This article is a three-part series exploring the watershed moment that AI brings, the journey to be compliant, and the AI uses cases within a credit union.
Every credit union leader is talking about AI, but few truly grasp its profound impact. This is not just about new software. It is about a fundamental shift that will determine which credit unions thrive, and which merge. Our vendors are talking about it. Our peers are talking about it. Our auditors and examiners are talking about it, albeit often in riddles. There’s no shortage of AI talk but understanding remains rare. Much of that lack of understanding comes from the complex technology and processes behind AI’s potential for banking.
As a credit union CIO, I asked the same questions you ask about AI. My journey to understanding AI began even earlier, in the U.S. Army Reserve, where I had the unique opportunity to serve with the Army AI Task Force as an innovation officer. What I learned there, and then applied in banking, revealed a profound truth: AI is more than just a tool. It’s a revolutionary way of doing business. It all clicked for me about three years ago. AI is so much more than a buzzword. And yes, AI will merge your credit union.
Understanding the types of AI
Before we get into why AI will merge your credit union, let’s lay some groundwork. There are a few forms of AI.
- Narrow AI: This is the AI that most in business had exposure to in some capacity at this point. These are the purpose-built applications of AI. These are our lending origination systems (LOSs), chat bots, and telephone intelligent virtual agents (IVAs). Large Language Models (LLMs) like the tech behind ChatGPT, Google Gemini, or Microsoft Copilot are the AI you are probably already interacting with, and they will be our focus in this article.
- General-purpose AI: This is AI that can pretty much do anything. This is the AI that could essentially 'think' and perform complex tasks like a human, like managing an entire business or even performing surgery. Right now, this kind of AI is still theoretical. In my work with leading AI researchers, the consensus is that general AI is still many years away. But let’s pause on that and reflect: years away. Meaning at some point in the future, we will likely cross this gap too.
How AI leads to credit union mergers
So, how does AI lead to credit union mergers? It's not the technology itself doing the merger; it's how credit union leaders choose to use it or not use it that will shape their destiny. Leaders who embrace AI broadly as a process, not just a tool solving a narrow problem, will accumulate efficiencies and advantages not enjoyed by those who stick to manual processes simply because “that’s how we’ve always done it.” Or those that allow their personal preferences to override what the data is clearly showing.
AI as both a technology and a process that creates advantages that compound over time, leading to scale and agility that wasn’t previously possible. Scale—the ability to serve more members or process more transactions without proportionally increasing staff. Agility—the speed to adapt to market changes or member needs. It frees your valuable human talent to focus on what truly matters: caring for members and strategizing for the future, rather than getting bogged down in routine tasks.
But what about service?
Some are quick to criticize this position, holding that it is service that is what differentiates a credit union. At the heart of this belief, is the idea that if a human isn’t doing it, it is not highly personalized service. It is natural to feel this way, especially for leaders who have built their careers on the bedrock of human-to-human service.
It is hard to imagine a future you have not personally experienced. Decision researchers call this “status quo bias”—the comfort in how we've always done it. But as I learned firsthand, when we dramatically improved our call center's Net Promoter Score by nearly 60 points, efficiency and human service are not mutually exclusive. Indeed, it takes both in cooperation to realize the benefit.
To unlock AI’s potential, start with this principle: Technology should scale operations. People should care. Consider what operations in your credit union may be anti-human, where having a human doing it is not adding to the human value that we uniquely have: empathy and caring about members. If it is simply shuttling forms, whether printed or digital, or making sure that an application is completed correctly, these are functions that are by definition, anti-human. They are not applying your people’s potential to what they are good at: caring and figuring things out when the automation cannot.
A journey, not an overnight shift
Turning all the credit union’s processes overnight to AI is not realistic. This is a journey. Start with the principle of scaling with technology and caring with people. While it may be tempting to automate everything in the credit union, that ignores the ethical considerations of AI. In discussing AI ethics with the leading researchers and advocates, there are four common principles that emerged.
- Disclosure: Members should know AI is being used, and how.
- Consent: Members should have a choice, AI shouldn’t be the only option. If they want to wait to speak to a live agent, they should be able to.
- Enhancement: AI should enhance the human experience by removing anti-human tasks.
- Accountability: Leaders are accountable for AI’s outcomes, just as they are for employee actions.
The future is a choice
Leaders that employ AI strategically will enjoy compounding efficiencies and can focus more on delivering services worth telling someone else about. It is no exaggeration to call AI part of the fourth industrial revolution. Just like the last, there likely were some credit unions who resisted moving their GL from the tabular book to the computer during the information revolution. They didn’t survive and the same pattern will be repeated again.
This disruption is coming. But remember, it is not the technology alone that will do it, it is the commitment to the process with the technology. The choice is clear: will your credit union leverage AI to build unprecedented scale and agility, even merging with others from a position of strength? Or will it be forced into a merger because it couldn't keep pace? The path you choose now determines your credit union's future. Yes, AI will merge your credit union—the question is: how?
