How Mastercard is using AI to boost minority business owners

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Mastercard’s generative AI small-business tool launching later this year will be trained on content from the card network’s own archives, along with licensed content from Newsweek, TelevisaUnivision and other sources of curated media to reach an inclusive audience.

Amir Hamja/Bloomberg

One area where generative AI is expected to make a big difference for financial services firms is in harnessing troves of data to personalize products and marketing. Mastercard is moving in this direction with a chatbot it’s developing to deliver custom advice to small-business owners.

With its plan to pilot Mastercard Small Business AI later this year, the card network aims to give all types of entrepreneurs — including minorities and marginalized groups — real-time answers to business questions via an AI-powered tool designed to limit bias, the card network said in a Thursday press release. 

The move comes as Mastercard realized from research that most small businesses operate without employees and 88% say they need mentors. Gen AI presents an opportunity to close some of those gaps.

“Mastercard Small Business AI aims to create mentorship at scale, offering always-on advice from an inclusive set of resources,” said Raja Rajamannar, Mastercard’s chief marketing and communications officer, in the release.

Using OpenAI as a base, the AI model will be trained to give users appropriate insights into business planning, raising capital, managing technology, getting loans and other strategies using Mastercard’s own archives of small-business educational materials and resources, along with curated content from third parties. 

The chatbot will tap insights from Mastercard’s Digital Doors program, which launched in 2020 to offer business users digital marketing insights, Mastercard Trust Center, which began providing business owners with cybersecurity guidance in 2021, and Strive USA, the financial inclusion hub Mastercard launched in 2022 to connect women- and minority-owned small businesses with capital and other help. 

Mastercard is also licensing third-party content to feed into the chatbot from articles, podcasts and interviews specifically vetted for small-business owners through partnerships Mastercard has formed with Newsweek and TelevisaUnivision, Mastercard said in the release.

“Research shows that 22% of new entrepreneurs in the U.S. are Hispanic, and 70% of Hispanics are more like to become small-business owners compared to non-Hispanics,” said Fernando Romero, senior vice president of U.S. digital advertising sales at TelevisaUnivision, the largest Spanish-language media firm in the world in terms of audience reach. Romero’s data comes from the Stanford Business School Latino Entrepreneurship Initiative “State of Latino Entrepreneurship” 2021 Research Report.

For now, TelevisaUnivision is working “primarily” with Mastercard to curate content for its AI initiative, but the firm has plans to expand its partnerships in this arena, Romero added.

Two other organizations specializing in minority businesses and communications will provide content for Mastercard’s AI tool — Los Angeles-based Blavity Media Group, a digital media shop with expertise in working with Black millennials, and Group Black, a Black-owned New York City-based media collective that includes the podcast Black Women Talk Tech and ReachTV, which supports Black content creators. 

To build its chatbot, Mastercard has formed a partnership with Create Labs, a six-year-old New York City-based firm that specializes in AI and application design for diverse audiences while limiting biases.

Group Black’s goal in working with Mastercard is to help the card network’s AI tool “go beyond existing online resources and search engines,” by giving minority small-business owners pragmatic information and inspiration, said Bonin Bough, the organization’s co-founder and chief strategy officer.

“It’s no secret that minority business owners face specific challenges due to the implicit bias that exists in our world — whether that be difficulty accessing capital, not having the same access to networking opportunities or simply breaking down racially motivated stereotypes that persist,” he said.

A Mastercard spokesperson said the card network’s AI tool is designed for all small businesses, and its emphasis on minority entrepreneurs ensures it will reach the widest possible base of users.

By licensing the content it plans to use to train Mastercard Small Business AI, the card network gains legal cover from situations like the copyright infringement lawsuit the New York Times recently launched against Microsoft and OpenAI for using its articles to train ChatGPT.

It’s still too early in the rollout of gen AI tools for businesses to see all the potential pitfalls of the new technology, according to one observer.

Mastercard’s use of gen AI to expand its customer relationships makes sense, but the new chatbot raises some “yellow caution lights” for Drew Kerr, longtime head of the New York City-based marketing and public relations firm, The Four Corners group. 

“AI has the ability to produce false citations,” Kerr said, noting that companies using gen AI for marketing and other purposes will need to be vigilant to avoid these gaffes.

Targeting minorities and using minority-owned firms to help shape gen AI content is a noble approach, but it needs to be authentic, according to Kerr.

“There is already an underlying mistrust minorities have of ‘being helped’ by large corporations because historically [many minorities] feel they have been taken advantage of,” he said.

Small businesses and their membership associations “will have their antennas up to make sure Mastercard gets the language and visual nuances right,” Kerr said, adding that “Mastercard may end up being the test case proving gen AI can work in these settings.”

The Small Business AI chatbot is the second of Mastercard’s new gen AI deployments. Last month, the card network launched Shopping Muse to help consumers pick out products online. Mastercard is also using GenAI algorithms in other corporate applications, including for testing and learning with AI Garage in India, Mastercard said. 

After piloting the chatbot in the U.S., Mastercard hopes to expand the concept to international markets and add more partners, the release said.