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Change Has Changed – Your Guide to Adapting

Originally published on CUInsight.com

2016 feels like a long time ago, right? Towards the end of that year, I wrote about how, unlike the way our brains work, change doesn’t happen linearly. Sidestepping any math, this means people are unprepared for the realities of today, never mind tomorrow.

Sadly, few leaders (elected or otherwise) understand this concept. But you, my dear reader and honorary geek, can!

Linear Change

Measuring Tape on Wood
One number after the last. No surprise jumps.

We think in a line. A → B → C and so on. The Industrial Revolution led to mechanical advances which moved forward greatly during (and because of) the World Wars, and this spawned the modern technological age. Transistors launched a million possibilities, and we live in that digital era.

The Small Screen Got Bigger (And Crisper)

Depending on your generation, you grew up with a B&W or color TV available in some fashion. Then came VCRs (or DVD players), along with cable/satellite boxes, and, by then, you might go for a snazzy HD TV. You’re living in the future! A future where you can finally make out the hockey puck!

A few more years passed and 3D was all the rage (and then it wasn’t), only to be replaced by 4K and HDR. For most of us, that’s where we are today (end of 2023). A lot of change, but not difficult to grasp. Screens got incrementally better, with some jumps larger than others.

Banking Goes Digital

During this same timeframe, banking has remained pretty similar. People can have a checking (share draft) and savings (share) account, along with special accounts like CDs, plus lending products. However, the act of interacting with these services couldn’t be more different.

First, there was online banking, which revolutionized accessing account details. In the early days, it was mainly a ledger that supported transfers. The web portal was akin to walking into a branch, only, paper and people-less, and open 24/7 (phone banking is a thing, but it’s a pain).

Mobile Check Deposit
The innovation that put change on an exponential path.

Then, we got what I consider the biggest banking innovation of the modern era: Mobile check deposit. This fundamentally changed how you interact with your banking institution, and eliminated the need for many to ever visit a branch. It also laid the “mindshare” groundwork for future P2P services.

Which brings us into the smartphone era with services like Zelle (bank-owned), Venmo (private company), Apple Cash, Cash App, etc. At this point, if you can’t do something on your phone (in the app or other simple path), and there’s no regulatory prohibition, why not?

These are massive changes, but they’re still pretty much linear. One thing led to the next. Many of us pushed credit unions for years to truly take on digital transformation strategies (that particular ship has sailed). Most are still woefully behind.

It’s time for a new approach. One that aligns with how the world is changing today.

Exponential (or Logarithmic) Change

Exponential Growth Dial

Spoiler: Change has always been exponential, it’s just that the rate was slow enough that we perceived it as linear.

Transistors? While their number (used to) double every 18-24 months (Moore’s Law), the scales in which they existed were shrinking dramatically. There’s a bit of marketing-speak involved, but modern chips have components less than 10nm across (a silicon atom is 0.2nm)!

Climate change, biodiversity, sea level rise, and other environmental issues are also seeing an increased rate of change. In other words, extreme weather is getting both more extreme and more common. Rising seas of last century are now coming up faster. Species loss is increasing.

The challenge today is the rate of change…of change.

It’s Not Just Tech

When we think of change, it’s easy to gravitate towards technology. Its forward march highlights the concept in tangible ways. Your really old phone was hanging on a wall. Your current one is a glass slab in your pocket that vastly outperforms the Apollo moon landers…and Mission Control.

It’s true, tech has revolutionized society and how we interact. At this point, you’re probably expecting me to dive into “AI” and chatbots. I could, but there’s so much already written, and frankly, I think what I already wrote about them explains their issues (and potential) just fine.

Change in Environment and Society

While technology lets us put our finger on specific change, it’s the more abstract stuff that creates real challenges.

The entire concept of “culture wars”, outlawing discussion of systemic racial inequities, and taking away women’s rights…each of these are symptoms of parts of society encountering exponential change and not knowing how to cope. Fear leads to poor choices (and groups taking advantage of that).

