Looking Ahead to AI in the Credit Union Environment

By: René Clayton, Innovation Strategist, PSCU

Artificial Intelligence (AI) continues to infiltrate the financial world. I recently attended the 2019 BankAI conference, hosted by American Banker, which explored how AI is being deployed in banking today with efforts such as talent reskilling, ethics and data management. Speakers included leaders from Bank of America, Harvard, U.S. Bank and Javelin.

Jason Peach, president and CEO of West Community Credit Union, a PSCU Owner credit union, also attended the conference and said it presented great insight into how technology investment, specifically with AI, is being applied within many of the larger financial institutions (FIs).

“One of the key takeaways was to ensure that our business needs are considered first, and early on, when determining which AI technology investments to make,” Peach commented. “Additionally, it became clear that AI, in many cases, will not fully replace our human workforce, but adapt how we use our workforce to best leverage the AI solutions we deploy. This is an area credit unions should watch and begin to take action on from a strategic perspective, especially in recognizing the sheer financial resources being committed to it by the largest institutions.”

Throughout the conference, several trends began to emerge. Here are some key takeaways and highlights from my conference experience.

Responsible AI

Many of the speakers focused on ethics relating to the creation of responsible AI. Their advice on preparing for this is knowing your company’s available data and realizing the potential consequences of AI from all vantage points. Knowing your data inside and out, as well as ensuring a lack of bias, will be essential to the success of your AI project.

Online self-service has led to less human engagement at branches. Therefore, it is imperative to build consumer relationships in a digital-first world. So how do you build consumer trust with a digital experience? At the outset, know deeply what your members need and want. Moreover, meet your users’ needs first and ensure you have rigorous governance around AI.

A governance committee is necessary for the oversight of AI models. Determine the value of AI for your business in an open discussion among your leaders, ensuring its explainability and transparency, and involve the right subject matter experts on your governance team. By doing this upfront, it will assist in the buildout of use cases and models in a responsible and governed manner.

Preparing Your Workforce

While there are misconceptions of AI causing “doomsday” scenarios of human jobs going away, how we work with machines will certainly change the nature of our jobs. Specific processes and tasks will be augmented, so it is essential to prepare your employees for what roles and skills will be in demand, as well as to tailor learning to your employees’ strengths. To be a forward-thinking FI, it will be useful to provide upskill training for your staff.

Preparing your credit union to facilitate human and machine interactions, automating products and designing processes and business models to support users’ needs will help ease the integration of intelligent technologies. While the workforce may become AI-driven, it will still be human-refined.

One of the top recommendations from the conference leaders was to purposefully create a diverse team to lead AI efforts. Workers from diverse backgrounds with different talents, skills and experiences will always give companies a competitive edge, and fostering a culture of continuous learning and collaboration will unveil success. For example, U.S. Bank has created “experience studios” for small teams to learn from each other in a co-located workspace, empowering employees to make decisions with light governance.

Challenges to AI Adoption in FIs

Global AI spend is expected to hit $35.8 billion this year, up 44% over last year, according to International Data Corp. Investment is quickly accelerating in these technological advancements that are solving problems and completing complex human tasks with higher speed and scale.

Common challenges that are hindering the adoption of AI include lack of clarity about its problems and limitations, reliance on large volumes of unstructured data, the perception of AI as a mystifying “black box,” and use cases that have not been well defined.

To overcome these hurdles, the data sets you use in your AI projects need to be carefully curated, and it is crucial to determine what factors and analyses can help you generate an accurate machine learning hypothesis. Furthermore, do not let your AI project become “top secret” or operate in a silo as that can cause confusion in your company.

Final Thoughts

As a whole, businesses are still in the early stages of AI adoption. Now is the time to lay a solid foundation of ethical standards and governance framework, while establishing a blueprint for your workforce. When implementing your AI plan, it is vital to do the groundwork and set the right expectations and proper planning from the get-go.

In opening the BankAI conference, Penny Crosman, editor-at-large at American Banker, said, “At this year’s BankAI, practitioners and business leaders will share how they’re deploying AI in the real world and overcoming the hurdles that crop up.” Many of the presenters reinforced that AI technology does not provide all of the answers. It’s the people, processes and technology together that can resolve issues and implement successful, innovative solutions for your financial institution.

René is an advocate for expanding on new ways of creating amazing digital experiences and provides a strategic vision for multiple solutions across PSCU’s organization. She is driven to help PSCU bring their digital strategy to fruition. Her background expands over 18 years of experience in technology and product development.