Credit unions have had to quickly embrace technology to continue meeting business member demands in an ever-changing landscape.
AI is becoming more prevalent, multi-factor authentication is needed even more to keep accounts safe, and advanced data analytics help credit unions identify trends. It can be a lot for credit union leaders to take in, but these tech-related trends are not going away and will persist in 2025.
Host Sarah Snell Cooke sat down with Alkami Project Management Lead Mandy Lopez to discuss how credit unions can make the most of AI and data to create more personalized experiences for their member businesses.
Read the full transcript:
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Sarah Cooke 00:02
Hello. Welcome everybody. This is Sarah Snell Cooke. I am the host of The Credit Union Connection, and we’re here today with Mandy Lopez, who is with Alkami. She’s a product management lead. Uh, welcome Mandy.
Mandy Lopez 00:45
Thank you. Great to be here.
Sarah Cooke 00:47
We’re gonna talk about the ever changing business landscape and how that’s affecting credit unions and the businesses that they serve. Because, I mean, I personally feel that business lending, business services is something that’s, a lot of credit unions are missing the mark on. They’re not even offering, I know my credit union, I love them, but I had to go to the bank across the, across town to get business services for, for my own business. So, Mandy’s going to talk to us all about that, the trends that are coming in 2025, so let’s start with, I mean, everybody’s talking about modernizing, everybody’s talking about AI, how do I fit it in? And you know, what is the purpose? What is it going to do for us? What’s our why for the AI, which is very cool, right? Rhymed there. But Mandy, why don’t you go ahead and start off with that big bite of a question?
Mandy Lopez 02:01
Absolutely, yeah, we are seeing AI really become relevant in all areas of our lives. You know, I think we see it in TV programs that we watch personally. It’s now starting bleeding into the business banking space. So I guess my recommendations for a credit union, maybe wanting to further explore this a little bit is to start with clean and categorized data and start small. This will help the teams at the credit union, your teams, better understand patterns and trends of the member base, to be able to apply appropriate solutions based on those patterns. This can apply to certain situations, identifying common issues like overdrafts, and then offering tailored solutions or products to solve that issue. Another example is a business doing a lot of stop payments, leveraging that data to gain insight on that and having your banker reach out to that member to offer them positive pay is a win-win. Not only will you at the credit union be collecting recurring monthly revenue from that positive pay product, but you’re also helping your business member to not pay for each stop payment, but to do a check void instead, which is normally included in the cost of the monthly maintenance for positive pay. That not only builds trust with your business member, but it also builds that loyalty. So as you mentioned, Sarah, they don’t go down the street to credit union X. There are many other examples, but as I mentioned before, start small and in areas that will be impactful to your credit union and build from there.
Sarah Cooke 03:30
Absolutely. And so, another thing that’s been a topic of discussion for probably at least a decade is the data analytics and what can we do with them? How do we clean them up? You know, getting again, back to that basic that you mentioned, the very small things to start with. So how in 2025, how are credit unions going to be able to leverage analytics to better serve their, their business members?
Mandy Lopez 03:57
Yeah, there’s a lot of different ways that they can do that. Again, taking those bits and pieces, aggregating that data, and really evaluating that data set is going to give them further insights. Maybe, maybe it’s their deposits are dropping off across a certain NAICS code or a certain segment of businesses or retail clients. Using that data, they’re able to see where is that, where are those deposits going? Or maybe they want to expand their lending opportunities. If they’re noticing that they have a lot of small businesses that don’t have any lending with them, they can use data analytics, and Alkami does offer a product that supports this, that they can glean that data from and then directly market to those retail or business clients to be able to gain that, that business over onto that credit union, that FI.
Sarah Cooke 04:49
And so, a big thing that is growing, and I think in part AI has a piece to do with this is the fraud. It’s making it easier for fraudsters to commit fraud, but it’s also hopefully helping credit unions and others to be able to prevent fraud. And so how can we use AI to strengthen cybersecurity and other tactics as well, obviously, and reduce risk overall, especially in that fraud area?
