By W.B. King
The 2021 World Credit Union Conference welcomed more than 1,100 attendees from 30 countries. With the goal of encouraging discussion on topics such as artificial intelligence (AI), digitization, regulatory reforms, cybersecurity and competing with challenger banks, the “all-virtual” week-long event (July 14 to 21, 2021) featured various speakers, educational sessions and networking events.
“I think what's key is the fact that World Council has always been a member-driven organization since the very beginning,” said World Council of Credit Unions’ (WOCCU) President and CEO Brian Branch. WOCCU, which sponsors the conference, is celebrating its 50th anniversary.
“And that means that the World Council has constantly been in communication with credit union systems around the world and is able to share the experiences, the lessons from one country — across borders — to other counties,” said Branch.
Building on Branch’s premise that WOCCU provides a platform for information sharing among credit unions to ensure the longevity of the “people helping people” movement, Bankjoy’s CEO and Founder Mike Duncan presented the session: “Advanced Conversational AI is Here.”
“I used to work at a credit union. One of the greatest challenges I faced was bringing together various technology vendors to deliver a beautiful and seamless digital banking experience,” said Duncan who spent part of his career developing software for Michigan First Credit Union.
“For many technology vendors, it seemed like user-interface design and experience were just after thoughts," said Duncan. "So many modern applications like Uber and Apple Fitness have opened our collective eyes about how great a digital user experience can be."
Duncan said companies like Chime and Apple Cart are demonstrating what a modern digital banking experience looks like, and how much better it can be. Bankjoy was founded in 2014, he added, specifically to help credit unions compete online. To date, the Royal Oak, Mich. –based company counts 50 credit unions as clients.
While Bankjoy’s platform offers online banking, mobile banking, online account opening and online loan origination applications, among other services, Duncan said he is most excited by the conversational AI component called “Joy.” Likening to Bank of America’s virtual financial assistant “Erica,” he said there is no reason why credit unions can’t deploy the same technology.
“Many have used Alexa and Siri. We built Joy, which is an AI that acts like a teller in a credit union,” said Duncan. “All the things you can do using mobile and online banking are things you can ask Joy to do using natural language.”
In order for conversational AI to work, the “assistant” truly must understand the manner in which people speak — not stock wording, but complex phrases and sentences, he said.
“The way people talk is messy sometimes and it’s not perfect,” said Duncan. “A member should not have to speak like a robot to be understood.” He added that Joy, which also has back office applications, speaks and understands multiple languages. Users can select voice options, such as a male or female voice.
Among questions attendees asked was if Joy was a standalone application or if it can be attached to a credit union’s operating system.
“Joy can be standalone,” noted Bankjoy’s Head of Growth Marketing Charles Cogan.
Another question centered on security, such as a member’s phone being stolen. Cogan replied: “Authentication via PIN code and account number. Voice-based authentication is possible.”
Dr. Ayesha Khanna, co-founder and CEO of ADDO AI, an AI solutions firm and incubator, said during a keynote address that while AI has been viewed as a disruptor in the financial services industry, credit unions can use the technology to better compete in the space.
“It can be a member of your team and it can help you make informed decisions; it can help automate processes that are grunt work and you didn’t want to do anyway,” said Dr. Khanna.
The Singapore -based ADDO AI, which counts Visa, Bank of Central Asia and Japan’s largest insurance firm SOMPO as clients, has offices in Roseville, Calif. and Lahore, Pakistan.
“You should really think of AI as, not a competitor to the task, but as a little personal assistant," added Dr. Khanna. "If that’s the perspective you have, then you can stand on the shoulders of machines.”
During his keynote speech, business futurist and digital transformation expert Greg Verdino said forward-leaning technologies like AI are part of a quickly evolving digitization landscape influenced by the pandemic.
