FinTech interview with Jason Schwabline on modernizing payments, reducing legacy risks, improving SMB cash flow, and leveraging AI-driven automation today now!.
Jason, can you share a bit about your professional journey and how you came to focus on modernizing receivables and payment operations for banks and credit unions?
Throughout my career in financial services, I’ve seen long-standing systems fade into the background, even though they’re still used every day and continue to create complexity and risk.
Most industry energy is focused toward the next new thing, whether that be a new channel, a new front-end experience or a new technology. That is important, but what is often overlooked is the modernization of the legacy foundation. In many cases, it is more important since the total cost of ownership and the risk profile around those legacy workflows can grow exponentially over time.
I have always enjoyed a certain kinship in taking technologies, processes, products and solutions from the past and aligning them with the future. When others think a problem has “peaked,” I take that as the time to see the true opportunity, especially when the problem is still very real for financial institutions and the small businesses they serve.
BAI’s 2026 Banking Outlook highlights payments as the top operational pain point for SMBs. Why have payments become such a critical factor for SMB satisfaction and retention?
Two things are happening at once. First, individuals are starting businesses quicker than ever, and that is worth celebrating. SMBs are a primary engine of local economic growth and they feel operational friction immediately. Second, the feedback loop is faster than ever. Most SMBs are operating with a digital presence, and that naturally brings digital payments, infrastructure and new expectations. But it also means the consequences of avoidable inefficiencies show up more rapidly and publicly.
The challenge is that payments do not exist in isolation. According to BAI’s 2026 Banking Outlook, while 95% of small businesses use digital tools, most are managing their finances across six different platforms. Many SMBs are actively looking for more bundled accounting and payment services because fragmentation makes it more difficult to understand cash flow, reconcile transactions and forecast effectively.
When customers can’t efficiently pay an SMB, or when the SMB can’t efficiently pay vendors and manage their own receivables, operational friction compounds quickly. And now, that frustration does not stay private. Online reviews, social channels and word-of-mouth spread quickly. In my view, when customers can’t pay or get paid easily, it becomes a red flag and social media can now accelerate how quickly dissatisfaction turns into lost business.
What specific features or capabilities are SMBs demanding from their payment systems today?
Simply put, SMBs want payments to be fast, simple, and predictable. They expect the system to be straightforward for enrollment, and they want operational ease of use. Self-service is paramount, and in some cases, it is almost the starting point. Many SMBs are microbusinesses or even side businesses. This may be a second job or endeavor they are building outside of traditional hours, so having the ability to manage payments in a digitized, self-service way is mandatory table stakes.
Where are legacy receivables and payment workflows creating the most risk for banks and credit unions?
The biggest risk is in very tangible places, especially where paper and physical movement still exist. Checks are still written, stored and mailed, creating a challenge at every touchpoint. Additionally, checks can be misplaced, stolen or intercepted while in transit which increases inherent risk.
According to AFP’s 2025 Payments Fraud and Control Survey, 63% of organizations reported attempted or actual check fraud in 2024, making checks one of the most targeted payment methods even today. Despite this exposure, more than 75% of organizations say they have no plans to reduce check usage over the next two years, which suggests that many institutions, and the SMBs they serve, remain reliant on workflows that are inherently risky.
These repeated touchpoints, including physical handling, mail and manual data entry, create opportunity for loss, delay and fraud. Even as the industry has built controls around certain aspects of risk, the basic mechanics of paper and disconnected workflows continue to expose banks, credit unions and their SMB customers to unnecessary risk.
How do outdated payment systems affect SMB relationships, and what are the potential consequences for banks and credit unions?
Outdated payment systems hurt SMB relationships because the business cannot bring money in or distribute money fast enough. Time-to-funds is incredibly important for SMBs. These businesses are not managing float the way large enterprises do. Many operate with tighter margins and depend on predictable cash flow to pay employees, manage vendors and reinvest in their business. When payments are slow to arrive or reconciliation requires manual work across disconnected systems, it creates uncertainty and operational stress.
