Amount: Digital Innovations Provide Right Small Business Products at Right Time | PYMNTS.com

Small businesses have a big problem: access to capital. And this big problem is an equally big opportunity for the lenders that can get it right.

But for decades, banks and credit unions, often entrenched in legacy systems, have struggled to provide the seamless, efficient experience that these business owners expect.

“Eighty percent of small business owners say that having world-class, digital capabilities is extremely important and, frankly, expected from their bank,” Adam Hughes, CEO of Amount, told PYMNTS’ Karen Webster, noting that when small businesses start looking for the right lending experience, digital is “table stakes at this point.”

This expectation that business owners hold is driven not only by convenience and quick access to credit, but also by the need for other financial tools — including deposits.

Yet, the current small business banking landscape remains fragmented, with many financial institutions struggling to meet these expectations.

“Some of the biggest banks in the country are taking weeks to fund a small business client,” Hughes said, citing the challenges of manual, paper-intensive processes.

The reason? While businesses may want solutions fast, legacy banks tend to move slowly. But as competitive pressures from faster-moving FinTechs intensify, slow may no longer cut it.

“Banks need to deliver that superior digital experience and those efficient workflows to make sure that their small business clients are getting the experience they want, as well as to ensure the banks are delivering that product in a highly profitable fashion,” Hughes said.

Read more: Amount Introduces Small Business Lending Suite

Solving for the Small Business Banking Gap

For banks and credit unions, especially those aiming to retain and grow their small business customer base, the ability to deliver an integrated and frictionless credit and deposit experience has never been more critical.

But the small business banking space is not only fragmented but also highly competitive. FinTech companies have entered the fray, offering digital solutions that rival traditional banks. For financial institutions, competing in this environment requires both a superior digital experience and efficient workflows.

Hughes said Amount’s Small Business Suite can play a role by providing a solution that allows banks to deliver a fast, reliable and profitable service.

He added that, at its core, the Small Business Suite offers a unified platform combining lending and deposit capabilities. “You are best understanding the credit worthiness of a small business owner quickly, and you are providing that small business owner with the right financial products at the right time.”

Historically, credit and deposit origination have been treated as separate processes, each involving different systems, requirements and workflows. This often results in disjointed customer experiences, inefficiencies and time-consuming procedures. But advances in digital technologies — ranging from artificial intelligence (AI) and automation to open banking APIs and cloud-based platforms — are changing the game.

“It’s a stark difference from what banks are delivering today, which is very manual,” Hughes said, adding that offering both lending and deposit capabilities on one unified platform “allows banks to streamline their internal operations, delight customers, and really unlock that cross-sell capability between both SMB [small to medium-sized business] and consumer.”

Best Practices in Data and Automation

For banks and credit unions, the ability to gather deposits is just as important as extending credit. By offering a complete view of small business clients’ financial needs, digital platforms enable banks to not only extend credit but also gather deposits and build long-term relationships.

And at the center of these relationships — as well as the products — is data.

“We have 50-plus different integrations with various vendors that we’re constantly testing and tweaking,” Hughes said. These data sources help banks assess the creditworthiness of small businesses more accurately, making it easier to lend to a broader pool of applicants by automating processes and reducing the time it takes to approve and fund small business loans.

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 anticipate the financial needs of small business clients. “We’re really scratching the surface of what we could be providing,” Hughes said, highlighting the platform’s potential to offer more tailored products and services based on data analytics.

As small businesses demand digital-first solutions, providing enterprise-grade tools is essential for financial institutions. Small businesses, despite their size, need sophisticated tools to manage cash flow, make decisions about working capital and access credit. Hughes sees technology as the great enabler in this space, helping level the playing field between large and small institutions.

 “We’re talking about redefining the relationship between lenders and SMBs, fostering that long-term partnership growth,” Hughes said. “How do you do that? You do that through a much more personalized lending experience.”