One of the most effective ways that technology has revolutionized our economy is by boosting the growth of small businesses. With the internet and other digital tools, more than 30 million small businesses across the US can get their message out to prospective customers, manage finances, and also day-to-day operations, which is beyond selling products and services to the local communities.
The investments, loans, and innovation programs serving America’s Small Businesses have been overlooked. They are trying to pull up their 30 million small businesses. The nation is giving employment to more than half of its population, 80% of which receives cash in hand. With the arrival of the COVID-19 pandemic, it has been looking like the highest dislocation of labor and business activity at a wide scale and speed. However, America gave us a reason to applaud Congress and White House for providing a USD 2 trillion relief package, of which USD 350 billion is given for upliftment of America’s small businesses.
The country has been talking regularly about the financial sector and how relief can be provided across small businesses wherein community banks and financial companies are to be involved. So, it was needed that there should be an urgent deployment of funds, and technology will be critical to that.
“COVID-19 is taking a huge toll on every sector of the economy as more than 17 million people have filed for jobless claims.”
To the effect that has brought on our economy, the solutions should be filled with fresh thinking and approach. And, the large part of our economy—the small businesses—are expected to come up with forward-thinking solutions. Government agencies are not sufficient and robust to deal with anything of this magnitude and urgency. It is the inherent scalability, penetration, infrastructure, and plumbing of financial technology that needs to be implemented during this crisis.
During these tough times, there are a few things that would smooth the glide path for the small businesses from the CARES Act (government’s financial help initiative):
1. Enhancing market liquidity
2. Developing a 21stcentury digital interface for streamlined touchpoints
3. Inviting new players including fintech companies as service providers and lenders themselves
Rising need for digital constructs and tech
The world sees a rising need for digital constructs and technology as we only have a short window or tech-related strength to deploy the number of dollars and loans. It is the financial technology that can give a push to the operations kept on halt.
The financial technology can not only streamline the applications but also help in understanding the likes and dislikes of customers and anti-money laundering rules and applications through automation. Technology also plays a vital role in improving origination, underwriting, loan disbursement, and servicing. Many small businesses that don’t use credit for accepting the payments are making use of Square. In reference to this example, it is advised to the regulators that they should leverage all the possible capabilities of technology.
Leverage tech in financial firms
With the deployment of USD 200 billion in financial technology, the firms should invest in better capabilities.
1. Some small business owners only have mobile phones to do their operations instead of printers and high-tech gadgets. They should make use of this time to leverage those capabilities, which can either enhance the working of existing things or replace them with better functionalities.
2. COVID-19 puts a spotlight on enhancing the financial system that should work for all collectively. So, it is the right time to make use of technology and try new constructs for optimized working tomorrow.
Conclusively, it is the time to throw some light and uplift the small businesses, which are no less than the beating heart of our economy. Along with the government, everyone, including the small business owners, should focus on working toward technology development and make sure that the energy is well spent.
The celebration dates of Small Business Week 2020 have been postponed due to the coronavirus pandemic, and the new date is yet to arrive. However, let’s recall the significance of small businesses at this time and focus on preserving the reducing economy and jobs. To know more about Financial technology, you can download our latest whitepapers on Fintech.