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These days, one can’t get away from the constant chatter regarding AI. It is used by businesses, search engines and even students to make communication easier. If one uses Google search and asks, “Why use AI?”, the response – which coincidentally was generated by AI) – will say that AI can be used to automate tasks, improve decision-making and create more personalized experiences. For businesses, it can help them become more efficient and save money.
But if AI is so great, why isn’t every credit union using it? The answer is most likely two-fold – either a lack of understanding of the potential of AI or a resistance to change within the organization. Or it is likely because of a “wait and see” approach to tangible evidence of success in using an emerging technology like AI. For those who haven’t started to use AI within the credit union, the quote from Alexander Pope may soon ring true, “Be not the first by whom the new is tried, nor the last to lay the old aside.” Simply put, credit unions need to recognize that AI is here to stay and that foregoing a possible member benefit and money-saver would be a mistake. We can’t be the last to lay the old aside.
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Enhancing Member Service Through AI
Credit unions have always prioritized member service. Many credit unions currently employ a member relations staff member whose job it is to ensure that a member of the credit union has an enjoyable experience.This can include opening an account, applying for a loan or solving a problem that may have arisen. AI can assist in all of these issues – chatbots will automate many of them.
With only 25% of credit unions adopting AI, there is room for improvement. But how do these credit unions that are “the last to lay the old aside” see the benefits of this new technology?That answer is not simple, but I hope that columns such as this one will shine the light that these credit unions can follow.
For those that have not yet integrated AI into the credit union’s operations, let’s look at the initial benefits:
- Improved member service: AI-powered chatbots and virtual assistants can provide 24/7 support, ensuring that members get quick responses to inquiries, from checking account balances to applying for loans, without waiting in long queues.
- Enhanced operational efficiency and cost savings: Automating routine tasks like data entry and compliance checks allows credit unions to reduce overhead costs while enabling staff to focus on more complex, high-value interactions.
- Better risk management and fraud prevention: AI algorithms can analyze transaction patterns in real-time, flagging suspicious activities and helping credit unions prevent fraud before it occurs, ensuring members’ funds remain secure.
Addressing Common Concerns
Your credit union may have these concerns. Let me answer them for you:
- Initial costs and resource allocation: While implementing AI requires an upfront investment, the long-term savings from improved efficiency, reduced fraud and better decision-making far outweigh the costs. Many AI solutions are also scalable, allowing credit unions to start small and expand as needed.
- Data privacy and security concerns: AI systems are designed with robust security measures, including encryption, multi-factor authentication and continuous monitoring, ensuring that member data remains protected and compliant with regulatory standards.
- Resistance to change at the credit union: Change can be daunting, but the key is education and training. Helping employees understand how AI complements their work rather than replaces it can ease the transition and lead to higher adoption rates.
The Road Ahead
Not only can AI be of assistance now, but it also can be part of your future plans and strategies. Using AI can help the credit union establish a clear vision and a concrete set of goals that can become part of the strategic plan. It can also provide a roadmap for future projects and initiatives.
The transformative potential for AI is almost unlimited. Some financial institutions have used AI to personalize member recommendations based on financial behavior, helping members make informed financial decisions. Others have found success with automated underwriting and loan approval processes, reducing wait times and improving accessibility for borrowers.
Again, sometimes what we don’t know or don’t do is more harmful than things that we do. AI has become an integral part of business, especially financial services. Should you have any concerns, please feel free to contact me or any other professional who is proficient with AI. For those too old to remember the Memorex recording tape commercial, it famously asked, “Is it live or is it Memorex?” That is already the question with AI – it is that good.
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