Making the Difference With AI

The proliferation of competition in the credit union industry creates a challenging environment for credit union leaders to showcase what makes their credit union unique from others. Simply offering a digital experience is not enough, as nearly every credit union has some kind of online and mobile banking capability today. Credit union leaders must go a step further and find a true strategic differentiator. This can be found via artificial intelligence.

Putting Data to Work

Credit unions possess a large volume of mostly underutilized member data. Incorporating AI and machine learning into the credit union enables this data to begin adding value to the member and create meaningful and memorable experiences. AI identifies patterns in each member’s data and uses these patterns to create a personalized experience unique to each individual member.

For example, a member may pay a particular bill around a certain time of month. AI will learn this behavior and begin to proactively alert, or remind, members in advance of the pending bill.

Providing Solutions, Not Problems

AI extends beyond proactive alerts and adds value by assisting members as they strive to better manage their financial wellness. AI possesses the ability to forecast upcoming bills and compare it to the account’s balance, so, if needed, the member can move their money between accounts to ensure the payment is covered or can identify when members are paying more than they may need to be for a specific bill and help them lower it.

Sending proactive alerts can be valuable to members and ease the stress of managing bills and payments, however, making these alerts actionable is another key differentiator. Unlike mere alerts, AI brings a call to action. It is able to move the conversation from the standard “You are paying too much for this service,” which beckons a “What’s next?” to, “Do you want us to lower your bill for you?” That creates a superior member experience and demonstrates to the member that they are top-of-mind for the credit union.

Preferences Are Changing

These kinds of personalized, actionable experiences are appearing frequently in the consumer technology industry. Leading tech companies such as Amazon and Google – and even social media platforms – thrive on the level of personalization they are able to provide. For example, Amazon recognizes your shopping patterns, knows your preferences and makes tailored recommendations based on that information. Amazon also provides actionable alerts, making it easy for customers to repurchase products they buy frequently.

The challenge is not only that these experiences exist beyond the financial services industry, but more so that consumers are growing accustomed to these experiences and expect them across all areas of their lives – including financial services. According to BCG’s 2020 Retail Banking Advisory survey, 37% of respondents want their financial institution to be more like Amazon and 29% of respondents want their financial institution to be like a personal shopper.

Members are drawn to credit unions because they feel seen and understood by them. They appreciate their credit union because of the individual relationship formed between members and credit union staffers, which is not always the same in larger financial institutions. Personalization is, and will remain, vital for credit unions to demonstrate the depth to which they know and understand their members.

“[Financial institutions] are looking for new ways to differentiate themselves from one another since many offer many of the same products and services without a significant difference in fees and rates. They also see specialization as a way to set themselves apart,” the 2021 Bankers as Buyers Report from the William Mills Agency noted.

A true digital, yet personal, member experience will set leaders in the credit union industry apart. This new member experience will also become critical to begin fostering unique and valuable payment experiences. As with other industries, member experience is the key to stronger and lasting member relationships.

If members are unhappy with their service or do not feel valued, there is no shortage of options for them to take their business elsewhere. Credit unions thrive on a mutually beneficial relationship with members and adding the benefits of AI into the mix helps build a strong bond and ongoing loyalty.

Kavita Singh is Vice President of Artificial Intelligence Product Management at Payrailz, a digital payments company based in Glastonbury, Conn.