Podcast: How JPMorgan uses AI to support SMBs

JPMorgan Chase is scaling its digital resources and fintech integrations to support small business owners through economic uncertainty and continued digital transformation.

The effort starts with understanding business owners, John Frerichs, head of global SMB payments at the $4.3 trillion bank, tells Bank Automation News in this episode of “The Buzz” podcast.

“Our duty is to be here for our customers in difficult and uncertain times,” he says.

According to JPMorgan Chase’s March small business sentiment survey, 78% of respondents were optimistic about the future, with about 40% planning to expand, Frerichs tells BAN. However, tariff concerns could cause confidence to dip slightly in April, he notes. Chase expects the results of its April small business sentiment survey by early May, the bank shared with BAN.

With April marking National Financial Literacy Month, Frerichs emphasizes its importance: “We want to make small business owners’ life as easy as possible. Part of that is through financial literacy.”

For example, the bank’s Coaching for Impact program, which provides consulting, on-demand financial education and banking tools for entrepreneurs, has grown from four cities to 38 since its 2020 launch to include 82 senior business consultants. “So far, 7,000 small businesses have gone through the program,” Frerichs says.

To help business owners make data-informed decisions, Chase applies AI and analytics to transaction data. “We take anonymized transaction data and spin it back to … a small business owner, showing sales, customer demographics and transaction trends,” he says.

Chase also offers SMBs end-to-end digital tools, including:

• Payroll integration via fintech Gusto;
• An e-commerce gateway through Visa-owned payment gateway Authorize.net;
• Real-time, same-day and scheduled payment options;
• Digital invoicing; and
• Omnichannel acceptance for in-store, online and mobile transactions.

“We try to always bring that all together in as streamlined a way as possible,” Frerichs says. “Small business owners need time back.”

Learn more about how the nation’s biggest bank is tailoring solutions for SMBs in this episode of “The Buzz.”

Subscribe to The Buzz Podcast on iTunes or Spotify,  or download the episode.

The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

Madeline Durrett 06:32:49
Music, hello and welcome to The Buzz, of bank automation news podcast. My name is Madeline, direct Senior Associate Editor at Bank automation news today. I’m joined by John Frerichs, Head of Global SMB payments at JPMorgan Chase John. Thanks so much for joining me today, of course, thank you for having me. I really appreciate it. And as you know, April is National Financial Literacy Month. So how is JPMorgan Chase using digital tools to promote financial literacy and wellness among small business owners, especially in today’s uncertain economy. What are the unique insights they need at this time that Chase is providing through technology? Yeah, this is such an interesting question, something that I’m personally passionate about as well, but

John Frerichs, head of global SMB payments, JPMorgan Chase 06:33:38
let’s just lay the groundwork. Like running a small business is tough, and we, at JP Morgan, as part of the chase for business franchise, want to make small business owners life as easy as possible. Part of that is through financial literacy. So if you go to our website, Chase business online, most notably, you’ll see that we have a pretty robust knowledge center. So based off of questions that we’ve gotten from small business owners and merchants that we work with, we’ve set up a series of articles that help explore some of those topics that they’re interested in. I’m sure a number of other providers do that. One thing that I think is uniquely distinct for us at Chase is that Ben Walter, who’s the CEO of business banking, actually does a podcast. So he has his own podcast called the unshakables, where he interviews small business owners talks about a day in the life, and then they’ll hit on areas of interest. For example, risk and fraud is a big topic right now, so he had a deep dive episode on specific risk and fraud and how small businesses can deal with it. So I thought that is a pretty unique example of something that we’re doing above and beyond on behalf of our merchants. Yeah, absolutely, that’s really interesting, and that is definitely a hot topic right now. Can you also share how Chase is integrating education and behavioral insights into its platforms to support smarter financial decisions for entrepreneurs? Yeah, of course. So the Knowledge Center is, is the big one that I already touched on previously, and we actually sort by whether you’re starting, whether you’re growing, or whether you’re managing your business. So we’ll have examples about succession planning, for example, and we’ll have some articles on there that might help. We also have a section for courses and tools. So these are self guided courses that you can take as a small business owner through Chase business online that will help kind of teach you about your credit profile, your lending options, topical things that we hear about from small businesses a lot. One other thing that might be a little less digital in nature, but I think is very interesting, is our coaching for Impact Program. I don’t know if you’ve heard about this or not, but we actually launched sort of a coaching and mentoring program for our small business customers back in 2020. Started off pretty small. It was just four cities, eight senior business consultants, and it’s grown really rapidly since then. So we now are in 38 Cities with 82 small business or a senior business consultants, and we’re going to expand even further. So just another example of how we’re complementing our digital tools, but with also like in person, coaching, mentoring to help our small businesses thrive. Wow, do you have any metrics that you can happen to provide on adoption of that program since it was launched, yeah, yeah, actually, we pulled the numbers most recently, and we have graduating programs kind of every month. So far, 7000 small businesses have gone through the program. That’s great. Yeah, very interesting. So what trends are you seeing in your monthly small business sentiment data, and how are you using that intelligence to shape product development for new programs or client engagement strategies? Hot, hot topic right now. So I’ll bifurcate my answer between what we heard at the end of March and then what we’ve heard more more recently. So at the end of March, which is when we do our monthly pulp check, we had about 78% of small businesses saying that they were optimistic about the future. I think to start a small business, you have to be optimistic by nature. But that’s a pretty high number, yes, and even within that, about 40% we’re talking about expansion. So let’s roll forward the clock a little bit. We all know in April there’s been a little bit more macro economic turmoil or uncertainty, both in the market and the potential pro approach to tariffs across the globe. So we wanted to do a pulse check with our small business customers mid month. So a week or so ago, we just did a quick pulse check, not statistically significant by any means, and we heard, perhaps unsurprisingly, a bit more uncertainty. So I think folks are now sort of taking more of a wait and see approach, and that is with regards to what they might have to do with pricing, what they might have to do with inventory, what they might have to do with their staffing levels, how they’re going to approach their lending needs going forward. So they’re in a wait and see approach. We’re also in a wait and see approach too, just just given that a lot of things may change, and they may change rapidly, but it kind of gives you insight into how you could help them and anticipate emerging needs that maybe weren’t as prominent before, of course. And I think what you’ll see is we will adapt, not only our our our coaching program that I talked about, but also our digital tools online to represent what’s most topical. So if it was succession planning in the past and now it’s managing an uncertain global macro economic environment, you will see us update the tools and the knowledge center articles that we post publicly available for free,