Mandy Lopez 05:22
Yeah, you’re so right Sarah. Both fraud and cybersecurity are absolutely pressing issues for FIs across the country. As fraudsters become increasingly sophisticated, FIs have to consider, how are they going to invest in security and prevention? Advanced measures like multi-factor authentication, or MFA, and using those behavioral analytics can be leveraged to identify and potentially avoid fraudulent situations before they become costly. There’s programs that are out there that will look at IP addresses, time of day that people are logging into their digital banking platforms, typical transactions that are being made, and it will show anything that’s outside of that kind of that norm as it builds that, that history, that database of memory, and let the FI know, hey, this is coming from a different country, maybe you want to reach out to your member. Are they traveling? Or is this potential fraud? That way they can cut it off at the knees and really reduce their risk.
Sarah Cooke 06:24
Yeah, I could certainly hope that my, I have an account at business account at a credit union too, now, and you know, at times they will shut off a regular monthly transaction for fraud, but then they don’t catch that, you know, somebody bought four plane tickets in Florida.
Mandy Lopez 06:49
Exactly. You’re absolutely right.
Sarah Cooke 06:51
Yeah, yeah, definitely, definitely can relate to that. Now, of course, credit unions are non, not for profit, but they need to keep the lights on. So profitability is important. Regardless of the mission, we need to be able to keep running and so how are we going to give this data, share this data with the business managers in a way that they can use it to help their business thrive, help them, help them do better in the long run?
Mandy Lopez 07:27
Yeah, that’s a great question, and I think there’s kind of a couple of pieces to this. It’s using that data, but it’s also gaining and keeping that member satisfaction and relationship building. So it’s, it’s, it is using AI to a certain degree to attract and retain that membership base, but at the end of the day, there’s always somebody behind that computer screen. There’s a human on either end, on the credit union side and on the client side. And I’ve been a long term banker, recently, just got into financial technology, FinTech with Alkami, but I really built and maintained my portfolio of clients through that, that white glove service, or that relationship process that I think people want, especially in this digital age. So to me, it’s really about focusing on building that long term trust and those relationships with those members, because that can, that can lead to increased profitability over time. Investing in what is important into the community that they that you guys are based in out there, that really separates your organization from the national banks and it resonates with your member base.
Sarah Cooke 08:41
Yeah, I saw an ad the other day about Chase. We’re in your community. I’m like, Uh huh.
Mandy Lopez 08:46
So are we.
Sarah Cooke 08:47
Well, it rings a little hollow, but yeah, I want to go back to something you mentioned in during that, that response was the, you talked about the white glove service, the High Tech, High touch. How are we able to apply that? Like, for, give an example of like, where that is truly, to truly illustrate how that works, how like…
Mandy Lopez 09:10
Absolutely, and I kind of touched on it a little bit earlier, but let me take a little bit of a deeper dive into it. So I think in my career, I was always in a community bank environment. I started at a large national bank, but quickly moved into community banks and never looked back. I always say, what really separated us is our clients and our members were not an account number. They weren’t a last four of your tax ID. We met with these people. We were in the community with them. We had at least quarterly, if not more often, touches with these clients to make sure that they knew that we were there for them, even if they didn’t have needs at that time. A lot of times people call when there’s issues, and that’s the only time that you hear from somebody. Well, we like to kind of flip it on its head and call them and just say, Is everything going well? Anything we can help you with? And we love to hear that No, everything’s great. Thank you for reaching out to us. It’s not always to sell something, it’s not always to solve a problem, so really establishing that relationship, and you know, we did it a lot in my past, where we would use analytics that we had back in the day to reach out and say, Hey, I noticed that you’ve got a lot of cash in your operating account, Business X. We are offering a CD promotion, a money market promotion. We have investment sweeps. We can offer you a line of credit and set up a sweep between those two with a third party sweep up to an investment. Are these things that you’re interested in? Would you like, would you like to talk about them? We would like to get out in front of it, because we knew that Bank X down the street was probably going to do the same thing. So really keeping us on task and really strengthening that relationship builds that, that solid partnership where that client, that member, is not necessarily going to reach out to another bank, but they’re going to come to you first if you’re offering these solutions.
