In recent years, the financial services industry has been spearheading innovation with fintechs, digital banks, and other tech solutions — the sector consistently ranks at the top of VC investment. However, the case hasn’t been the same for financial institutions like credit unions, which usually thrive on in-person interactions with their members and running traditional operations.
But how can credit unions compete with startups and large banks whose bread and butter is operational and customer service innovation? This is where AI is showing great promise for smaller financial institutions.
The World Economic Forum recently highlighted the role of AI agents in the financial services sector to propel autonomy, efficiency, and inclusion. These AI protocols are here to stay, enabling workflow automation like document intake and verification, less human error, and improved customer service options for users. This is nothing new for major banks that have invested countless resources to streamline their operations over the years, but not all small banks and credit unions could say the same.
It’s time financial institutions kept up — all without breaking the bank. The proliferation of AI-powered solutions has made it so any organization willing to modernize can do so at scale and without draining its capital on these sophisticated solutions.
Improving Operational Efficiency
Think about the amount of time credit union staff takes to send, receive, and verify required documents for any customer procedure — opening a new account, requesting loans, and doing inheritance transfers, among many others. Our internal studies show us AI and technology can help reduce the inheritance transfer process from months to only a few weeks. AI agents are helping reduce intensive hours spent on these repetitive administrative tasks to improve operational efficiency and also free up staff availability.
These AI agents can be trained on any material, from market trends and interest rates to demographic data and account information. They can also collect data directly from the source, relieving humans from routine procedures like corroborating information and asking for additional documentation when necessary.
As such, these tools bring unmatched accuracy and speed to demanding tasks that require maximum dedication over extended periods of time.
Adopting Specialized Protocols
When hiring AI vendors or undertaking AI adoption in-house, credit unions can make these AI agents as specialized and at scale as they wish, depending on the protocols they set. And, because accuracy and speed are their strong suits, training them to focus on highly specific tasks is a major win for bank employees.
In the same way frontline workers, phone representatives, bank tellers, and other credit union staff are experts at their jobs, you can also train specialized AI agents. For example, not everyone might know what a legitimate death certificate from a specific US state looks like for an inheritance transfer procedure. However, an AI agent trained to rigorously verify and analyze state-by-state inheritance regulations, plus other required paperwork, can do this job with more speed and accuracy than anyone else.
As such, they become a major relief for financial institutions, allowing employees to carry out more critical tasks while AI agents take over routine yet demanding activities with precision.
The World Economic Forum cites “autonomy” as one of AI agents’ most important features — this can be as true as financial institutions desire. For tasks like document verification, organizations can choose to give these specialized protocols as much freedom or supervision as they deem necessary to make decisions, including deciding when to contact members with next steps, answering their questions, communicating about missing information, and more.
Excelling Customer Service Experiences
People prefer credit unions for their social impact, local focus, and personable touch. The latter is what influences many to stay at these institutions rather than do business with larger banks. McKinsey touched on this point, saying that one of the six imperatives to maintain the future of credit unions is using AI to improve the member experience.
This doesn’t mean fully automating communications or heavily relying on AI-generated messages. Instead, AI can help bank staff in two ways: it can understand member context, and allow for more time to directly connect with them.
Let’s say an employee is fairly new and is assigned to a long-time credit union member. AI can help summarize years of data points like past requests, member referrals, bank visits, calls, feedback, and any information relevant to that member’s experience. That way, they feel as though their previous representative never left, emphasizing the importance of human connection to keep members satisfied. Otherwise, catching up on assigned members would’ve taken the new employee several hours of reading notes, browsing documents, and exploring member profiles.
Secondly, AI can overtake bureaucratic tasks like legal checks and compliance processes so bank staff can spend more time on either very critical customer service duties or simply bonding with members. Let’s go back to the inheritance transfer example. While AI takes over document verification of the deceased and inheritor, staff can dedicate calls and bank visits to listen to those grieving, give them the space they need with loved ones, and even send thoughtful gifts on behalf of the credit union.
By allocating mundane tasks to AI agents, credit union staff can go back to basics by placing their attention back on members.
Becoming Competitive Without Breaking the Bank
The prospect of AI agents used to be reserved for the megabanks that could spare some change in expensive cutting-edge technology. Now, AI is accessible enough that any financial institution with the drive to improve its offering with emerging tech can do so affordably. The many startups developing AI-powered services for the financial services industry are bridging the gap between large banks and local credit unions by servicing them at a fraction of the cost.
What’s also important is that this technology is becoming more digestible, offering AI “as-a-Service” on a managed basis that ultimately democratizes access across the sector. Experts build and tailor their services for financial institutions, working together to train models exactly like they need them. Ten years ago, this was only a dream smaller players could aspire to.
Leveling the playing field means members don’t have to sacrifice modernity for that local feel, which gives credit unions the competitive edge they’ve been looking for to stay current as fast-paced innovations take over the industry.
Credit unions currently have a massive opportunity to improve their internal processes with modern and digital approaches without sacrificing the human connection they’re known and preferred for. Computational power has grown to the extent that AI can support several tasks without being intrusive or disrupting work. Instead, it’s giving financial institutions the relief and extra push they need to stay relevant and competitive in a market that is evolving at light speed.
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