Artificial intelligence and machine learning are already having a big impact on financial services. Chatbots are taking over online customer service, robo-advisors are automating asset management, and fintech companies are investing significantly in AI-powered solutions.
Credit unions have a unique opportunity in the AI-driven future. With access to so much member data, credit unions can deploy AI and machine learning in interesting ways that will improve both business operations and the member experience.
At THINK 18, Jean Chatzky sat down with Fotis Konstantinidis, CO-OP’s Senior Vice President of Fraud Products, to discuss where credit unions should consider deploying AI and machine learning – and what these technologies can help them accomplish.
Using AI to Better Understand Your Members
For credit unions, the key benefit of AI will be its ability to help them understand their members, something which is core to their values. “Credit unions differentiate themselves by being close to the member, unlike the big banks,” Konstantinidis says. “AI is the digital tool in your arsenal to understand your members now.”
By ingesting and processing large quantities of data over time, Konstantinidis says, credit unions will be able to paint a more accurate picture of their members based on their activity and behavior. The immediate and obvious application for this will be in fraud mitigation. At THINK 18, CO-OP unveiled COOPER, a data-driven platform that will predict behavior and prevent fraud across the CO-OP ecosystem. COOPER will soon incorporate machine learning technology and eventually AI. Rather than looking at one transaction at a point in time to detect fraud, COOPER will analyze the whole member journey. “We’re not trying to understand a transaction you made at a gas station: we’re trying to understand you,” Konstantinidis explains. “If we see [a transaction] that’s an anomaly – that’s outside your behavior – we’ll flag it, because we know that’s not who you are.”
The end goal, therefore, is not just better tools but a more sophisticated understanding of your members.
Using Data and AI Responsibly
But with great power comes great responsibility. If we have learned anything from the recent Facebook and Equifax hacks, it is that companies with access to user data must be transparent and responsible in how they use it. Credit unions must ensure they are safeguarding their members’ data and that members understand how their data is being used to protect their accounts and enhance their experience.
“At CO-OP, we’re very serious about anonymizing data and [are] very aware of privacy concerns,” Konstantinidis says. “[We also] want to be transparent, to let members know we need that data to protect them.”
Preparing for an AI-driven future is both a technological and a human challenge. Konstantinidis says that shifting your culture can be as critical as any technological transformation: “You need to ask, ‘how do we work together? How do we [become] agile? How do we adapt? How are we open to failing?’ Because that’s how you learn. Machine learning is just like human learning. You need to fail to learn. If you never fail, you’ll never learn.”
Learn more about how COOPER can aid your credit union in the fight against fraud: co-opfs.org/cooper.
And for a deeper understanding of COOPER and strategies to advance AI at your credit union, join us at an upcoming CO-OP Roadshow event near you: