Paul Christensen is the CEO of Previse, the AI fintech that gets suppliers paid instantly.
If 2020 was the year the world moved from paying lip service to digitisation to relying on it, then 2021 is the year we leverage technology to implement strategic and sustainable change. This starts at the very top.
The UK Government recently confirmed £800 million in funding for its ‘blue-skies’ Advanced Research Projects Agency (Arpa) which will fund research into cutting edge Artificial Intelligence (AI) and data. This research has immense potential to solve long-standing issues in how we store, process and harness data across government and industry.
The promise of technology itself doesn’t need much advocacy: most industries now accept that they could do things better by introducing digital solutions. The key for government will be to carefully identify where and how new technology can be applied in the most effective way. To do this, it must ensure that research conducted by the likes of Arpa is carried out in step with the industry players, to translate research into commercial technologies.
Nowhere is this need for technological intervention clearer than in the world of B2B payments, which are positively archaic in comparison with B2C. Small businesses have suffered greatly for many years as a result of this and their lot has been made worse by the pandemic. In January this year, it was estimated that UK SMEs are chasing £50 billion in late payments.[1]
Furlough, CBILS and SEISS grants have been crucial lifelines but have left out many and racked up debt which will have fiscal consequences for future generations. One way for the UK Government to protect SMEs in the long term is by harnessing innovative technology, to get all suppliers – no matter how small – paid quickly. In order for this to work, government needs to establish an open dialogue with tech-forward businesses to determine how it can best leverage technology to help.
AI enables SME suppliers to be paid instantly, while large corporates pay on their normal terms. Small businesses unlock much-needed liquidity while large corporates strengthen their supply chains at minimal cost. A true win-win for business that doesn’t cost the taxpayer a penny.
By leveraging cutting-edge technology and working in line with business to develop inclusive solutions, government can actually bring about a cultural shift in B2B commerce, where instantaneous payment matches that of the B2C world. After all, a customer couldn’t go into Starbucks and order a coffee, promising to pay in 30 days. Technology, in consultation with industry, is the key to unlocking a new era of equitable B2B payments.
The UK Government needs to ensure that the research emerging from the likes of Arpa looks to address the very real pain points that businesses suffer. Practically speaking, this can be done by Arpa working in tandem with government bodies best positioned to promote the technology – such as the Department for Business, Energy & Industrial Strategy – and ultimately, the businesses which seek to benefit from it.
The Government plainly understands the role of data in the UK’s future but must ensure a co-ordinated approach to create innovative solutions that truly benefit Britons. Harnessing AI to tackle the slow payment problem would allow the UK Government to stimulate an inclusive recovery without further increasing the taxpayer burden. Giving every small business the option of day one payment is just one instance of how government could work with innovative businesses to leverage AI and data to implement genuine change.
Arpa is often dubbed the ‘blue skies’ research agency. Aiming high in pursuit of change should certainly be applauded. However, government inter-departmental coordination and collaboration with industry remain crucial for the agency to be effective.
By engaging with industry, government and Arpa can encourage businesses to embrace technology, to update antiquated payment practices and establish fair payment terms. Creating cutting-edge technology is commendable, but using it to implement change requires a coordinated effort. Let’s hope that while Arpa reaches for the sky, it keeps at least one foot on solid ground.
[1] According to Tide Bank
