scramble towards a new model of banking?  (PSD2 and the CMA on open banking??)  The risk of neglecting future customer behaviours is pretty significant then.  

It sounds like a luxurious use of time when there is data to be analysed, a customer journey to be mapped, a new proposition to test and a partnership with a tech partner to be negotiated - but all these other tasks could be meaningless if we don’t have our best guess in place on what the future is going to look like.

The art of the future should be the very first step in any innovation process.  What do you know about your customer’s behaviours now and what can you confidently predict about them in the future?  What are the trends, technologies, emotions and desires that shape future behaviour going to look like in 5 years time?  How do you begin to apply this thinking to the range of demographics you serve to ensure you don’t leave anyone behind?  Most importantly how are you going to build in flexibility so that you can adapt as real world information starts to inform your prediction.   

Once you have a picture of the way your future customer is likely to behave you can begin the process of aligning this with your vision, your products and your culture to deliver the experience you promise your customers.  Then the challenge of gaining stakeholder buy-in begins!!  Good luck with that.  

Fortunately I don't actually have to do this.  (Please take note of the number of question marks used in this article.  I have questions, not answers!) But if I did, this is what I'd be betting on:

  • We’ll bank exclusively through a piece of wearable tech, something like Google Glass, which in turn utilises the augmented reality principles of Pokémon Go to create a fully interactive but personalised environment that is both local and connected.  Everything we see, we will see through our banking platform and we'll be able to interact with it.  No need then for mobile or internet banking solutions.  
  • This “view” of reality will be overlaid with data.  All the data that we generate in our digital life will be amalgamated in one place to inform all our banking decisions.  Think about looking at a digital menu above the check out in your favourite lunch time haunt and making your decision based on what you've eaten previously, how far you walked that day, what your friends eat and anything else you'd like to see.  Your order will be made from your banking view straight to the vendor.     
  • Through this “view” we’ll also have the option to access a sector agnostic retail platform.  Something that combines the best bits of Amazon, John Lewis and MoneySuperMarket.com.  A banking platform that allows us to access the best deals based on our data, location, habits, likely future behaviours and gives us reviews and advice with an excellent customer experience.  Like those trainers that guy in the gym is wearing?  Your banking platform will know where you can get them for the best price, your size and the insert you need for that dodgy leg.  All delivered in time for your next session!  
  • Something like Siri with advanced AI machine learning and natural language recognition provides a fully interactive, dedicated personal assistant to remove any friction from our banking experience.  It knows who are friends and family are, our financial situation and our likely spending patterns.  We just need to tell it what we want to do and it will speak directly to the seller through open banking principles, simultaneously offering us advice.  That monthly, budget crippling impulse buy will be a thing of the past!    
  • We'll be protected by advanced biometrics for security and authentication so all of this will be secure and just for us.

What's your prediction?