Sarah Cooke 11:06
Yeah. And you know, as a small business owner, it’s just so, you’re so busy, it would be great to have somebody just call and give me money.
Mandy Lopez 11:15
You’re right, Sarah and that, and that’s really what it comes down to, and that’s what I’ve always said too, is you guys are good at running your business. We’re good at banking, like, let’s meet in the middle, and we’re not going to overload you with products. But again, using that data that AI, we can kind of hone into the products that, that we think that you guys are going to need. So let us have that conversation, and it’s okay if it’s not a right now, at least you’re building that knowledge base and your understanding that we’re not just a deposit and check and debit card shop. There’s a lot of other things that we can offer.
Sarah Cooke 11:48
Yeah, and having your relationship where you explain exactly how you can help them. It’s not, you know, let’s go play a round a golf, I mean, not that you don’t do that.
Mandy Lopez 11:59
That’s fun to do.
Sarah Cooke 11:59
Yes, that too. But really sharing the benefits is important, the benefits of the relationship, and so, also big issue for businesses is visibility into their financial position, like centralizing cash management, liquidity management and improving Treasury services and risk management. Talk a little about, bit about what’s going to happen there in 2025.
Mandy Lopez 12:23
Absolutely. So, nail on the head again. Sarah, digital banking and technology based tools are crucial to supercharging Business Banking offerings. This can include options like cloud based solutions to automate account opening and cash management, as well as integrated platforms that allow teams to seamlessly move information from one one area to another for functions like accounting and taxes. I’m going to pause because I’m going to go on and talk about alchemy, if you want to cut this out. So Sarah, I’m going to pull back the curtain a little bit here on Alkami. We have a model for how we organize our digital banking platform, and it’s really simple, build by partner. We have a great digital banking platform for retail and business clients that we’ve built ourselves. We also take into account other areas that keep us competitive and keep you the credit union competitive. If we don’t build it, we’ll look to either buy it or partner on it. We’ve made strategic purchases in the past to add features to our platform that credit unions want and need, such as digital online account opening for your members and the ability for you, you to use client information data to create marketing specific campaigns. Additionally, we partnered with several companies to add more offerings to our platform. These partners go through a heavy scrutiny in the initial phase of the partnership and every year thereafter. So we want to ensure that the products that, that we are offering to you is solid, reliable, and not only helps you guys with a well rounded offering, but are things that consumer or a business needs, and as you mentioned earlier, could be willing to pay for.
Sarah Cooke 12:24
Mm, hmm, absolutely. Businesses are used to paying fees for things, and…
Mandy Lopez 14:14
Absolutely.
Sarah Cooke 14:15
When all the other non interest income revenue streams are going away.
Mandy Lopez 14:21 You got it!
Sarah Cooke 14:22
Yeah, absolutely. So one of the things I always offer when I’m doing these interviews is to give
my guest the final word, final thoughts. So Mandy, take it away.
Mandy Lopez 14:40
Thank you. Yeah, if you don’t mind, I’d like to share some of the key takeaways that we have discussed earlier today, just to kind of wrap it up. Perfect! So I’d say first and foremost, adopt AI and automation for smoother processes and more personalized services to your members. We really feel that that’s going to solidify your relationships with those members going forward, it’s kind of the way of the future. Secondly, I would say, use data analytics to proactively identify member needs and offer those tailored solutions to them. It makes them feel seen. It makes them feel like you understand their business, that you care about them, all of which are true, but it furthers that, that, that mentality. And then last but not least, implement fraud prevention measures like multi-factor authentication and behavioral analytics that will keep your members safe and strengthen their relationship with you. They know that you have their back.
Sarah Cooke 15:38
Yeah, and that’s exactly what credit unions are there for. Mandy, thank you so much for your time and insights. I appreciate it.
Mandy Lopez 15:45
Thank you. It’s great to be with you today. Thank you so much.
Sarah Cooke 15:47
Yes, have a great rest of your day.
Mandy Lopez 15:49
You too. Thanks.