BOULDER CITY, Nev. — Credit unions looking to artificial intelligence to drive growth should resist starting with the technology itself and instead determine which member and business problems they need to solve, according to two industry executives who said AI could provide particular opportunities for attracting younger consumers and improving operating efficiency.
Samantha Paxson, founder and chief growth officer with Acumen Financial, and Kenny Stivers, general manager with GenAspire, discussed the issue during “The AI Imperative: AI for Strategy: Positioning Credit Unions for Growth,” the fourth installment of a seven-part webinar series hosted by The CU Daily and Mitchell Stankovic and Associates.
Paxson said AI strategy should begin with an honest assessment of the organization rather than being assigned primarily to the chief technology or information officer.
“It needs to start with what business problem are we trying to solve?” Paxson said.
Credit unions should examine the member journey they want to improve and then determine which technologies can help accomplish that goal, she said.
CEOs Don’t Need to Be AI Experts
Stivers said credit union CEOs shouldn’t attempt to become AI experts because the technology is evolving too rapidly. Instead, they need to define organizational goals and create teams capable of evaluating how AI can help achieve them.
He recommended forming internal committees whose members can learn about AI and evaluate potential applications.
“AI is a tool that needs to be mastered,” Stivers said.
Paxson said credit unions also need an internal “point guard” capable of coordinating AI initiatives across departments.
She said about 65% of large credit unions she has worked with have AI in practice in some form, but many haven’t successfully implemented it across the enterprise, creating a strategy-execution gap.
The opportunity, Paxson said, is to “rewire” how work gets done rather than simply layer new technology onto existing processes.
Savings Already Being Demonstrated
Paxson pointed to Citadel Credit Union’s deployment of Posh AI in its contact center as an example of measurable results.
She said the system has handled 1.5 million calls and 2 million chats, while Citadel identified $663,000 in annual savings and a 63% reduction in cost to serve.
Stivers said some of AI’s most valuable applications aren’t necessarily the most attention-grabbing.
“The most profitable payoff has been in the most unglamorous cases,” he said.
Those include fraud detection, anti-money-laundering monitoring and document and data extraction.
AI can also eliminate repetitive employee tasks, allowing staff to focus on work more closely connected to the credit union’s mission, Stivers said.
“This shouldn’t be replacing jobs,” he said.
Younger Members Present Growth Opportunity
Both speakers said AI could become particularly important in helping credit unions reverse their longstanding difficulty attracting younger members.
Stivers said the average credit union member is roughly 15 years older than the average American, while younger consumers increasingly expect technology-driven financial experiences.
GenAspire operates a white-label teen and young-adult banking platform for credit unions. Stivers said the company uses AI to help engage younger consumers with personalized financial insights.
Paxson said credit unions need to stop beginning with individual products and instead design around an entire member journey.
AI can help identify market segments, recommend the next appropriate product and determine how services should fit together, she said.
“What are the humans trying to do in their financial life?” Paxson said. “Do we have product-market fit right now?”
Credit Unions Have Advantages
Despite the enormous technology budgets of the largest banks, Stivers said credit unions possess two potential advantages: authenticity and agility.
Younger consumers can quickly recognize inauthentic marketing, he said, while credit unions can potentially move faster than large institutions if they choose to do so.
Technology also doesn’t eliminate the need for personal relationships.
Stivers cited research indicating 74% of Gen Alpha wants human interaction and engagement more than the three generations preceding it.
Paxson said successfully combining that human connection with technology represents the industry’s opportunity.
Five years from now, she said, the institutions thriving with AI will view it as part of their overall operating strategy rather than simply another technology expense.
“It’s a system design spend, not a technology spend,” Paxson said.
Stivers said another traditional credit union strength could also prove important: cooperation. Unlike large banks that primarily compete with one another, credit unions can share experiences and lessons as they adopt AI.
For more info on the AI Imperative series, go here.
