PPP Forgiveness Lessons and 2021 Perspectives from People’s United Bank FVP Michael Desimone

Sal Trifilio

November 19, 2020

People’s United Bank is a $60B financial institution serving hundreds of communities across Connecticut, New York, Massachusetts, Vermont, New Hampshire, and Maine. For more than 175 years, they’ve been there for their local businesses and this year was no exception.

When the CARES Act was passed, People’s didn’t hesitate to jump into the Paycheck Protection Program to make these SBA-backed loans available for their borrowers. With more than 18,500 PPP applications processed, totaling more than $2.6B in federal relief, People’s has made a significant impact in their communities.

Reflecting on the experience, People’s First Vice President, Small Business, Michael Desimone said it was one of the proudest moments of his career.

“You think back to when we were all kids and all of us wanted to be heroes, whether that be a police officer or an ambulance driver,” Michael said. “We ended up as bankers, and that’s not a bad thing … but this was one of those rare opportunities where banks got to be heroic.

I think, by way of the PPP, banks were able to put out 10 times [as many loans] than what the SBA on its own was able to put out after the 2008 downturn. [It is] a really good moment to reflect on.”

On Nov. 17, Michael joined our Insights team for a special edition of our Weekly Tuesday Q&A Session, where he looked back on People’s experience with PPP Originations, gave a look at their strategy and execution on Forgiveness, and discussed perspectives on the year ahead for lenders.

If you didn’t get a chance to join this session, here are a few lessons and 2021 perspectives Michael shared with us on Tuesday.

Lessons from People’s United Bank on the Paycheck Protection Program

People’s more than 400 retail locations are staffed by a team of nearly 6,500 employees, and Michael was responsible for shepherding them through the chaos of PPP. Here are three important lessons he learned along the way.

  • Success in PPP meant finding a scalable, sustainable approach. “Almost a thousand people [in the bank] just sort of dropped everything and got on board with PPP because they understood the importance and they wanted to be there for their clients,” Michael said, reflecting on the early days of the program. But this decentralized, all-hands-on-deck approach was neither efficient nor sustainable. Knowing they couldn’t push their bankers until 2AM on a nightly basis and continue to meet their borrowers’ needs, Michael quickly looked to adopt technology that could help them scale to meet the moment. “We were really excited to hear about [Numerated’s PPP Solution] … because we understood how good the UX and UI work.” Implementing the Numerated PPP Platform helped Michael centralize PPP lending, leading to a better, innovative digital experience for borrowers.
  • Communication with borrowers is essential during Forgiveness. While some borrowers have been anxious to apply for Forgiveness, others have been slower to start the process. Part of the challenge for lenders is ensuring those that are applying for forgiveness are doing so properly and those that are not get the information they need to begin. “So for quite a few weeks now, probably closer to a couple of months, we've been cascading emails to borrowers to invite them to apply,” said Michael. This has helped them initiate the process with nearly two-thirds of their PPP borrowers and helped them better prepare for the work that remains leading into 2021.
  • Technology has been key to providing an exceptional customer experience. For Michael, leveraging the Numerated PPP platform has been a boon in more ways than one. “Do you remember how many times E-Tran crashed [during originations] because of volume,” Michael asked attendees during the Tuesday session. “Just being able to automate a process like that, where people didn't have to deal with that frustration, was valuable.” Additionally, Michael added, the platform’s ability to pre-fill Forgiveness applications and handle loan calculations for borrowers so math doesn’t need to be rechecked by lenders, has saved his team significant time and effort. “Those are all little things on the margin, but they add up to hours and hours of saved time and effort, so we can add value elsewhere and make a difference.”

Looking Ahead to 2021: Perspectives on Banking and Lending

In addition to reflecting on PPP, Michael took some time during our Tuesday Q&A Session to look forward to the year ahead and share his perspectives on where he thinks banking is headed in 2021. Here are a few takeaways from our discussion.

  • Confidence in PPP Forgiveness could unexpectedly spur spending. While many have their eyes trained on Congress in hopes of legislation that could stimulate the economy, Michael sees a way lenders may be able to spur economic activity of their own. “I think giving PPP borrowers ample confidence that their loan will be forgiven will actually spur some capital spending amongst those borrowers that have kind of sat on their PPP funds, just to make sure that things go as expected before deploying.”
  • Traditional lending is becoming more complicated. Although “the doors are open” when it comes to traditional lending at People’s, Michael said “businesses are saving more” today, having learned some hard lessons from the 2008 downturn. Likewise, People’s has its own learnings that they’re bringing to traditional lending today. “We’re looking at more recent financial information, as you would expect,” he said, “and we want to see how companies have weathered shutdowns, and how well they've been able to adapt their business.”
  • Businesses will have reason to borrow in the new normal. Building off that last point, adaptation to doing business during a pandemic has spurred new borrowing in some industries, and is likely to do so in others. Michael notes a visit to a local dentist’s office and the high-end air purifiers they had in each examination room—a significant capital investment for such a business. “I think that’s relevant when it comes to borrowers and the way they might spend,” he said. “I think [businesses] will continue to spend on software for digitalization and that will create some financing needs as well.”

Get More Insights on People’s FVP Michael Desimone on PPP, Forgiveness, and More

As the person in charge of overseeing People’s Small Business segment, Michael is responsible for providing strategic leadership and initiatives that drive small business banking growth and success. His work in this regard, and in leading his institution’s charge on PPP, give him a unique perspective on the role technology plays in their success.

To learn more about People’s experience with PPP Originations and Forgiveness, or to hear more about Michael’s perspectives on banking in the year ahead, watch the full 30-min conversation above.

For more content like this register for one of our upcoming Weekly Tuesday Q&A sessions or Weekly Friday Platform Demos.

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