“The new normal, the next normal — whatever you call it, it seems everyone is talking about it. I agree the old normal is gone, but the worst thing any of us can do right now is wait and hope for a new normal to emerge,” said Verdino, author of Never Normal: Uncommon Ideas for Leaders Who Won't Settle for the Status Quo.
“I believe in the coming years, every organization, and every one of us as leaders, workers and individuals, will need to learn to adapt to wave after wave of change — some small and some sweeping,” he continued. “Some will be predictable and some will be unexpected — I call this the 'never normal.’”
In many respects, Verdino said the technologies developed between 2010 and 2019 define the modern digital era. And by the end of the decade most organizations had a some type digital transformation strategy in place. But he cited Mike Tyson who once said: “Everybody has a plan until they get punched in the mouth.” And for most organizations that punch was COVID-19.
“Plans became practically worthless overnight. Even a year later it felt like the Earth was standing still,” said Verdino. “But the world’s largest tech companies were not standing still. The FANG (Facebook, Amazon, Netflix and Google) giants saw unprecedented growth.”
Tech providers, like the aforementioned, grew exponentially because they were a lifeline to billions of people across the globe, he said. To this end, the big became even bigger.
“This doesn’t mean that traditional organizations were truly standing still,” he noted. “Even if your pre-pandemic transformation plans were no longer quite valid, like most companies you most likely accelerated your digital agenda if for no other reason than to cope with the new reality that had been forced upon your organization.”
Defining a digital transition, however, is tricky business, said Verdino. If you ask 10 people to explain the term, he said you’ll likely get 11 different responses.
“I have always had a problem with the phrase. It’s never really been about being more digital,” he said. “Digital transformation is fundamentally business transformation — it’s more about your strategy than shiny objects. It’s about your people and your culture much more than it is about tools and technology.”
Digital transformation, however defined, is also never completed, he noted. A better way to look at digital transformation, he offered, is by what it achieves rather than the means it takes to achieve the intended goal.
“It closes the gap between what digital constituents already demand and what analog company actually delivers,” he said. But in his view the “digital transformation” occurring due to the pandemic is not a “leap” into the future, but rather organizations playing “catch-up” to changes occurring over the last two years.
Verdino added a positive spin saying that digitization efforts due to the pandemic has moved many organizations forward and narrowed the gap between a company and its customers, which he considers to be progress.
“Since COVID-19, we have seen companies rethink the nature of work as remote became a reality for so many workers. We have seen companies explore the automation of human tasks more seriously than they ever have before. Some incumbents made massive strides in their journey from analog to digital,” he said. “By April 2020, Walmart’s grocery app was the number one most downloaded shopping app in the United States topping Amazon’s mobile app for the first time ever.”
In light of the pandemic, traditional financial institutions like credit unions have to be proactive rather than reactive, Verdino implored. He pointed to the Great Recession and businesses like Airbnb and Uber that emerged from that financial crisis.
“Value for money, access to things over ownership and consumer control all became top of mind for people,” he said. “That period of time was a flashpoint for challenger banks that picked up steam in the wake of the new banking regulations.”
The COVID-19 crisis also underscored the fact that big banks struggled to meet consumer demand, Verdino said. As an example, he referenced the federal forgivable paycheck protection program.
“Square stepped into the void and processed and approved more than 76,000 loans in just six weeks,” he said. “What did they know and what could they do that larger banks could not do?”
While Verdino answered his own question by saying a company like Square had less reliance on legacy strategies and systems, he added: “But in a lot of ways their advantage also came from their ability to see an opportunity to be of service when others were stunned by uncertainty.”
Looking forward, Verdino said that the “record level of venture capital” flowing into fintechs should make banking executives sit up, pay attention and determine how to accelerate a digital evolution strategy that will anticipate member and consumer needs.
“The next game changers are not waiting for the state of the post-pandemic world to become obvious to everyone,” said Verdino. “Now is the perfect time to take part in re-imagining the future of credit unions, the future of banking or even the future of financial services in general.”
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