Small businesses around the country needed the Paycheck Protection Program to survive. It was community banks that often distributed the money.

Oct 26 2020

MoneyFest 2020: How Tech Helped Banks Deliver Relief to Small Businesses in Crisis

The federal Paycheck Protection Program provided cash to desperate employers, but getting the money out required a digital solution, a bank CEO and Mark Cuban.

Technology can make for some surprising partnerships. Consider the case of Jill Castilla and Mark Cuban.

In late March, Cuban, the billionaire owner of the Dallas Mavericks NBA team and one of the “sharks” on the popular television show Shark Tank, tweeted about his desire to work with a bank to get customers’ stimulus check money to them quickly.

Castilla, the CEO of Citizens Bank of Edmond, a one-branch community institution in central Oklahoma, reached out to Cuban. The result was an overdraft line allowing the bank’s customers to overdraw their accounts by as much as $900 while they waited for stimulus checks to arrive. But that was just the beginning of the pair’s partnership.

More recently — and more significantly — they teamed up again in May to create, a website for businesses that received emergency loans through the federal Paycheck Protection Program. The website allows businesses to apply for loan forgiveness, which is normally a confusing and complex process.

“COVID-19 has presented challenges like no other,” Castilla said in an interview with organizers of MoneyFest, an event sponsored by the financial services industry organization Money20/20 that will run virtually through Oct. 29. “We’re a small community bank, but we’re really called upon to be leaders in our community. When this crisis struck, we were right on the front lines, seeing the impact to our community, especially our small businesses. We really wanted to focus, as we’ve done for 120 years, on helping our community.”

Why Banks Played a Vital Role in the COVID-19 Response

Just like medical or public safety professionals, bank professionals are “economic first responders,” she said. “We have a duty of care. So what tools do we need, and how do we advocate for them if we need them from Washington and the regulators? And what do we have that we can use in a different way?” 

The website is just one example of how Citizens Bank of Edmond used technology to spring into action to help its community. Castilla explained that when the crisis struck, the bank was already planning to deliver a program to allow its small-business customers to access services from their cellphones or computers that would normally require a visit to the branch.

“We had just applied for a patent and begun the deployment of this ‘bank in a box’ program, where small businesses could access physical bank services with their phones, when this crisis struck and closed our branch,” she said. “We were able to quickly deploy another site to enable our small businesses to access those services that would normally be required in person.”

The key was its preparation long before the crisis struck, she said. Because the bank had been working to provide a needed service to its community, it was able to activate the program on short notice.

MORE FROM BIZTECH: Learn how small banks and credit unions can make a responsible transition to the cloud.

How Tech Can Solve Banking’s Accessibility Problem

Being innovative is “hard work all the time,” Castilla said, and having scarce resources makes it more challenging. But the scarcity of those resources, in some ways, is the engine of innovation.

“I wouldn’t have it any other way. We don’t have deep pockets. We don’t have a team of developers,” she said. “So ours is a nontraditional way of innovating, when you look at fintech, but it’s also the traditional way of innovating in terms of how businesses anticipate customer needs and fill them, and rushing to the scene of the need. So that scarcity of resources helps you be MacGyver, helps you use your stick of gum and paperclip to defuse the bomb. And that’s what was happening in this crisis: What tools do we have to use immediately, what more sophisticated tools do we need to advocate for and what flexibility do we need from the regulators?”

The economic crisis caused by the pandemic has underscored the banking system’s lack of accessibility for many small businesses and individuals, Castilla said, and digital innovation is a critical part of the solution. Financial services institutions need to make themselves “ridiculously accessible” to customers, she said, “whether that’s from a digital standpoint or by personally putting yourself out there.”

Getty Images/ Denis Tangney Jr

aaa 1