Driving Digital Excellence and Financial Wellness With AI

By Siva Narendra, CEO and co-founder of Tyfone

Credit union members today not only love the ease of using digital technology but also expect it as a standard part of their financial interactions. However, in today’s increasingly competitive market, credit unions must enhance digital capabilities with more personalized experiences. Leveraging advanced AI tools is key to providing members with a more tailored, intuitive and engaging digital banking experience.

In 2020, the global AI in the banking market was valued at $3.8 billion and is projected to skyrocket to $64 billion by 2030. A recent report from the McKinsey Global Institute indicated that across various industry sectors, the financial services industry has the greatest opportunity to benefit from adopting AI technology, estimating an annual potential savings of $200 billion to $340 billion (equivalent to 9% to 15% of operating profits), largely from increased productivity.  Additionally, as computing power, digital networks and AI power continue to grow exponentially, credit unions will need to be agile and strategic about implementing tools that can keep the pace of technology and deliver exceptional member experiences.

The pressing question for credit unions isn’t whether to use AI, it’s how and where to most effectively implement it to streamline operations, while providing members with a more engaging, personalized experience.

Humanizing AI To Deliver Superior Digital Experiences

Now, thanks to natural language processing (NLP), AI assistants can better understand what users want by providing instant responses 24/7, addressing common questions like account balances, transaction history, and loan options without any wait time.  

AI assistants have advanced significantly and are capable of much more complex tasks beyond answering basic queries. It proactively helps users manage their finances by providing budgeting advice, sending out critical notifications and monitoring credit scores.

Future AI assistants could harness predictive analytics to provide insights based on spending habits, suggesting investment opportunities or flagging potential financial risks. Plus, with ongoing improvements in machine learning, these assistants will get even better at adapting to individual preferences, making future interactions more personalized.

AI isn't just for the big players. Credit unions can leverage AI to stand out in the crowded financial landscape. Members prefer the personal touch of local banking, but they also want the digital ease big institutions offer. Partnering with innovative digital banking providers that integrate AI in their digital banking ecosystem help credit unions go head-to-head with big banks by delivering standout digital banking solutions.

Using AI To Recognize Intent In Digital Banking

With countless digital banking solutions, each packed with hundreds of features, advanced AI-powered assistants can be seamlessly integrated to ensure members easily find the most important tools.

AI simplifies user interactions by enabling natural, conversational navigation. Users can type commands in everyday language to accomplish tasks like paying bills, managing finances, or transferring funds. With sophisticated lexicon and vector search technology, these tools understand the context and meaning behind user questions, quickly delivering the most relevant results.

Adding another layer of functionality, advanced intent-recognition capabilities streamline the user experience even further. For instance, when a user types “send money to James,” these tools not only understand the request but also help complete it efficiently. If someone expresses a goal like “I want to save more,” AI interprets this intent and suggests relevant options, such as high-yield savings accounts. This turns digital banking into an AI-powered search engine, where your account holders can easily perform financial tasks in just a few clicks, rather than navigating through the entire platform.

Using Artificial Intelligence To Optimize Financial Wellness

With inflation impacting the costs of housing, food and utilities, financial stress is hitting people hard. In response, financial wellness tools are becoming essential for helping people manage money and reduce stress in these challenging times.

According to a report by FIS, 73% of consumers utilizing digital personal financial tools are represented by Gen X and Millennials with low interest from seniors and baby boomers, who prefer more traditional money management methods. By helping account holders manage debt, save, and plan for major life goals like homeownership credit unions strengthen relationships and differentiate themselves in the market.

AI-powered financial tools take a closer look at your account holder’s spending habits and give them actionable insights that result in healthier financial habits. For instance, these tools can spot when a person is splurging too often on dining out, hobbies, or entertainment, and suggest ways to cut back on those expenses or redirect that money into savings instead.

In the long run AI can make a real difference here, providing insights and support that account holders need to make smarter choices, helping individuals set and track personalized financial goals.  These tools don’t just throw out random suggestions; they help individuals set realistic targets and keep them accountable with ongoing tracking and reminders. By making goal-setting a personalized experience, consumers stay engaged with their finances, reinforcing good habits and making money management feel like a part of their everyday life. 

Increased Member Loyalty

When consumers feel like their credit union is a true partner in their journey to financial wellness, they’re more likely to stick around, leading to better retention rates and positive word-of-mouth. AI insights can also pave the way for financial institutions to effectively cross-sell products tailored to their account holders’ specific needs. By integrating these recommendations into the overall financial wellness plan, FIs can make the process feel seamless and natural, enhancing user experience and building trust.

With AI analyzing data points like spending patterns, transaction history, product use, and login trends, FIs can create personalized recommendations that provide more value to the end-user. For example, if an account holder keeps a high balance in their checking account, AI could identify this as an opportunity to suggest a high-yield savings account. This way, account holders can make more from their money, ultimately improving their financial well-being over time.

Credit unions can also understand why users are disengaging with their services and try to avoid churn, helping them stay more competitive. By addressing common pain points head-on, credit unions can improve account holder satisfaction and raise engagement with their services. According to a study by McKinsey, FIs that implement personalization strategies are seeing a 10%-15% increase in sales conversion rates and a 20% increase in consumer satisfaction.

No matter how you look at it, AI is bringing exciting opportunities for credit unions. In the coming years, AI will completely transform how financial institutions work, making banking smarter, faster and more convenient for account holders. The possibilities are endless, paving the way for a next-gen user experience that truly empowers your members.