When those issues persist and a financial institution struggles to prevent or resolve them clearly, confidence erodes. SMBs today have an abundance of options, and they are far less willing to tolerate friction in such a critical juncture. Over time, outdated systems do not just create operational headaches, they lead to gradual disengagement and eventual relationship attrition, often without formal complaints or warning signs.
For banks and credit unions, the consequence is not only increased operational strain, but also the gradual loss of SMB relationships that are essential to long-term growth.
As we look toward 2026, what should financial institutions prioritize to modernize payments while minimizing operational strain?
The first priority is automation with purposeful AI, and payments are one of the best places to use AI safely and effectively. You not only reduce strain, but you also improve consistency.
Operational strain is also driven by a workforce reality where fewer people are electing to pursue careers in bank back offices or treasury operations. That means institutions are losing valuable knowledge. When that happens, you need fail-safe solutions built into the process, similar to how the industry has approached fraud controls with automated checks and balances, with human eyes touching true exceptions. Purpose matters here, and AI cannot just be a checkbox item in a budget. It needs to be deployed intentionally, with a clear idea of what you are trying to improve and what “good” looks like operationally.
The second priority is moving toward more unified platforms in payments, not just for front-end movement of money, but for the back-end processing and exception handling. Payments have historically been a “pick your poison.” ACH from one provider, cards from another, and so on. Over time, that creates operational pain because employees end up watching queues and managing exceptions across multiple vendors. Modernization must address the entire workflow, front end and back end.
Reconciliation is a major component of this. If you modernize the customer-facing experience but ignore reconciliation and exception workflows, you still have a problem.
How can banks leverage technology to close the gap between SMB expectations and legacy infrastructure?
SMBs expect the same level of speed and simplicity they experience as consumers because they are consumers, simply now acting as proprietors. That expectation carries over into business banking speed, clarity, self-service and a smooth digital experience.
Technology helps close the gap when it modernizes how payments are initiated and delivered, and how they are managed on the back end, especially reconciliation, exception handling and fraud safeguards. The goal should be fewer disconnected tools, fewer manual queues and fewer points where a relationship depends on someone remembering how to “work around” a legacy system.
What metrics or indicators should financial institutions monitor to ensure their payments modernization efforts are improving satisfaction and retention?
I’d track two categories: operational performance and relationship health. Look at the speed at which payments are arriving, and then how quickly they are being applied, managed and resolved across the back office. Modernization is not only about sending money; it is about what happens after it is sent as well.
Monitoring customer behavior such as, net new growth, customer “bleed-off” and time-in-relationship is vitally important. If SMBs are departing early and quietly, something is not working. If they are staying, expanding their relationship and growing alongside the institution, it indicates that the services and experiences being delivered are meeting their needs. There’s no magic metric that replaces this reality. Many SMBs won’t complain to your staff, they will simply vote with their feet.
In a competitive environment, how can banks and credit unions turn payment challenges into a strategic growth opportunity?
Payments can become a growth opportunity when institutions stop treating it as a set of disconnected rails and start seeing it as a relationship engine. That means delivering a modern experience that matches SMB expectations, faster time-to-funds and smoother workflows, strong fraud controls with clear guidance and operational simplicity behind the scenes such as less queue-watching and fewer exceptions across vendors. When SMBs feel confident in how money moves and feel protected in the process, they remain loyal customers, which equates to deeper relationships.
What key advice would you give to financial institutions that are just beginning their journey to modernize payments and strengthen relationships with SMB clients?
Do not ever assume the SMB understands the lifecycle of their money. Walk them through the advantages and disadvantages of different payment paths. Then connect it back to what is valuable for their business, not what is easiest for the institution. We do not always take the time to consult. Too often, we treat the request as, “They want a way to take a payment.” Take that question to the next level:
- How do you want to take a payment and why?
- What are you doing with the funds after receipt?
- Who are your customers?
- What does your receivables flow look like?
Always remember that SMBs are consumers as well as business owners. The consumer experiences they receive shape their expectations; hence, they expect the best experience possible and to deliver that experience to their customers. If you build around that reality, you foster stronger relationships.
- A quote or advice from the author
- “Modernization isn’t just a better front end—it’s fewer exceptions, fewer workarounds and a simpler way to manage receivables end to end.”
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