LAS VEGAS–The CEOs of two credit unions who were asked why they bought a bank and an AI company, respectively, have explained how they made their decisions.
The questions were posed during Mitchell Stankovic’s Underground Collision meeting here. The question about a bank acquisition was directed to Thayne Shaffer, CEO of America First Credit Union in Utah, while the question of why buy an AI firm was directed at Beverly Anderson, CEO of Seattle-based BECU.
In America First’s case, it is in the process of buying Meadows Bank in Las Vegas, which is a commercial lender with six retail branches.
Getting the Same Calls
“I am sure my colleagues get the same calls I do about wanting me to buy a bank someplace,” said Shaffer. “We sat down with our executive group about why we would ever do that. We did it as part of a strategic planning process. We defined what would be a reason for us (to acquire a bank), and it helped us filter the calls. None took off until we had a chance to meet with the management team of Meadows Bank. We had a very productive first meeting. In that first meeting, because we had gone through the diligence, I saw there was a real opportunity there, and I think their leadership did, too.”
Similar Operation
Shaffer said Meadows Bank runs a similar operation to its own, and that the credit union had also identified that about 200,000 of its members were running small businesses of some type.
“We want to provide quality services for their business needs, as well,” he said. “We already had a great lending program and SBA program, but it was an opportunity to augment services for that segment of our membership and meet their needs.”
Shaffer said the bank’s underwriting standards were also similar to the America First’s. “The item that became a big motivation was their talent and their team with great leadership that had existing relationships in an area we were struggling to build a team,” said Shaffer. “Their culture was very similar, which is one of the biggest challenges. We saw the opportunity to buy it rather than build it.”
The application to buy the bank is still before regulators.
Buying an AI Company
As the CU Daily reported here, in July BECU announced it had acquired EarnUp, a fintech that provides financial tools aimed at helping people improve financial well-being, along with the firm’s generative AI capabilities.
It has brought on board the company’s 13 employees as it builds out its AI-based offerings, including EarnUp’s former CEO and co-founder, Nadim Homsany, who is now SVP of AI strategy and innovation with BECU.
BECU CEO Beverly Anderson said the credit union was already thinking about AI when she was at Harvard Business School earlier this year and heard a professor remark that “if you are not already focusing on AI you are probably behind.”
“I thought about the strategic plan we had just adopted, and we didn’t say a lot about AI. We had LLMs and machine learning, and we were doing some partnership work with EarnUp,” Anderson explained. “They had launched an AI team and were thinking about financial inclusion and health. The fintech was starting to get nibbles about an acquisition. We thought this is the time to make a bold move and grab a team already working with us that is very much culturally aligned.”
Finding Scale
Anderson said that while BECU’s employees are helping members every day, it is not something that can be scaled.
“There has to be a scalable way to deliver that financial journey, and we think the way to do that is through a generative AI financial advisor in the same way our employees do every day in person,” said Anderson.
Anderson acknowledged the team was initially leery about losing their jobs to AI, but discussions around all the ways AI can help them to do their jobs better by removing what the credit union calls “no joy” tasks from their plates have effectively addressed those worries.
The Need for Better Data
“The team is now focused on productivity and efficiency,” Anderson said. “We just launched a pilot in generative AI. In some ways the advice is really good; in other ways the information is not good enough. One thing we’re learning is the data the generative AI models need to give you back useful information.”
