Paul Christensen is the CEO of Previse, the AI fintech that gets suppliers paid instantly.
If 2021 was the year the world moved from paying lip plan to digitisation to relying on it, then 2021 is the year we leverage technology to implement strategic and sustainable change. This starts towards the top.
The UK Government recently confirmed lb800 million in funding because of its 'blue-skies' Advanced Research Projects Agency (Arpa) that will fund research into cutting edge Artificial Intelligence (AI) and data. This research has immense possibility to solve long-standing issues in how we store, process and harness data across government and industry.
The commitment of technology itself doesn't need much advocacy: most industries now accept that they could do things better by introducing digital solutions. The important thing for government will be to carefully identify how and where new technology can be applied in the most effective way. To do this, it must make sure that research conducted by the likes of Arpa is completed in step with the industry players, to translate research into commercial technologies.
Nowhere is that this need for technological intervention clearer compared to the world of B2B payments, that are positively archaic in comparison with B2C. Smaller businesses have suffered greatly for many years as a result of this and their lot has been created worse by the pandemic. In January this year, it was estimated that UK SMEs are chasing lb50 billion in late payments.
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 safeguard SMEs in the long term is by harnessing innovative technology, to get all suppliers – no matter how small – paid quickly. To ensure that this to work, government must establish an open dialogue with tech-forward businesses to determine how it can best leverage technology to assist.
AI enables SME suppliers to be paid instantly, while large corporates pay on their own 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 anything.
By leveraging cutting-edge technology and working consistent with business to develop inclusive solutions, government can actually bring about a cultural shift in B2B commerce, where instantaneous payment matches those of the B2C world. After all, a person couldn't go into Starbucks and order an espresso, promising to pay in Thirty 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 companies suffer. Practically speaking, you can do this by Arpa working in tandem with regulators best positioned to promote we've got 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 function 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 allows the UK Government to stimulate a comprehensive recovery without further increasing the taxpayer burden. Giving every small business the option of day one payment is simply 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 technologies are commendable, but using it to implement change requires a coordinated effort. Let's hope that although Arpa reaches for the sky, it keeps a minumum of one foot on solid ground.
 According to Tide Bank