Small and medium-sized enterprises face a major problem: access to capital. And this big problem is an equally big opportunity for lenders who can get it right.
But for decades, banks and credit unions have often been trapped in legacy systems and struggled to deliver the seamless, efficient experience that business owners expect.
“80% of small business owners say having world-class digital capabilities is extremely important and frankly expected of them by their bank,” said Adam Hughes, CEO of Amount. As small businesses start asking for something, digital is “the bet right now” when it comes to getting the lending experience right, told Karen Webster of PYMNTS.
This expectation among business owners is driven not only by convenience and quick access to credit, but also by the need for other financial tools, including deposits.
However, the current small business banking landscape remains fragmented and many financial institutions struggle to meet these expectations.
“Some of the nation's largest banks are taking weeks to provide funding to small business customers,” Hughes said, citing challenges with the manual and paper-intensive process.
reason? Businesses may want quick solutions, but traditional banks tend to move slowly. But as competitive pressure from fast-moving fintech companies increases, slowness may no longer be an option.
“Banks need great digital experiences and efficient workflows to ensure their small and medium-sized business customers get the experience they want and to enable banks to deliver their products profitably. We need to provide that,” Hughes said.
Read more: Amount introduces small business lending suite
Solving the small business banking gap
The ability to provide an integrated, frictionless credit and deposit experience has never been more important for banks and credit unions, especially those looking to retain and grow their small business customer base.
However, the small business banking industry is not only fragmented but also highly competitive. FinTech companies have entered the race, offering digital solutions that rival traditional banks. Financial institutions need both a great digital experience and efficient workflows to compete in this environment.
Hughes said Amount's Small Business Suite can play a role by providing a solution that allows banks to deliver fast, reliable and profitable services.
He added that at the heart of the Small Business Suite, it offers an integrated platform that combines lending and deposit functionality. “The most effective way is to quickly understand the creditworthiness of small business owners and provide them with the right financial products at the right time.”
Historically, credit and deposit origination have been treated as separate processes with different systems, requirements, and workflows. This often results in inconsistent customer experiences, inefficiencies, and time-consuming steps. But advances in digital technology, from artificial intelligence (AI) and automation to open banking APIs and cloud-based platforms, are changing that.
“This is very different from what banks currently offer, which is very manual,” Hughes said, adding that by offering both lending and deposit functionality on a single integrated platform, “banks can You can streamline your internal operations, delight your customers, and actually unlock that cross-lock.” – Demonstrate sales ability among both SMBs (Small and Medium Businesses) and consumers. ”
Data and automation best practices
For banks and credit unions, the ability to attract deposits is just as important as extending credit. Digital platforms provide a complete view of the financial needs of small business customers, allowing banks to not only extend credit, but also attract deposits and build long-term relationships.
And at the heart of these relationships is data as much as products.
“We have over 50 different integrations with different vendors and are constantly testing and tweaking,” Hughes said. These data sources help banks more accurately assess the creditworthiness of small businesses, automate processes, and reduce the time it takes to approve and fund small business loans to a wider range of applicants. facilitate financing.
With AI-powered fraud on the rise, data-driven solutions are essential. Amount's Small Business Suite leverages machine learning and predictive analytics to streamline lending and predict the financial needs of small business customers. “We're just scratching the surface of what we can offer,” Hughes said, highlighting the platform's potential to offer more customized products and services based on data analysis.
As small and medium-sized businesses seek digital-first solutions, providing enterprise-grade tools is essential for financial institutions. Despite their size, small businesses need sophisticated tools to manage cash flow, make working capital decisions, and access credit. Hughes believes technology is a big enabler in this space, helping to level the playing field between large and small organizations.
“We are talking about redefining the relationship between lenders and small businesses and fostering the growth of long-term partnerships,” Hughes said. “How do we do that? We can do that through a more personalized lending experience.”
More information: Adam Hughes, Amount, Amount Small Business Suite, Banking, Banking, Credit, Digital Transformation, Featured News, FinTech, Lending, Loans, News, PYMNTS News, pymnts tv, Small Business Banking, Small Business, Small Business ,video
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