SMBs Embrace AI — And Expect Their Banks to Do the Same

When handheld calculators debuted in the 1970s, they cost as much as a week’s wages. Accountants were skeptical, preferring trusty paper ledgers. But within a decade, the newfangled tools had become indispensable. Today, small businesses are having their own “calculator moment” with artificial intelligence (AI). Across the country, history is repeating itself as small and medium-sized businesses (SMBs) that once thought AI business agents were the stuff of science fiction are now adopting AI tools at a rapid pace to stay competitive.According to U.S. Bank’s 2025 Small Business Survey, 36% of SMBs already use generative AI at work, and another 21% plan to do so within the year. A separate study from Reimagine Main Street found 82% of SMBs currently using or exploring AI feel the need to use AI to stay competitive outweighs any qualms about their AI usage, while Thryv reports a 41% jump in AI usage, from 39% in 2024 to 55% in 2025.For SMBs, AI adoption isn’t about chasing trends — it’s about working smarter. AI tools help SMBs automate content creation, analyze customer data, and streamline operations, saving an average of 20 hours per month for more than half of current users, according to Thryv. “Small businesses have moved beyond wondering if they should use AI — they’re determining how fast they can implement it,” explains Thryv President Grant Freeman.

Source: Thryv 2025 AI and Small Business Adoption SurveySMB Adoption Sets a New Bar for CFIsFor community financial institutions (CFIs), the new wave of SMB AI adoption presents both an opportunity and a warning. On one hand, customers increasingly expect the same AI-driven efficiency from their financial partners that they now enjoy within their own operations. On the other hand, CFIs risk appearing technologically behind if they fail to keep pace.Even as adoption accelerates, many small businesses still face barriers that CFIs can help address — from the cost and complexity of integration to the lack of strategic guidance on implementation. According to a new global report, 81% of SMB leaders believe AI can help achieve their business goals, up from 72% in 2024. Yet, only 27% say AI is regularly discussed in company-wide strategic planning. Growing use does not automatically resolve these deep-rooted barriers.In this rapidly changing skills economy, CFIs who help small businesses overcome AI-related challenges through practical guidance and accessible tools not only strengthen client relationships but also address the very risks of falling behind.AI in Action: Lending as One ExampleLending is just one area where AI is already reshaping how CFIs serve clients. More lenders are using AI to assess credit risk, detect fraud, and streamline underwriting. These solutions can cut loan processing times, reduce manual review errors, and improve the overall borrower experience.For CFIs, the lesson here isn’t to replace the human relationships at the core of their institutions, but rather to enhance the human touch. For example, AI tools can help underwriters process data faster and more accurately, freeing them up to focus on judgment calls and personalized guidance, where CFIs are known to excel. Beyond lending, these same principles of speed, accuracy, and trust apply to every facet of the CFI and SMB relationship, from advisory services and cash flow management to fraud prevention and customer onboarding.Still, with AI hallucinations running rampant, genAI guardrails matter: data quality, explainable algorithms, and human oversight remain essential to maintaining fairness, compliance, and lasting trust.From Lenders to Partners: 5 Moves CFIs Can MakeCFIs don’t need to match the tech budgets of national banks or fintechs to meet client expectations. They simply need to use AI where it amplifies what they already do best: delivering relationship-driven, insight-rich banking.1. Build AI literacy from the inside outBefore offering AI-enhanced products or services, your staff must understand how these tools work, which requires them to use the solutions themselves. CFIs could prioritize internal “AI 101” training to demystify common tools like genAI and provide an overview of key topics such as machine learning in fraud detection and predictive analytics in credit review. A well-informed team not only boosts operational efficiency but also helps customers feel confident that their financial partner is keeping pace with modern business needs.2. Combine data insights with human contextAI can help bankers see what the numbers alone can’t reveal. Predictive analytics can flag potential cash flow issues or seasonal dips before they become problems. However, where large banks might stop at the algorithm, CFIs can interpret those insights through the lens of local knowledge — advising business owners on when to restructure debt, adjust inventory, or plan for hiring. 3. Streamline lending with AI-enabled workflowsSpeed matters, especially when small businesses are used to digital-first experiences. CFIs can integrate AI into document processing, verification, and loan origination systems to reduce friction without losing oversight. AI-assisted underwriting can pre-screen applications or suggest credit tiers, allowing relationship managers to focus on final decisions and customer interaction. The outcome: faster approvals, fewer manual bottlenecks, and a more modern borrower experience.4. Partner with transparent, explainable tech providersAs SMBs grow more tech-savvy, more will start to ask how their financial institution’s AI models make decisions. To avoid the dreaded “black box problem”, CFIs should seek out vendors whose solutions are auditable, explainable, and compliant with fair lending and data integrity standards. This not only mitigates risk but reinforces CFIs’ reputation for transparency and trust — qualities that larger banks and fintech competitors can’t match.5. Expand advisory services into AI readinessCFIs are uniquely positioned to educate an entire generation of local customers. Hosting workshops on AI-powered cash flow tools or partnering with chambers of commerce to teach safe data practices can help any CFI become an indispensable community business advisor — not just a lender. Helping entrepreneurs adopt AI responsibly but also practically could lead to new financing opportunities and strengthen long-term relationships.A Human Edge in the AI EraAI is fast becoming a core element of every small business strategy, and CFIs that ignore this seismic shift risk falling behind the very customers they serve. Yet the qualities that define community banking — personal connection, local insight, and trust — remain irreplaceable.Just as online banking once complemented, not replaced, the branch experience, AI should be used to enhance what CFIs already do best: understanding local markets and helping businesses grow.As AI reshapes how entrepreneurs run their businesses, it’s reshaping what they expect from their banking relationships. CFIs that meet this moment — pairing innovation with the personal connection their clients value most — can redefine community banking for the next generation of business owners. The future of finance won’t be fully automated, but it will be powered by collaboration between humans and intelligent technology.