It's all hands on deck as companies across industries take measures to aid the national and global response to the coronavirus pandemic.
While some firms are adjusting the assembly lines of their manufacturing warehouses to produce much needed personal protective equipment, FinTechs have found themselves in a different position to provide valuable assistance.
Designed to provide capital to the many small- to medium-sized businesses (SMBs) and employees that have been left in dire straits, the initiative was off to a rocky start at its launch last Friday, with only two major financial institutions (FIs) able to accept applications, and the banking community at-large struggling to cope with a lack of logistical clarity and an anticipated surge in demand that threatens to overwhelm systems.
In a conversation with Karen Webster, Bottomline CEO Rob Eberle discussed how the company came to launch a solution designed to ease the loan application burden on both banks and borrowers and described the role of B2B FinTechs elsewhere as market disruption forces finance teams to prioritize their digitization efforts.
Easing The PPP Loan Burden
The company does not traditionally offer loan origination software for banks, but with its digital account opening capabilities already in place, the FinTech was able to wield its technology to facilitate the PPP lending process for FIs.
Bottomline Technologies announced last week that it has tailored its account opening solution into a platform through which lenders can — free of cost — digitally collect all of the information on an SMB required to process a PPP loan application.
For banks and SMBs that may have traditionally relied on physical branches to process these applications, a secure online platform can be instrumental. This is particularly true when it comes to onboarding a new customer and managing the required know your customer (KYC) validation processes, a hurdle that has reportedly led at least one FI to prioritize existing SMB clients over unfamiliar ones when processing PPP loan applications.
“You’ve got a situation where access to the branches is limited,” said Eberle. “How are they going to receive loan documentation? By fax or paper? We're helping to facilitate that origination and all of the documentation that’s required in this process because you could have a situation where a small business doesn’t have a banking relationship with somebody who’s providing these loans.”
Prioritizing B2B Payments Digitization
While Bottomline found a way to develop a new solution to help SMBs and banks during this time, the FinTech has also found itself in a position to aid companies with the technology it already has. As remote teams settle into the new normal of remote work, finance teams may begin to take this moment as an opportunity to prioritize their modernization efforts.
"No doubt, this will accelerate the digital transformation of business payments," said Eberle.
For decades, accounts payable (AP) departments have stuck with paper checks and manual data entry, and while their organizations may have been interested in AP automation, the time was never right to make the switch.
Yet as more finance teams find themselves struggling to optimize workflows from their remote workspaces, unable to cut and send out checks and challenged to maintain data flows with suppliers, Eberle said the longstanding inertia of the status quo that prevented AP automation efforts has lifted, giving way to digital transformations driven by the need to automate and embrace the cloud.
This shift is being fueled from both ends of the B2B transaction, noted Eberle.
"The other piece that's coming out of this is the importance on the vendor side of the visibility into receiving payment," he said. "If it's not already, this will be a liquidity crisis for many firms. They're asking, 'When am I getting paid? Do I have visibility into that?'"
Unprecedented Circumstances, Unprecedented Action
That cash flow visibility remains critical to companies of all sizes and industries, although Eberle noted that the pain is felt more acutely among some firms than others. As businesses establish new operational routines, there is an opportunity for firms to take an introspective moment and consider whether they may be in a position to help in some way, too.
In today's environment, Eberle noted three categories of businesses.
The first are companies that are "on fire for survival," the hotels and restaurants hit hard by the coronavirus crisis that must remain focused on cutting expenses, strengthening liquidity, and making it through another day. The second are firms that are attempting to operate as normal to hit their earnings and expansion goals. Both categories stand to gain from automated financial technologies.
In the third category are the companies in a position to help others, whether through reconfiguring their business models or launching new products to assist in various ways. Bottomline is in this category, said Eberle, adding that he hopes more firms will find themselves in a similar position. But for businesses to make the most of their contributions, they must innovate and think outside the box of their traditional operations and offerings.
"We did something a little different, something we've never done before," said Eberle. "But, then, none of us has been through a circumstance like this in our lifetimes."