Madeline Durrett 06:38:56
and how is Chase leveraging AI or data analytics to better understand and respond to small business owner pain points in real time?

John Frerichs, head of global SMB payments, JPMorgan Chase 06:39:05
Great, great question. This is a big topic. Everyone wants to talk about AI right now, and we have a really cool story here. So going back to 2022 we were on sort of the cutting edge of this. We launched a very interesting customer insights product or service, whatever you want to call it, but imagine that if you did your payments with Chase, we would take all of that anonymized transaction data and spit it back to you as the small business owner. Tell you about your sales. Tell you about the demographic profiles of your customer, tell you about when you are doing the most transactions in your store. Tell you about whether your customers were interacting with you online, in store or mobile. And then that would help our small business owners figure out how they want to staff, how big their staff should be, where they should market towards, what demographics and what neighborhoods. So we know that not every small business owner is big enough to have a staff of data scientists or AI experts that can crunch all this data and pull out the insights. And we figured that was something that we as JP Morgan Chase, could uniquely do on their behalf. So we were super excited to sort of apply some of the AI and data analytics tools that we have in house, but presented to our small business owners in a very value added way. So it’s been an important product and feature for us over the last two or three years, and we’ve gradually rolled it out to bigger and bigger populations of small business customers. That’s great, because there’s definitely rising demand for personalization in that segment, 100% and that’s what we want to do, is enable these small business owners to be very targeted in their marketing, be very targeted in their staffing. Running a business is hard, and we want to help them as much as we can.

Madeline Durrett 06:40:57
So what are the most notable shifts in small business owner needs or behaviors in 2024 and 2025 How are you adapting your digital payments infrastructure in response to these trends? I.

John Frerichs, head of global SMB payments, JPMorgan Chase 06:41:10
Yeah, couple thoughts. So I think maybe these shifts go beyond just 24 and 2025 but we think small business owners are prioritizing security. We talked about risk and fraud a little bit before the prioritizing speed, simplicity and flexibility. So we look at that and say, like, Okay, what? How can we help? So a couple areas within payments that I want to talk about, one in terms of how small business owners make payments. So what we have launched more recently is is called a Faster Payments module, or Faster Payments capability, where you or a small business owner can go in and say, I want to make this payment real time. I want to make it same day. I want to make it standard, which, you know, could be one or two or three days. So a small business owner can now say, like, great. I now know the speed in which I need to pay this bill. I might want to hold in my cash a little bit longer. Great. I’ll set it up further out into the future. But that is one way in which we are helping them make payments, and in terms of accepting payments, like if somebody wants to accept a credit card, we are increasingly thinking omnichannel. So we know that small businesses may accept payments online, through mobile or in store, and we want to help them with all of that. So we rolled out a number of new features across those three dimensions. Yeah. And kind of building on that, we’re also seeing a lot of emerging tech trends in the payment sector. Buy now, pay later, real time payments, which you touched upon, embedded finance, even e commerce integrations. How is that shaping the way Chase serves small business clients, yeah, this is a super dynamic space, payments, banking, definitely, tons of Digital Trends are always coming at us. So we talked about real time payments. Let me hit on the other two in terms of embedded finance and E commerce integrations. Embedded finance can mean probably a few different things, but for us, what it means is, how do we simplify the life of our customers and sort of make all of their financial needs as accessible as possible in a streamlined way? So one very unique way that we did this is in our chase for business complete banking product. We have payments acceptance built right in. You don’t have to be underwritten twice. You don’t have separate credentials. You don’t have to go through a separate review. You get a bank account. A few more clicks, you get a payments account. So that for us is embedded finance. We’re making payments and banking one. We’ve now taken it a step further, more recently for our payments customers, through a payroll partnership that we have with gusto. We heard from a lot of our small business customers that payroll is in need of theirs. They view us as a trusted source of advice. We thought, hey, why don’t we go with a best in class FinTech provider in gusto and create a joint offering where we are offering through Chase business online our small business owners a payroll option as well. So that’s another example of sort of embedded finance that we have rolled out recently. Within e commerce. We’re aware that there are tons and tons of ways of doing e Commerce today. There are store builders out there you can sell through Pinterest or Instagram or whatever it might be. So more to come in this space. But one thing that we have done so far, is partnered with a payment gateway called authorize.net and you can take that payment gateway to all the different web stores across the internet, and that is our way of helping our customers grow. Is saying, Come to chase. We’ll get you a bank account, we’ll get you a payments account. We’ll also get you this payments gateway that lets you go, lets you go do a number of E commerce integrations in the way that suits you best, that makes things a lot more efficient. Yeah, what we try to do as much as possible is simplify. One of the jobs to be done for our small businesses that we want to fulfill is saving them time. Small business owners need time back. So we want to minimize the amount of external vendors they have to deal with, the amount of credentials they have to remember, the amount of websites that they need to log into to see their financial profiles. So we try to always bring that all together in a streamlined a way as possible.

