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How can Housing Associations create and increase their social value during economic uncertainty? Payment providers could gauge affordability and prioritise debt avoidance

Despite showing a small improvement since the beginning of 2023, inflation in the UK has remained at a nearly 40-year high. With amenities like food and electricity bringing the average household bill to a whopping £811 a year, it’s no wonder that 16% of the general population say they are now in ‘financial distress’. For public sector organisations, like Housing Associations, where the focus is largely targeted at supporting vulnerable local communities via affordable housing, additional support must be provided.

There are several ways in which Housing Associations can create and increase their social value, especially during times of economic uncertainty. Working closely with payment providers and, in turn, choosing the right payment provider can be critical in ensuring adequate support is provided to the community they serve.

Getting to grips with data to drive value

Payment providers and housing organisations can work collaboratively to offer a wider range of payment technologies, like Open Banking, to gauge affordability and prioritise debt avoidance rather than debt management. As well as protecting tenants financially, the addition of payment technology into the housing ecosystem will ultimately build trust between provider and tenant by reassuring customers that measures are in place to provide a seamless and accessible service.

Data plays a significant role in enabling this. Housing Associations can leverage insightful data via Open Banking capabilities to protect tenants and optimise customer experiences. By enabling banks and authorised third-party service providers to securely access users’ financial data, Housing Associations can gain visibility of data in real-time. This, in turn, means they can make formal decisions such as determining whether tenants can pay rent and associated bills, gain a more detailed picture of a tenant’s creditworthiness, and make decisions as to whether a tenant is eligible for financial support, such as housing benefits or welfare assistance.

Allowing providers to securely access users’ financial data can help Housing Associations gain visibility of data in real-time

Furthermore, Housing Associations, as social businesses, have different requirements than the private sector. Whereas in the private sector, customers can shop around and choose the providers that suit their preferences and needs, public sector users operate in a smaller environment. On top of this, tenants may be impacted by the digital divide or may find it difficult to understand and discuss their finances. This is where Housing Associations can play a pivotal role – leveraging Open Banking capabilities to provide tailored financial advice to tenants. For example, by analysing their banking data, they can offer advice on managing their finances more effectively and suggestions on ways to save money.

Understanding your customers and social demographics

Fundamentally, it is imperative that housing organisations – as well as the public sector more widely – remember that, in some cases, they are serving a vulnerable demographic. This means that building relationships based on trust, in which tenants feel supported, empowered, and informed, is more important than ever.

As well as data being a key piece of the puzzle to building trust, knowing exactly what payment technologies are preferable to which groups of people will also be crucial in ensuring trust is built between Housing Associations and tenants. When dealing with different demographics, it’s imperative to recognise that a ‘one size fits all’ approach simply will not work. That is why payment providers and Housing Associations must collaborate to ensure a full spectrum of payment options is available.

Some tenants who, for example, do not have a bank account may prefer to use alternative payment methods such as prepaid cards or cash payments. In these instances, Housing Associations can further demonstrate social value by offering customers a full spectrum of payment options. Not only will this support tenants financially by reducing the risk of missed or late payments due to payment incompatibility, but it also means that the organisations can better serve the wide-ranging demographic in which their services reach – an entirely different market to a lot of private sector organisations, where target markets are often limited to a smaller demographic pool.

How can housing associations maximise their value?

There is a multitude of ways in which Housing Associations can build trust and maximise their value within the communities they serve. A key, but often unnoticed, part of this is around the payment choices they offer. With the right payment provider and solutions, housing organisations can improve their ability to protect tenants and optimise the customer experience.

This piece was written and provided by Stephen Ferry at Pay360.


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