American Express on the future of lending and innovation

PaymentEye sat down with Gina Taylor Cotter at Money20/20 Las Vegas to discuss the future of lending and how American Express keeps up with innovation in the industry.

On American Express’ latest Business Loans product…

We recently launched our Business Loans product which is dedicated for our small business cardholders in the US.

Business Loans offers small businesses quick access to unsecured loans of up to $50,000, to grow their business or to consolidate debt. Businesses can apply online and receive a decision in as little as 60 seconds.

The product is part of our larger suite that we’ve been focusing on at America Express around business financing. Our launch was geared towards our small business customers where there was a need to grow capitals.

As we started to spend more time understanding the needs around small business financing products, we knew there was an opportunity to align our loan products to our Amex business cardholders as well.

Also part of our suite of financing products for small business owners is Working Capital Terms, launched in 2016, which is payables financing, a shorter duration loan for a business to be able to pay an invoice of a supplier or vendor.

On decision making at American Express…

Our decisions in the lending space were based around our customers’ needs. The initiative of Business Loans was to extend our current suite as we’ve been serving small business for more than 25 years in the US. We’ve been really focused on understanding the core needs of small business owners and are developing products and services to meet those needs. This includes helping small businesses get more customers or if they’re a merchant small business, help promote them to our card members.

Starting with core payments, charge cards and credit cards were our initial foray into the small business space. Since our first small business credit card launched in 1996, we’ve been really focusing on programs to help small businesses based on their needs.

There’s a lot of work across American Express focused on helping small businesses grow. One of the other needs is access to capital.

On speaking at Money20/20…

In our panel, discussion was based on tailoring operating capital solutions for small businesses. It’s clear that for the US market, small and medium businesses are the economic drivers of the developed world, where credit and lending is a key driver for their growth.

I wanted to reinforce the importance of small businesses, how they have a set of needs and a broader set of products and solutions to solve those. At American Express, we want to bring this to the table.

The days of a monocline in online lending will be challenged. There are opportunities in expanding the product suite.

On understanding data to predict trends…

Businesses are busy, and we get that – they lack time and resources.

As we’ve been serving small businesses, we have a network that enables us to understand the patterns and behaviours of our customers. We are able to leverage that information and analyse our data wisely to offer the right products at the right time and in a contextually relevant way with the experiences we have in our ecosystem. This is powerful.

On competing with fintechs…

We may be one of the larger players, however we want to stay relevant in the market and with small businesses, so we’re constantly focused on understanding our customers’ core needs.

At the same time, we’re closely observing what’s happening with fintechs in lending and how they’re approaching their offerings.

As the industry develops, it’s important to always start your solution with the core needs of a small business owner and fully understand it.

We understood there was a need for ultra-short term working capital to be able to pay vendors. Just like any business, we’re observing the market and then trying to adjust to make our solutions relevant for small businesses.

On lending trends for 2018…

What we’ve seen from last year to this year is a consolidation in fintechs. In Europe, there’s still a lot of growth happening, with consolidation in acquisition. I believe we’ll continue to see that.

I’m going to be observing what happens with platform players and those that have access to a large customer base and relevant data on those customers to make contextual relevant offers at the right time.

I’d be interested to see what happens with the tech giants such as Amazon and Google as and when they enter the lending space.

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