3 Benefits of AI for Credit Unions

In the last few years, artificial intelligence has become a major phrase, but what exactly does it mean? Once something meant only for governments, multinational corporations and elite individuals, AI has now become a seamless part our everyday lives, so ubiquitous that almost everyone uses some form of artificial intelligence every single day. Your video content specifically curated to taste by Netflix and your smartphone camera mapping your face to capture the perfect selfie are all courtesy of AI.

The fact that AI is so readily available to the average consumer is good news for small to medium-sized businesses – and credit unions in particular. We’ve reached a tipping point where AI tools and services are available to all industries, whether that means helping companies run more efficiently or providing customers quicker access to information. For credit unions, AI is a turnkey solution for some of the industry’s most prevalent pain points such as compliance requirements, loan growth, cybersecurity and membership growth.

Here are three ways credit unions can benefit from AI today:

Enhanced Member Understanding and Protection

Credit unions are typically much smaller than traditional banks, which allows them to offer a more intimate experience to members and focus on nurturing relationships through high-quality services. However, this smaller size has also historically made it harder to stay technologically competitive with the bigger financial institutions. And with Gallup reporting that “67% of Americans worry about hackers stealing their personal information,” it’s more important than ever for credit unions to stay ahead of the technological curve.

The need for constant, excellent member service must be balanced with the need to adhere to compliance requirements. According to a 2016 survey from CU Service Network, which surveyed credit union CEOs, 93% of respondents said the top critical issue facing their credit unions was meeting compliance requirements. Additionally, 80% of respondents said the cost associated with meeting requirements is too high.

Banks, and some credit unions, are beginning to utilize AI to lower the costs associated with compliance requirements while protecting customer data. Major banks are utilizing AI to more quickly identify possible fraudulent activity, simplifying a process that would normally take several man hours with traditional engineers and skilled laborers.

Implementing AI technologies is a scalable way for credit unions to not only remain competitive with larger financial institutions, but gain trust with their members through improved security, while saving on a number of costs associated with remaining compliant.

Increasing Revenue

Chatbots are a form of AI that credit unions can benefit from in a variety of ways. Chatbots are not a necessarily new technology, but they have been perfected since the introduction of the technology; in fact, chatbots are expected to deliver $8 billion in cost savings to businesses by 2022, according to Juniper Research. Benefits such as automating administrative workloads and mundane tasks will free employees to conduct work that directly impacts the success of a business – like interacting with customers or members. In fact, according to Autonomous, financial institutions can expect to reduce operating expenses by 22% by utilizing AI.

Chatbots can also play a critical internal sales role for credit unions. AI-powered loan origination software can book more loans due to the fact that the technology focuses on smaller loans that big banks overlook, leveling the playing field and ultimately increasing revenue. Through member-facing chatbots, credit unions can more quickly answer questions from potential borrowers and kick off the application process, leading to a quicker loan turnaround.

The ability to increase revenue while implementing cutting-edge technology for members and employees to engage with is a worthwhile consideration for credit unions that can only get better as the technology advances.

Instant, Exceptional Member Service

In today’s world where everything is at the tip of the consumer’s finger, with incredibly fast search results and information always available, customers have begun to expect equally fast results when interacting with companies – regardless of whether it’s in-person or online. According to research from Humley, “77% of users … would switch to a bank offering better service.” It’s clear that high-quality customer service cannot, and should not, be overlooked.

Big banks have already begun recognizing the higher quality of service that AI can facilitate. Bank of America recently launched its own chatbot to speed up customer interactions, and after only six months approximately 45% of its customers had used the bot at least once.

Humley also reported that 44% of customers would rather communicate with a chatbot … assuming it could answer their questions reliably. Consumers are increasingly warming to the idea of engaging with chatbots, proving now, more than ever, is the time for credit unions to embrace AI in their business model.

AI isn’t just for the big banks – this technology is something credit unions can benefit from, without needing to build expensive infrastructure or hire analyst teams to manage it. In its various forms, AI is an agile and affordable tool that can be personalized to fit the needs of members and employees. AI, including applications such as chatbots, is the great equalizer when it comes to credit unions competing against larger banks.

David Karandish is CEO of Jane.ai. He can be reached at 209-642-2074 or david@jane.ai.