Brian Moran: What were the biggest needs of your SMB customers in 2020?
Ed Haidenthaller: Early in March we recognized that COVID was going to get worse before it got better and activated a team to determine what our customers needed most. Many banks were giving late fee and other similar waivers. We determined that was like putting a small Band-Aid on a large wound. Our customers were experiencing dramatic drops in sales due to restrictions, having to spend large amounts to change their sales practices, and dealing with employee protection strategies. Our customers needed ways to manage their cash flows, reduce outflows and “buy” time to reorganize to meet the changing environment.
Brian: The Pitney Bowes Bank provides equipment financing, commercial lending, and global payment solutions. How have each of these areas changed during COVID?
Ed: Let’s take each area one by one. Equipment financing has remained strong during the COVID time as many projects are “outdoors” and represent one of the ways to keep America employed during this difficult time. Sales in this area have been somewhat challenged as contacting and putting together deals over the phone, although possible, have been hampered by delays in delivery of equipment due to manufacturing slowdowns.
In payment solutions we saw an initial slowing in payments as people were restricted from going into the offices and paying bills etc., but that has returned to normal levels as businesses have been able to adjust the way they do business in response to the restrictions.
In commercial lending, we have seen a dramatic decrease in lending across the industry as banks attempt to understand the economic risks of their customers. The result is that the need for working capital solutions to our customers has increased dramatically and major players from the past have withdrawn, leaving a void. We have identified that gap and are moving expeditiously to meet those needs with new working capital solutions and products for our customers.
Brian: What are you forecasting in 2021 for the three areas?
Ed: We anticipate that equipment financing will remain strong and are working on new partnerships and arrangements to accelerate growth in this area. For payment solutions we will continue to see secular decline and companies shift to more electronic communications and marketing strategies. We will see a pickup in shipping-related spend and have already seen a dramatic increase in that area. In the area of commercial lending, we are really excited about our new offerings and see that as the largest area of growth for the bank which will accelerate the Bank into 2021, 2022 and beyond.
Brian: How did your employees stay connected to SMB customers during 2020?
Ed: The Bank has always prepared for a pandemic as part of its disaster recovery planning. We had tested our remote working environment frequently and so the change to remote work environment was natural and accomplished with little to no change to how we interact with our customers. Ongoing, we are trying to be more proactive in our stance to working with customers and reach out to them when their payment and usage behavior changes, rather than wait for them to call us with a problem. In this way, we can be more constructive in problem solving and have more options to help them before it really becomes an untenable situation for both of us.
Brian: Has The Pitney Bowes Bank developed any new products or services specifically for SMB customers as they pivoted their businesses?
Ed: The Bank is working on several product offerings to meet our customer needs.
We are working on working capital loans, both revolving and term loan facilities, we are looking at Purchase Power expansion for additional use other than postage and postage-related spend, and we are working through establishment of our SBA lending capabilities and will focus on 7a and express loans, as well as other working capital products. Over the next 6 months, as these products are brought online, we see increased ability to help our customers work through the impacts of this COVID pandemic on their businesses.
Brian: Thanks, Ed for your time and for all that you and The Pitney Bowes Bank do for small and mid-sized companies.