In an Expert Focus article for WaterBriefing, Jamie Gibson, Managing Director at DCBL discusses why the water sector must take a technology-driven approach to debt resolution in order to reduce enforcement levels.

Jamie Gibson, Managing Director at DCBL: As water companies face heightened scrutiny from Parliament over how they pursue debt from vulnerable households, now is the time to reflect on why the industry must reset its approach to debt resolution and enforcement, and how responsible partnerships with debt resolution sector leaders can help.

The Environment, Food and Rural Affairs Committee’s (EFRA) recent call for detailed disclosure of enforcement activity, from the use of bailiffs on sub-£1,000 debts to applications for Suspended Committal Orders, has brought the sector’s practices into focus. With concerns growing over water poverty, rising bills and low awareness of available support, the industry is under pressure to demonstrate that every action taken against a customer is fair, proportionate and aligned with Ofwat’s Paying Fair guidelines.

Poorer personal financial outlook for many

Coupled with research by The Water Services Regulation Authority showing that almost 3 in 10 (29%) bill payers think their financial situation is worse than a year ago, it is time for the sector to get savvier about how it handles debt resolution.

The pool of people considered vulnerable is growing, and handling them with the necessary care and attention, without increasing operational pressures on debt collection teams, is essential. Ofwat’s Cost of living: wave eight shows almost 1 in 5 (18%) bill payers reported struggling to pay household bills ‘most of the time’ or ‘all of the time’.

Customers experiencing financial difficulty or falling into the debt cycle for the first time often find it difficult to talk about their situation. Providing tailored communications channels, such as digital forms for Income & Expenditure (I&E) statements, allows customers to share information safely when they may not feel comfortable speaking directly to an agent.

The use of technology ensures that this I&E data is securely stored and shared with water companies and their partners, enabling support to be identified and offered on a case-by-case basis.

Technology is the key to earlier engagement

At a time when MPs are asking difficult questions about how often enforcement agents are deployed, how many low-income households are affected, and whether guidelines are being followed, the use of technology and automation presents an effective solution to reducing the need for escalation through early engagement.

Enforcement should only be considered once every other route has been fully explored, ensuring customers have had every opportunity to engage, seek support and agree on a manageable way forward.

Practical steps for strengthening debt collection

Water companies and their collections partners can take clear, tangible steps to make their debt recovery processes more effective. Embedding technology into everyday operations is a starting point. Digital platforms streamline case management, reduce manual errors, and provide a single view of each customer’s journey.

AI-powered tools can further enhance this by identifying vulnerability indicators early, allowing teams to prioritise support for those most at risk. By combining human expertise with intelligent systems, utilities providers can make decisions that are faster, fairer, and more transparent.

DCBL, for example, has implemented conversational AI, which has been purpose-built for regulated, debt-related conversations. The technology combines automation, compliance controls, and a collections-focused language model capable of understanding intent, vulnerability cues, and affordability discussions. By integrating AI into multi-channel engagement, we have created a solution that layers in digital channels such as WhatsApp, SMS, and click-to-pay options on top of our market-leading letter-driven approach.

Bridging the gap between traditional and digital communication is essential in modern debt resolution. Our own research shows that two-thirds (67%) of those in the lowest income bracket say the ability to message a support team about financial matters is either ‘very’ or ‘somewhat’ beneficial. This highlights the importance of accessible digital communication channels for those managing tight budgets.

Balancing automation with empathy

However, the introduction of technology can’t come at the expense of empathy or the human touch. Straightforward queries and payments can be resolved efficiently by AI, freeing trained agents to focus on complex cases requiring personalised attention.

Customers who have abandoned calls can be proactively sent follow-up SMS invitations to continue conversations digitally, reducing lost contacts and improving the overall customer experience. This approach ensures vulnerable individuals receive timely, respectful support while operational pressures on teams are minimised.

Driving operational efficiency and performance

The integration of conversational AI within a more traditional debt resolution infrastructure enables rapid deployment without disrupting compliance or reporting standards. Operationally, it means that agents can handle more than 15 digital conversations simultaneously, supported by AI-generated summaries, while call abandonment levels decrease significantly.

Delivering measurable financial impact

This type of technological transformation not only enhances customer experience but also significantly boosts collection levels. Targeted AI-led campaigns can deliver a considerable uplift in payments, resolving high volumes of arrears without live agent involvement. They also reduce inbound calls relating to failed payments. Outbound SMS follow-ups also contribute to collections, while dormant accounts can also be reactivated to generate additional revenue, which may have previously been written off.

This demonstrates that technology-led collections, when combined with ethical practices and vulnerability-focused engagement, can deliver sustainable, scalable results that avoid further escalation.

Empowering customers and protecting vulnerable individuals

Perhaps most importantly, the use of this technology has redefined how customers engage with debt recovery departments. By offering accessible, multi-channel options and ensuring that interactions are ethical, supportive, and tailored to individual circumstances. Vulnerable customers are identified and supported proactively, and every step of the collection process aligns with regulatory guidance and best-practice standards.

Most water companies now offer social tariff schemes, meaning debt resolution is not simply about collecting outstanding balances but ensuring customers are aware of the support available and signposted appropriately. Partnering with debt charities, such as StepChange, allows vulnerable customers to access structured assistance like Debt Management Plans (DMPs) or Debt Relief Orders (DROs). Through API integrations with these charities, once a customer engages, water companies can ensure they do not remain trapped in the debt recovery cycle while receiving support suited to their situation. The earlier a person engages with their water company or debt collection partner, the sooner steps can be taken to resolve matters or receive support.

A blueprint for the sector

DCBL’s experience illustrates how high-volume, letter-driven collections can evolve into a digitally minded, customer-centric operation without compromising compliance or performance. By embedding AI, automation, and multi-channel engagement into processes, organisations in the utilities and wider regulated sectors can protect vulnerable customers, increase resolution, and reduce operational strain, setting a new benchmark for ethical, technology-led debt management.

Ultimately, the water sector now has a clear opportunity to rethink how debt resolution is handled in a way that better reflects the pressures many households are under, as well as the expectations placed on utilities by regulators and Parliament. By prioritising early engagement, using technology intelligently and ensuring enforcement is always proportionate and carefully considered, organisations can move away from reactive escalation towards a more supportive and preventative approach.

Those that get this balance right will not only strengthen recovery performance and ease pressure on collections teams, but also play an important role in rebuilding trust in water companies by showing that fairness, transparency and customer care sit firmly at the heart of their approach to debt management.