The Paycheck Protection Program (PPP) was passed to help save jobs and keep workers on the payroll. However, a brand-new loan product brought on by a government stimulus was almost impossible for financial institutions to truly prepare for, as there was limited ability to predict how the government would choose to roll out such funds. Having helped rapidly launch several PPP digital loan applications, there are a few things I have observed that financial institutions should consider for the second round of funding and beyond.
Think like a startup
These are not normal times, which means that financial institutions cannot rely on their normal processes to get things done. One organization scaled their team from 40 to 400 in a day, put an online application together with validation and security parameters, and started letting individuals apply for loans, rolling out updates and improvements every 6 hours. This nimble, consumer-first approach, combined with their existing cloud infrastructure, enabled them to respond quickly and compassionately to worried business owners.
Prioritize speed in technology
During this crisis, the institutions I’ve known to be most successful are the ones who already have invested in leadership, vision, and systems that support customer-centric digital strategies. Now more than ever, financial institutions need flexible, future-proof technology to get their customers or members the help they need – fast. Organizations need to evaluate whether their software will enable them to move fast enough to help businesses (small to large) before they go out of business. Because going out of business is an urgent, very real possibility for many right now.
Create a path forward
In a few weeks, PPP lenders will need to start collecting data from loan recipients about how the money was used and whether it meets government criteria for forgiveness. Financial institutions need to ask themselves if their technology can support this with the same agility and speed needed to get the loan application up.
Additionally, we must acknowledge that just preparing for more PPP loans is not enough. According to SBA numbers, more than 50% of U.S. small businesses are home-based—financial institutions must consider additional short-term and long-term strategies that small businesses need to survive for longer than just the next two months and include the needs of microbusinesses and home-based ventures.
Quick decisions and agile action are the new normal
While we have known for a long time that intentional investment in digital processes is a path to growth, it has become apparent that digital is also essential for sustaining the “new normal.” In my conversations and observations over the last couple weeks, institutions with existing investments in fast and versatile technology platforms have been able to navigate these demands with the most success.
Financial institutions of all sizes need to prioritize flexibility and speed as they revise their strategy to position themselves for success, no matter what current and future crises may bring.