FOR IMMEDIATE RELEASE
WASHINGTON, D.C. – September 9, 2020 – Michael Hiles, CEO of blockchain technology company 10XTS, presented testimony today before the U.S. House Committee on Small Business, addressing the challenges and opportunities facing the financial services industry and government agencies such as the Small Business Administration (SBA). Hiles discussed the transformational role of emerging technologies like blockchain in reshaping financial records management and increasing trust in transactions. His remarks focused on how blockchain technology and digital innovation can streamline operations, reduce redundancy, and ultimately create a more secure and efficient infrastructure for financial services.
Hiles’s testimony highlighted the growing disconnect between traditional banking and fintech companies, underscoring the need for modernization within federal programs, particularly those administered by the SBA. He detailed the challenges posed by legacy financial systems and the impact of shifting consumer expectations on small business lending. Hiles offered strategic recommendations for Congress and the Administration on ways to facilitate digital transformation, operational excellence, and efficiency within the SBA and broader financial services landscape.
The Current State of Financial Services and the Role of Fintech Disruption
In his testimony, Hiles outlined the “tidal wave” of disruption that has reshaped the financial services industry, with fintech companies rapidly outpacing traditional banks in terms of digital service offerings, consumer engagement, and operational flexibility. This disruption, he argued, has highlighted significant challenges within legacy financial services infrastructure, which often struggles to keep pace with the agility and efficiency of emerging fintech platforms.
“We are witnessing a monumental shift in the financial services landscape, where legacy banks are contending with outdated systems while fintech firms leverage agile technologies to meet consumer demand,” Hiles said. “For the SBA and other government programs, this shift offers both an opportunity and an imperative to innovate.”
Trust-Enhancing Technologies and the Power of Blockchain
Hiles emphasized the critical role of trust-enabling technologies like blockchain in solving many of the information management challenges faced by government agencies and traditional financial institutions. Blockchain, he explained, offers a secure, tamper-proof method for managing financial records related to identities, entities, assets, and transactions, including lending and payments. By implementing blockchain solutions, the SBA and similar agencies can reduce the risk and redundancy of their records, ensuring that the data they rely on is accurate, secure, and efficiently managed.
Hiles illustrated how blockchain can drive operational improvements:
- Secure Automation: Blockchain’s immutable ledger can enable automated verification processes, significantly reducing administrative overhead and improving record accuracy.
- Data Transparency: A decentralized record of financial transactions and documents enhances transparency, helping to build public trust in SBA programs and reducing opportunities for fraud.
- Redundancy Reduction: Blockchain enables a single, verified record of financial activities, reducing the need for duplicate information storage and streamlining information flow between stakeholders.
Challenges for Traditional Banks and Changing Consumer Expectations
One of the central themes of Hiles’s testimony was the gap between the evolving needs of small businesses and the capabilities of traditional banking institutions. Younger consumers and business owners now expect seamless, digital-first interactions, and as a result, financial service providers are under increasing pressure to deliver online, accessible services that meet these expectations. Hiles argued that traditional banks have been slow to adapt to these changes due to their reliance on legacy systems, which often limit their ability to innovate and deliver the experiences today’s consumers demand.
“The expectations of younger consumers are reshaping the nature of banking,” Hiles noted. “Today’s small businesses require financial services that are fast, secure, and mobile. Legacy financial institutions need to evolve to meet these expectations, or they risk becoming obsolete.”
Hiles also discussed how fintech innovations are setting new standards for user experience in financial services, with fast, intuitive platforms that streamline the borrowing and lending processes. This shift, he said, is driving demand for regulatory and structural reforms within traditional financial institutions and government programs like those provided by the SBA.
Recommendations for Facilitating Digital Transformation and Operational Excellence
Hiles concluded his testimony with a series of recommendations for Congress and the Administration to support digital transformation in the financial services industry. His suggestions focused on facilitating the adoption of blockchain and other trust-enabling technologies within the SBA and across federal financial programs, helping to position the U.S. as a global leader in financial innovation.
His key recommendations included:
- Adopt Blockchain-Based Records Management: Implement blockchain solutions for record-keeping to reduce redundancy, improve data security, and automate verification processes. This would significantly increase efficiency and lower administrative costs for the SBA and other agencies.
- Encourage Partnerships with Fintech Innovators: Support public-private partnerships that enable traditional financial institutions and government agencies to benefit from the innovative solutions developed by fintech companies.
- Promote a Consumer-Centric Approach in Financial Services: Recognize the evolving expectations of younger consumers and design government programs to be accessible, flexible, and digital-first, aligning with the way today’s small businesses operate.
- Support Regulatory Frameworks for Digital Assets: Establish clear, forward-looking regulatory frameworks that encourage the adoption of digital assets while maintaining protections for consumers and investors.
“Blockchain has the potential to transform the way government programs and financial services operate, making them more efficient, secure, and responsive to the needs of modern consumers,” Hiles concluded. “It’s time to embrace these technologies to ensure that the United States remains at the forefront of financial innovation.”
About 10XTS and XDEX
10XTS is a blockchain technology company focused on creating compliant, secure solutions for digital asset management and data transparency. Its flagship platform, XDEX, provides a blockchain-based ecosystem for managing and verifying digital records, supporting compliance and security in both public and private sectors. Based in Cincinnati, Ohio, 10XTS works with government agencies and private organizations to bring blockchain innovations that drive efficiency and trust in modern governance and finance.
Media Contact
10XTS
Email: info@10xts.com
Website: www.10xts.com
