Hi Max, welcome to our Fintech interview Series. Please tell us about your tech journey and your story behind joining Capterra.
Ironically, I never thought I’d get into tech. In college, I explored writing about various subjects for the school newspaper, covering things like Texas politics to Life & Arts. When I left school, I planned on becoming a music journalist, but after a year of covering Austin’s music scene, I realized that, while I loved the industry, it would’ve been near impossible to make it a livable career at that time.
From there, I pivoted from journalism to social media and spent a few years creating content for small businesses across the country. Afterward, I transitioned to working with bigger businesses in the tech space, but as time went on, I started to miss digging into stats and writing long-form reports. To scratch this itch, I shifted fields once again and landed myself in marketing for a SaaS company, where I had the chance to cut my teeth on detailed whitepapers that explored the rise of e-commerce during the pandemic and how technology was being used to limit agent attrition in contact centers.
At that point, I started to become really interested in emerging technologies. As a Sci-fi fan, I’ve poured through everything from Phillip K. Dick to Octavia E. Butler, so it felt surreal – and a bit exciting – to be reading headlines about how AI was making waves across industries, so I decided that joining Capterra and becoming an industry analyst was a logical next step.
What does Capterra offer? What is its USP?
Capterra helps growing businesses find the right software and services through our marketplace of 100,000+ solutions across 900 categories. We offer access to over 2 million verified reviews, in-depth product comparisons, and data-backed annual software ranking reports for over 500 types of software— saving companies time, increasing productivity, and accelerating growth.
More than half of SMBs feel the need for more federal regulation and enforcement of the banking industry. What are your comments?
In short, I think a set of reforms and stricter oversight can prevent future banking crises, and overall, would be better for SMBs’ financial safety and security. Partly, this can come in the form of adjustments to the Dodd-Frank Act – which was partially rolled back by Congress during the Trump administration – namely, I’d like to see a change back to the previous statute that said once a bank becomes bigger than $50B in assets it would be subject to additional rules and oversight.
Lawmakers and legislators are looking at different ways to make changes so that failures like Silicon Valley (SVB) and Signature Bank don’t happen again. One thing that did stand out to me in Capterra’s 2023 Financing Survey was that, while 77% of SMBs say that they feel the FDIC’s deposit coverage of up to $250K is enough, a bit more than half of SMBs still decided to withdraw some or all of their funds from their primary bank after the bank failures.
I’ve seen new deposit insurance limits suggested ranging from $2M to $10M insured, but I think raising the cap to $500K or even $1M would be a good start. That way SMBs can be able to count on getting their money to pay utility bills and make payroll, etc. Another move that’s a bit simpler would be if the FDIC banned failed bank executives from taking on similar roles in the financial industry. Negligent leadership was a big reason why SVB and Signature bank failed, leading to financial uncertainty for many growing businesses.
To determine creditworthiness, different software is being used for cash flow management, budgeting and forecasting or loan origination. Could you name a few recommendations you would make? Any specific software SMBs should pay special attention to?
Given the recent volatile banking climate, SMBs might be interested in partnering with alternative lenders to large or international banks to navigate this process, and finance professionals, such as a certified financial planner (CFP) or accounting firm, can help them explore the perfect fit for their business needs. Software used for budgeting or loan origination can also assist SMBs with identifying key metrics and creating financial reports that can increase their chances of success when applying for funding, and in some cases, it can help organizations navigate tax compliance or to apply for tax breaks.
What are some of the most innovative solutions by fintech startups that you’ve come across in recent years?
Overall, one thing that I find exciting about fintech solutions is their ability to make financial services more accessible to underserved and impoverished demographics and to SMBs in general. From micro-investment apps that let people slowly build out a portfolio to digital lending platforms that offer businesses alternative financing options outside of traditional banks, there’s a lot of empowering tech out there. With that said, there are a few solutions that have really caught my eye, and I’m curious to see how they evolve in the future:
- AI and machine learning: AI and ML technologies are transforming many aspects of finance, including fraud detection, risk assessment, and investment analysis for SMBs. These technologies help enable faster and more accurate decision-making, enhance overall efficiency, and can reduce costs.
- Peer-to-peer (P2P) lending: P2P lending platforms connect borrowers directly with lenders, cutting out traditional financial institutions. This approach can provide better interest rates for growing businesses and higher returns for lenders, while reducing bureaucracy and streamlining the lending process.
- Mobile payments: The growth of mobile payment platforms, such as Apple Pay, Google Pay, and digital wallets, allow users to make quick, convenient, and secure payments. Mobile payments, in general, have been on the rise, and are playing a big role in the cashless economy.
What are some of the challenges technology leaders are facing while running their day to day business, what would you advise them to do to overcome these same challenges?
Broadly speaking, growing businesses need to embrace change, listen to their customers, and try to foster a culture of innovation and collaboration across the organization. Technology leaders are currently facing numerous challenges they must overcome to be successful in this turbulent economy. Here are just a few of the most common challenges and how to address them:
- Technology changes: Rapid technological advancements require growing businesses to stay updated and adapt quickly. From the top down, leaders should foster a culture of continuous learning, encourage their teams to explore new technologies and invest in emerging technologies like AI.
Regulatory compliance: Fintech businesses must follow complex regulatory frameworks, especially when laws keep changing to keep up with technology (like blockchain). Leaders typically need to consult with service providers like law firms to ensure compliance.
- Competition: The market is currently oversaturated with fintech startups that are targeting the same customers. Software vendors are facing challenges obtaining new customers amidst a glut of solutions. To combat this, leaders should prioritize customer feedback and leverage data analytics to make appropriate changes.
Your favorite FinanceTech quote?
“Technology shapes society and society shapes technology.” – Robert Winthrop White, Harvard psychology instructor
Thank you, Max! That was fun and we hope to see you back on globalfintechseries.com soon.
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Max Lillard is a senior analyst at Capterra, covering accounting and finance. His research explores the rise of digital commerce alongside advanced customer support solutions for businesses.