Digital wallets can streamline public fund payments and improve service efficiency, as highlighted by ClassWallet CEO Jamie Rosenberg in conversation with Axios.
ClassWallet CEO Jamie Rosenberg participated in an important conversation May 22 during an Axios Virtual Event, which also included U.S. Rep. French Hill (R-Ark.) and U.S. Rep. Wiley Nickel (D-NC). The discussion covered a range of topics, including digital funds, financial technology, and their impact on the future.
During the discussion, all agreed that navigating the distribution and access to public funds has long been a challenge for both constituents and service providers.
Delays, inefficiencies, and bureaucratic hurdles often complicate the process, making it difficult for beneficiaries to receive the support they want and need in a timely manner.
Rosenberg emphasized how digital wallet technology can streamline these processes and significantly improve efficiency for public agencies.
"What’s happening is, those agencies don’t have adequate financial technology to do that, so they’re relying on processes like reimbursement or modules in their accounting software that might not be designed for this complex problem," Rosenberg said. "Digital wallet technology has already made a profound impact for dozens and dozens of public funding programs."
Keep reading for a recap of ideas shared during the event.
Current Challenges in Public Fund Distribution
To help better understand the challenges of public fund distribution, it’s important to understand the stakeholders involved and the public agencies at the center. Rosenberg broke it down into the following challenges:
Balancing Diverse Needs: The agency tasked with distributing funds must balance the needs of policymakers who design the programs, the beneficiaries who want immediate access to funds, and the public, which demands transparency and accountability.
Managing Compliance: They are also tasked with ensuring that funds are spent as intended, which involves a significant amount of compliance and administrative work. This often leads to inefficiencies as they rely on outdated financial technologies and processes.
Striving for Satisfaction: Despite the challenges, these agencies strive to satisfy all of their stakeholders. Their role is crucial in managing the delicate balance between efficient fund distribution and strict compliance.
Improving Efficiency with Digital Wallet Technology
There are several key benefits of integrating digital wallet technology into government fund distribution:
Automated Compliance and Reconciliation
"A digital wallet automates all the payment reconciliation and compliance processes dramatically reducing the amount of time it takes to ensure the funds get spent as intended and to issue payment to a service provider," Rosenberg said.
This automation cuts down on administrative costs and reduces the time providers wait for reimbursement. Another bright spot? This leads to more participation from local providers as they know they will be paid in a timely manner.
"As a result, many more providers can participate in the program, the agency can manage compliance in a much more efficient way, we can reduce the cost of administration, and ultimately improve the outcomes of that program," Rosenberg added.
For example, with Early Child Care subsidies, simplifying the payment process allows more child care service providers to participate, increasing choices available to families.
Enhanced Beneficiary Satisfaction
Rosenberg noted that time and again, digital wallets lead to greater satisfaction among all parties involved.
"Ultimately, that agency that’s been delegated responsibility can be satisfied that they’ve managed the compliance and the funds are spent as intended in a highly efficient, cost-effective way that helps as many people as possible," he said.
Digital Wallets Can Transform Public Fund Distribution
The two members of The House of Representatives also emphasized the need for a transformation of how we distribute public funds during the Axios event.
Regarding modernizing the approach to fund distribution, U.S. Rep. French Hill, Vice-Chairman of the House Financial Services Committee, said, "It’s going to be more accurate, consumers would have less fraud, the government would have less improper payments."
"That technology is now available, and it’s rolling out to banks all over the country," Hill said. "There’s both a private sector alternative and a fed product called FedNow, and all banks are eligible to sign up for those products."
U.S. Rep. Wiley Nickel, also a member of the House Financial Services Committee, added during his portion, "We’ve got to get up to speed with the 21st century on the federal government level."
"There are so many layers of government, so much red tape," Nickel added. "It should be a lot faster. But that’s what this technology allows us to do, to improve the speed, the efficiency, the transparency. I’m all in on modernizing the way we send money from the federal government."
Digital wallet technology has the potential to transform the way government agencies distribute public funds. By adopting a digital wallet platform, agencies can improve their operational efficiency and enhance the overall satisfaction of the constituents they serve.
It’s time for more policymakers and government agencies to embrace these innovative solutions to streamline their processes and better serve the public.
Watch the full Axios Event video
Are you an agency tasked with distributing public funds? Schedule a demo with ClassWallet to see how our platform can help.
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