The Transformative Power of Generative AI for Credit Unions

We’re still in the early days of generative AI, but those of us who embrace it now will be well-positioned for tremendous leaps in innovation and growth. Just like the internet faced initial skepticism around potential perils, generative AI is sparking some well-founded concerns. However, the GDP growth unlocked by pioneering the internet showcases the immense opportunities AI presents. We will find ways to overcome the challenges.

Bridging the Front Office-Back Office Divide

One key challenge generative AI can help solve is the back-office versus front-office tension that plagues many credit unions. Typically, frontline staff like branch and contact center employees are younger and less seasoned than the more tenured back-office (technical support) personnel. When members ask complex questions, the frontline staff often need to loop in the back office, creating friction and frustration for a generation accustomed to instant gratification. Generative AI offers a powerful solution by empowering frontline teams with access to the collective institutional knowledge, enabling them to quickly find answers without having to escalate basic inquiries.

Deploying Generative AI for Institutional Knowledge

One pioneering credit union – Magnifi Financial ($2.3 billion, Melrose, Minn.) – exemplifies how generative AI can be deployed to elevate member experiences. They took over 1,000 Magnifi policy and procedure documents and fed them into a generative AI system.

Now, Magnifi’s team can query the AI and receive accurate, relevant answers pulled directly from those source materials. The AI doesn’t hallucinate or make up information – it surfaces verbatim excerpts with precise document/paragraph attributions. Users can validate the responses against the original sources.

But here’s where it gets powerful: Magnifi employees can provide feedback, rating the AI’s outputs to further fine-tune its suggestions over time through machine learning. The generative model continues improving, consolidating Magnifi’s vast institutional knowledge into an always-accessible brain trust.

“We’re confident that by providing our staff with immediate answers to their questions directly leads to an improved member interaction,” Magnifi Financial SVP of IT and Digital Brad Shafton said. “The ability to drive first call resolution and onboard employees faster will also have a profound impact on our employee experience, which drives our member experience.”

Driving Efficiency Through Automation

For credit unions, capitalizing on generative AI transcends enhancing member service – it’s an existential necessity for doing more with less. Fee income faces mounting pressures, yet service standards must remain high. AI enables automating repetitive tasks so employees can focus on higher-value work.

Employee onboarding is one pivotal area where generative AI creates immense efficiencies by instantly answering new hires’ questions using the latest policies and best practices. Employees become productive faster, driving down operational costs.

Capturing the Voice of the Member

Looking ahead, it will be exciting to watch generative AI fully empower credit unions to understand members’ needs and expectations better than ever before. Imagine recording all member conversations – from calls to video chats – then using AI to transcribe, summarize and analyze the voice of the member in real-time.

With a direct pulse on members’ experiences and inquiries, executives gain powerful insights to rapidly iterate on products, services and messaging. Credit unions become hyper-responsive, deepening relationships by proactively addressing evolving demands.

The possibilities are limitless when we see generative AI’s potential through members’ and employees’ eyes. A future of doing more in less time with fewer resources – that’s the transformative promise of this pivotal technology.

Ashish Garg is Co-founder and CEO of the Milpitas, Calif.-based Eltropy, a digital conversations platform provider serving community financial institutions.