This article was originally published on Credit Union Times.
Artificial intelligence (AI) is becoming the norm in both business infrastructure and consumers’ daily lives. AI is an intelligent and virtual resource that deploys data to replace and improve business functions previously completed by human capital. Artificial intelligence can be leveraged to expand business, lighten staff load, and enhance member experience.
The Federal Reserve has noted a steady trend of financial institutions closing physical branches. The pandemic only expedited this trend with 5% of all credit union branches closing during or since the pandemic. While physical branches aren’t dead, smart AI is enhancing members’ experience outside of the branch through mobile banking, call centers, and payment processing. The use of artificial intelligence is now part of a digital-first strategy for credit unions. While AI is rapidly becoming routine, some credit unions are slower to adapt and implement AI.
Slow adoption of artificial intelligence poses risk such as:
- Reduced member retention: While member loyalty is overall strong in the credit union industry, members may move their membership to another credit union, or even a bank or fintech, that matches their digital needs and provides a seamless experience for all their banking needs. Consumers, primarily younger generations, gravitate towards the personalized experience that AI can offer.
- Higher cost for staff training: AI can replace many routine tasks like depositing checks into a share or draft account or answering questions that members might call or chat in, such as, “What is my balance?” or “What is your routing number?” When these tasks continue to be completed by humans, continuous training is needed. Unlike staff, AI can be quickly programmed or re-programmed for efficiency.
- Drop in sales of products and services: Credit unions offer a variety of products and services to help members’ financial well-being as well as increase non-interest revenue. Yet members are often lacking awareness on which products and services best suit their needs. Lack of education and product knowledge can cause members to simply not seek out a product or service, causing a decrease in sales.
All these pain points result in more costs and an eroded member experience.
Read the full article here.
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