Madeline Durrett 06:45:25
And how are you using client feedback and sentiment data to inform Chase’s product roadmap for Small Business Services. I love this question. This is one that I’m super passionate about. So of course, like all of our competitors do, I’m sure as well, we will take massive amounts of quantitative and qualitative research. We have design teams, we have research teams that will go out and do market surveys all the time, asking about features, asking about value propositions that resonate. So that is something that we do, Evergreen. On top of that, what we have started doing, most recently in MySpace, which is payments, is

John Frerichs, head of global SMB payments, JPMorgan Chase 06:46:07
we will take our products to events that we are posting. Working, and we will put them to the test. So, for example, Ben Walters hopes hosts Business Banking conferences throughout the year. What should take our products, put it live in front of those small businesses or attending they’ll poke, prod, touch, ask us questions, ask us how it works. Tell us what their use cases are today, and we’ll take that feedback one step beyond that when we as Chase host an event. So for example, I’m out here in San Francisco, last September, we hosted the acquired podcast at a live event at the chase center here. We actually used our payments technology, our card reader and our tap on phone technology, to power some of the merchandising stations. And so what better way than like at a chase centered event, using Chase centered payment technology to have I think we had 1000s of people try our technology, and then we will get all that feedback from the small business owners that are running the merchandise shops to help us improve our products and services. And then a last one, I told you I was passionate about it, so sorry for the long answer. Whenever I get my team together for an all hands, I try to invite one of our real small business customers to come and give us feedback. So I will ask how they got started, what they think we do well and what they think we can improve upon, and we get some very interesting answers. So last year, we had a tattoo owner in Dallas that gave us very specific feedback about when he wants to see us updating our software on our payments devices, because he does his work in the middle of the night. So it’s you know, you never know the feedback that you’re going to get, but it’s important for us to get it. Thank you. And looking ahead, what role do you see Chase playing in helping small business owners navigate both the economic volatility you mentioned and the digital transformation in financial services over, let’s say the next 12 to 18 months? I think we view, or I view, and I’ll speak on behalf of the broader JP Morgan Chase enterprise like our duty is to be here for our customers in difficult and uncertain times. That is what we are here for. So what the next 12 or 18 months hold? We’re not sure, but we want to make sure that we are updating all of our Knowledge Center articles, updating our coaching programs to help educate small business owners on what’s happening in the market. So that is one way you will see us evolve with the topics that we’re hearing from our small business owners, and provide those educational materials, tools, courses, Ben’s podcast will reflect what’s going on in the environment. On the digital transformation side, you will also see us continue to adapt our offerings. So for example, we recently rolled out a digital invoicing product people had asked us for that as part of their business account. We launched sort of a first generation last year, we will we have a very healthy road map. We want to keep those features evolving based off of customer feedback and based off of trends that we’re seeing in the market. So that will be true for invoicing, that will be true for our business banking, demand deposit accounts. That will be a true for all the payments acceptance devices that I own, and I also sort of previewed that. I think we’ll do some more robust e commerce integration capabilities going forward as well. So all of that is our way of trying to keep up with the market on behalf of our customers. I’m really looking forward to some of those product launches on the roadmap. Yeah, there’s a lot of interesting things to come.

Madeline Durrett 06:50:12
That’s it for today’s episode. You’ve been listening to the buzz bank automation news podcast, please follow us in LinkedIn, and as a reminder, you can rate this podcast on your platform of choice. Thank you again to John Friedrichs Head of Global SMB payments at JPMorgan Chase for being on the show. And thank you all for listening. And be sure to visit us at Bank automation news.com for More news on automation and financial services.

John Frerichs, head of global SMB payments, JPMorgan Chase 06:50:17
Thank you. Applause.

Transcribed by https://otter.ai