AI – What Leaders Need to Know Now

By: René Clayton, Innovation Strategist

As an enthusiastic technologist who has watched our digital world transform before our eyes numerous times in the last decade, I am always excited by the next wave of innovation that has the potential to change the way we will interact and transact with payments. Leaders will want to stay engaged and on top of emerging technology more than ever.

What is Artificial intelligence (AI) and why is it important now? This technology has abundant potential. It uses computing power and knowledge to simulate human behavior and is beginning to become a huge part of our world, due in large part to the prevalent use of mobile devices. The most significant development to have changed the game for AI in recent years is vast improvements in computational processing power and access to large quantities of data.

The capabilities of artificial intelligence are immense. There are three primary capabilities that allow AI to be useful in today’s ever-changing landscape:

  1. Natural language processing – this functionality allows information presented by people in a text or voice format to be understood by machines.
  2. Machine learning – this enables computers to recall repeated historical experiences and perform past actions in a controlled, supervised manner.
  3. Knowledge-based – these are systems that use domain information to make automated decisions, simulating intelligent behavior.

Over the last year, financial services leaders have been discussing the use of artificial intelligence to streamline processes and to provide value in all areas of their organizations. It is important to remember, however, that AI is still in its infancy, and proper due diligence needs to happen before you deploy it into your environment.

A few highlights for leaders’ consideration:

  1. Ensure key teams understand how machine learning can be used to improve business outcomes.
  2. Identify and prioritize key use cases for initial experiments.
  3. Embrace the notion that intelligent systems will matter to your credit union.
  4. Factor AI technologies into your strategy planning sessions.

AI provides robust value for credit unions through the capabilities it offers. For example, it can reduce the margin for error typically seen in manual processes, and it can function at much higher speeds than a human representative can. For a highly regulated field like banking and payments processing, AI must reliably prove that its decision process falls under the regulatory framework and that it does not cause operational decisions that result in legal implications and fines. The more that this occurs, the more the processes will be transparent enough to explain why the AI made the decisions it did.

Another important area for AI is payments. The payments ecosystem is rapidly evolving, driven by digital transformation and emerging technologies across all industries, real-time payments, and payments from devices. It is becoming clear that digital commerce has stretched beyond mobile. As the Internet of Things (IoT) continues to grow and customers become connected at every level, the ability to pay anywhere / anytime is becoming ubiquitous. An example would include ordering an item from Amazon’s Alexa and having the credit union card automatically set up as a payment method. Artificial intelligence will accelerate this reality, using the power of machines to streamline payments at every level.

Leaders evaluating AI for their operations should be looking for proof of capability, as well as the concrete, valuable and measurable benefits it could provide to their organization. Accordingly, AI can also be a powerful element of a payment strategy, while helping to scale personalization in payments via machine-learning-based predictive analytics. An example might include the ability to make a payment via social media messaging, without ever leaving the platform. Another illustration includes AI bots, which might allow for payments in a basic text message. By deploying AI in tandem with payment processing, it has the potential to solve many common issues seen in the credit union industry today.

If you are wondering where to start your AI journey, we suggest virtual assistants (VA) or chatbots. By offering these AI technologies to your employees or members, it can brand you as the “always on” banking provider that consumers now expect. As a bonus, chatbots can be developed rather quickly (much less time than it would take to develop a mobile application). Virtual assistants are being deployed in the customer service areas to help augment the agent’s talent and knowledge. The chatbots or VAs can interpret commands and intentions, and predict the “next best action” for the representatives or members. They can perform their duties by learning from historical data from the credit union, and they become better over time.

The way to maximize your investment is to apply AI to automate time-consuming manual operations, enabling better user experiences, and reporting on the insights that AI provides. Although AI-related technology is at varying stages of maturity, getting an early start on the exploration of these advancements will not only increase your competitive advantage, it will allow these intelligent systems the adequate time they need to “learn” from the available data. There is no doubt that AI will play an important role in your credit union’s digital strategy, and subsequently, your future success.