Credit unions are increasingly turning to data analytics and artificial intelligence (AI) to better understand and serve their members. By leveraging these technologies, credit unions can create personalized experiences, anticipate member needs, and offer relevant products and services that enhance engagement and satisfaction.
One of the key factors in successfully implementing data analytics and AI is the organization and utilization of member data. As Ben Maxim, CEO at Rosita Group, explained during a recent interview with America's Credit Unions, "A lot of credit unions have a lot of their own data, but (may) only have 300,000 members. If you compare (them) to a Chase who has millions of customers, (Chase is) going to have a richer data set from their own data than one single credit union has."
How to improve financial projections
To overcome this challenge, credit unions are collaborating with fintech companies that can provide access to larger data sets and help train AI models for better predictions and recommendations.
Transactional data plays a crucial role in understanding member behavior and offering relevant products and services. By analyzing spending patterns, credit unions can gain valuable insights into their members' financial needs and preferences. This information can be used to create targeted offers, such as debt consolidation loans for members with multiple credit balances or personalized rewards based on shopping behavior.
Paying attention to trends around the world and how they can be implemented at home is another opportunity credit unions can benefit from. Brian Scott spoke with America’s Credit Unions during GAC about getting a world view of fintech.
“More people in Kenya have a mobile phone than in the U.S. And they’re using their phones for financial services. One click you can get a loan. They have low default rates because they’re using all the data that comes from the phone to be able to make those loans,” Scott said, offering an example of where the industry can learn from other countries.
Credit unions must strive to integrate various fintech solutions into a cohesive platform, often within their existing digital banking channels, to provide a unified and intuitive experience for members.
Generative AI isn’t just a trend
The growth of AI over just the past year is impossible to ignore. While it should still be used with caution and the information coming out of it should still be reviewed carefully by human eyes, there is no escaping, this can be an asset and assistant.
According to Kate O’Neill, author and founder of KO Insights, a technology and strategy firm, the key to AI is “strategic optimism”, combined with data analysis to make decisions, remain nimble, and meet people where they are.
The use of data analytics and AI in the credit union industry is not without its challenges. Privacy concerns and regulatory compliance must be carefully considered when handling member data. Additionally, credit unions must invest in the necessary infrastructure and talent to effectively implement and manage these technologies.
Despite these challenges, the potential benefits of data analytics and AI for credit unions are significant. By harnessing the power of these technologies, credit unions can gain a deeper understanding of their members, offer personalized solutions, and ultimately enhance engagement and satisfaction. As the financial landscape continues to evolve, credit unions that embrace data analytics and AI will be well-positioned to compete and thrive in the future.
Credit union professionals can stay on top of the latest in member experience by attending Operations & Member Experience Council and Technology Council Conference, October 6-9, 2024, in Anaheim, CA.