The AI Advantage

It wasn’t too long ago that artificial intelligence seemed like technology of the distant future. AI was for science fiction tales and movies set in the next millennium. But now AI is everywhere—even at your local credit union. And that’s a good thing for credit unions and their members. That’s because AI can drive growth, improve the employee experience and enhance member service.

“AI has strong use cases for driving operational efficiencies and expanding access to financial services,” says Ranjeev Kumar, SVP/product development for CUESolutions provider Origence, Irvine, California. “Credit unions are quickly seeing the impact of AI on lending with increased loan volume and enhanced borrower experiences.” 

That’s just the tip of the iceberg. AI can be tapped by credit unions for many benefits. Kumar breaks down a few options. 

Boost Lending: AI can enhance lending practices by enabling CUs to process loans more quickly and accurately. “CUs can make more precise lending decisions through AI-powered analytics, accelerating funding times and reducing operational expenses,” Kumar says. “AI-automated underwriting technology allows CUs to tailor specific products and validate customizations against their performance data. It opens the doors to confidently lend throughout the credit spectrum and underwrite thin files.”

Kumar believes that using AI to provide more access to credit for everyone is in line with the CU philosophy. “Alternative data can be used to better evaluate middle-tier borrowers and determine fair pricing, making credit more available while reducing potential biases and helping credit unions follow more equitable lending practices.”

There are benefits for employees too, as AI helps improve efficiency and lower human error. It can verify documents like consumer credit and auto loan applications, which can often be a tedious and lengthy part of the lending process. “This gives employees time to help members who may need assistance that involves personal interaction,” Kumar adds.

Prevent Fraud: As fraud becomes an even bigger threat, AI can help mitigate the risk. “AI can combat fraud by evaluating large amounts of documents and data with greater accuracy,” Kumar says. “For example, it can easily compare paystubs and pay statements against a database of known fraudulent documents.”

Improve Service: There are many ways AI can be strategically used to boost loan service across the board. “AI solutions can be an ally to help reduce manual reviews, which allows for faster decisions and eliminates burdensome waiting periods. This enables employees to focus on high-value tasks and manage volume spikes while increasing general productivity. AI can also allow employees to catch errors and address them quickly to keep the process moving and serve members more confidently.”

Though it’s natural to be concerned that incorporating AI can diminish the value of human interaction, Kumar believes that isn’t the case at all. “Instead, it enriches the service landscape by freeing up human resources to focus on what matters most: building relationships, offering personalized advice and providing financial guidance and advice throughout the life cycle of the loan.”

Connect With Gen Z: These days there’s no member demographic more desired than Gen Z; however, connecting with this crowd can be tough. But AI can meet them where they are. “Today’s members, including Gen Z, expect modern lending experiences,” Kumar says. “This means credit unions need to offer a digital lending experience that includes faster decisions and funding. Gen Z wants quick and convenient loans without having to visit a branch or fill out a lot of paperwork. Credit unions that provide this experience can keep their business, preventing them from looking for other options.”  cues icon

Celia Shatzman has penned stories on topics ranging from beauty to fashion, finance, travel, celebrities, health and entertainment.