U.S. Bank Offers Insights on SMBs Tackling Tariffs and AI Adoption

Small and medium-sized businesses (SMBs) are navigating complex challenges related to tariffs and the integration of generative artificial intelligence (AI) into their operations. According to Shruti Patel of U.S. Bank, these factors are shaping the banking landscape for SMBs, influencing their financial strategies and operational efficiencies.

Impact of Tariffs on SMB Operations

With tariffs taking center stage, business owners face critical decisions regarding how to manage increased input costs. They must consider whether to absorb these costs or pass them on to customers, a choice that can significantly impact profit margins and pricing strategies. Patel emphasizes that this situation is driving an increased demand for short-term liquidity, essential for maintaining smooth operations and protecting inventory turnover.

To address these needs, Patel suggests that businesses should consider options such as revolving lines of credit and quicker approval processes. Cash-flow tools can help SMBs model scenarios over one or two quarters, determining the best course of action amidst fluctuating costs. Additionally, the expanded use of SBA-backed lending has emerged as a viable solution for firms seeking affordable working capital, particularly those with strong fundamentals but limited financial cushions after recent market volatility.

Generative AI in Everyday Business Practices

The adoption of generative AI is no longer a theoretical concept; it is now being actively deployed across various business functions. Patel notes that this technology is increasingly used for tasks such as drafting marketing content, summarizing customer support inquiries, reconciling expenses, and assisting in fraud detection.

U.S. Bank’s strategy focuses on two main areas: deploying suitable AI tools and training frontline bankers. This training enables bankers to guide customers in the safe and effective adoption of AI technologies. Key considerations include data handling, establishing human oversight, and identifying areas where AI can enhance efficiency without introducing risk.

Demand for Integrated Banking Solutions

Another trend noted by Patel is the growing demand for integrated solutions that combine banking, payments, and software functionalities. By synchronizing deposits, payments, invoicing, and accounting, businesses can experience significant productivity gains. This integration leads to faster reconciliation processes, improved visibility of real-time cash flows, fewer manual tasks, and more efficient month-end closings.

For both fintech companies and traditional banks, the opportunity lies in creating comprehensive packages that bundle these essential components. Through platform partnerships and embedded finance, businesses can connect accounts, cards, payouts, and back-office workflows under a single login, utilizing shared data to streamline operations.

U.S. Bank’s insights reflect the evolving landscape for SMBs as they adapt to external pressures and technological advancements. By understanding these trends, businesses can better position themselves for success in a competitive environment.