A Place For AI At The CU

Four themes to monitor in the ever-evolving technology landscape.

 
 

Technological innovation is changing the way consumers experience the world and creating tremendous opportunities (and challenges) in the financial services landscape by fundamentally changing how members interact with the credit union and one other. In this climate of constant change, how can credit unions leverage the latest technology to provide amazing products and services?

Credit union technologists and business leaders of all technical abilities traveled from across the country to San Diego for the Symitar Educational Conference (SEC) to find out. The event delved into the ever-evolving technology landscape surrounding the credit union industry, and sessions covered a range of topics, from loan growth to deposit acquisition, helping members achieve financial success to achieving greater operational efficiency. 

Despite the varied agenda, a few key themes emerged. 

No. 1: Artificial Intelligence 

“Artificial Intelligence” is a popular buzzword, one that is surrounded by misconceptions and challenges. According to conference speakers, too many organizations are substituting AI solutions for live employee interactions, creating a frustrating member customer. 

That’s unfortunate because AI offers the promise of frictionless experiences and the ability to help members find products and services when they need them. The key to using this technology, however, lies in the ability to use member for useful guidance and nudges rather than creepy ones. For more on that difference, read here.

But AI has applications beyond chat bots that direct callers to the correct department. 

“The age of AI is here,” says Nicole Harper, senior strategic initiatives analyst at Jack Henry & Associates. “While we’re not all AI developers, we all must be AI aware. AI takes work and requires humans in the loop. AI’s ability to outperform humans and minimize mundane tasks to maximize meaningful work is significant and can’t be ignored. Future-ready credit unions will initially invest in AI to augment, not replace, staff and embed AI to modernize existing member-facing and back-office processes.”

No. 2: The Evolution Of Digital Banking 

Mobile and online banking are no longer two separate services. Members today expect full functionality across all platforms and view each one as a combined, collective digital experience. Gone are the days when members had to move from mobile to a web page (or branch) to do something like open an account or apply for a loan.  

Demand is now shifting toward a Gen 3 environment in which all platforms and devises are seamlessly integrated into a consistent experience. 

“There is no longer a distinction between online and mobile — it’s just digital,” says Ted Bilke, vice president of Jack Henry & Associates and president of Symitar. “Even in a world where digital interactions dominate, people still desire meaning and connection in those exchanges. Credit unions that can maintain their authenticity — and translate intentional, personal service — through their digital channel will effectively capture future generations of members who trust their credit union to care for all their financial needs.”

Like it or not, companies like Amazon, Apple, and Google are setting the standard by which members measure their credit union’s digital solutions. The movement is already serving members who grew up with smartphones and have never known a world without the internet. How credit unions adapt their products and service will determine their success in the coming years.

No. 3: Peer-To-Peer Payment Technology 

As the popularity of easy-to-use, peer-to-peer payment technologies grows, credit unions are losing out on the opportunity to retain deposits. 

“It is our obligation to keep community financial institutions at the center of payments,” says Greg Adelson, vice president of Jack Henry & Associates and general manager of JHA Payment Solutions. “As new P2P solutions are launched and real-time payments become standard, credit unions must have a strategy to support their members’ payment preferences or risk losing that member to a financial institution that will accommodate.”

Members want a simple way to exchange funds on the go, and companies like Venmo are making a lot of money off the cash they hold — cash that traditionally was deposited with their financial institution. Members will find a convenient way to make payments. With the right tools in its digital arsenal, that cash could remain with the credit union.

No. 4: Non-Bank, Non-Traditional Alternatives

Big companies like Apple are starting to brand themselves as an alternative to banks and have stated as much in recent commercials. They are leveraging advanced technologies to maximum efficiency and creating a streamlined experience for customers.   

But credit unions have one advantage over these companies: a personal connection with members. 

“Credit unions are central to their communities,” Bilke says. “Those that can react to various market pressures with technology centered around open, digital strategies — with the right balance of personalization and self-service — will continue to grow membership, maintain a competitive standing and build a trusted, distinguishable brand to individuals and businesses for the long term.”

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Oct. 28, 2019


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