So…Banking?

Your credit union isn’t immune to these changes. And it’s not just implementing more streamlined LOS platforms or mobile apps. A credit union is made of its members, and those are just people…people who are facing a rapidly (and more rapidly) changing world.

Credit unions have a future in embracing their past. Sure, you still gotta improve your tech stack (look forward rather than just at today’s expectations). But it’s about growing into the credit union you could be. Change will continue to occur; evolve your systems and processes, retain your culture.

Turns out, I went into this back in 2018. And dove deep into the concept in 2020 with a focus on credit union’s role in society. Thus, I inadvertently proved my point that lots may evolve but the core principles should remain true. Didn’t Edward Filene once say “keep purpose constant”?

The Times They Are A Changin’

Time and Change
It’s easy to feel spun around as…the times are a changin’.

Change will continue at an increasing rate, and don’t feel bad if it seems overwhelming. It is. But stay focused on the things that matter: Fair treatment of all peoples (in rights and respect) and our shared planet, plus the prosperity of society (across a wide range of definitions).

Sidenote: That sentence is pulled from our company’s original mission statement in 2008. We strive to “keep purpose constant”.

Oh, and AI platforms will play a role in all of this (the 2023 word of the year is “hallucinate”, for when these systems confidently make stuff up). That role will definitely be to further mix up the status quo. I’m confident you will also find uses to improve member financial wellness!

And here you are, 1000 words in, better understanding and prepared for the changing change of the world (or just with your head spinning)! It’s pervasive across all areas, so keep an eye out for it, as well as for people who are using the uncertainty this change brings to advance their own agendas.

Embrace openness and curiosity over fear. Credit unions were built to make the world a better place, one member at a time. Let’s do all we can to ensure change always leans towards kindness and prosperity for all.

How Bath Mats Can Solve Your Credit Union Challenges

That’s it. All these articles, conferences (Ha! Remember those?), white papers, and trainings, and the solution was just getting bath mats.

How has no one told you this before?! The insight of a lifetime! If only it were that easy.

Where did this bath mat thing originate? Great question.

Insights From A Brewery

Our credit union chapter held an event at a local brewery. It was impressive how the community ideas mirrored between the CU folks and the beer team. You know credit unions focus on helping others. Interestingly enough, the brewery operated in the same way.

Brewer and Beer Vat

Most importantly, the brewery understood the value of addressing problems before they emerge. Which is where the bath mats come in.

Their bathrooms have blowers to reduce paper waste and keep it more tidy. Of course, what always happens under the blowers? All that water you just shook off your hands ends up on the floor. Which probably gets stepped in, spreading dirt and making the floor slippery.

That wasn’t acceptable to them. So, they preemptively solved the problem. By placing bath mats under the blowers. Go ahead, shake it off all you want. Water isn’t getting on the floor.

Back to our main premise: Bath mats were the solution. What about at your credit union?

Solving Problems Before They Happen

I shared that story to highlight an important idea: Issues don’t have to wait until someone complains to be addressed.

Look at your operation as a whole. There are a lot of moving parts. Plenty of places something can go wrong. What are you doing about it? Do you acknowledge these issues exist and fix as they show themselves? Or, do you think ahead and make quiet changes so they never happen again?

Preemptive solutions make for a smoother experience.

Look At Complaints…From Everyone

Problem and Solution Chalkboard

Members get priority. Obviously. When they have a problem, and it’s your fault, setting it right is your main concern. Once the member situation is resolved, you have completed phase 1: Solution. Now, you can move on to phase 2: Prevention.

What happened to cause that member complaint? Is there anything you can do right now so others won’t experience the same problem? Perhaps a description is worded in such a way that it can be misinterpreted. Or maybe training didn’t cover that specific scenario.

Address it now and spread that knowledge across your team. And then, progress to phase 3: Exploration.

This part is challenging but the rewards are massive: Higher member satisfaction and increased staff morale. Because solving problems your own credit union caused is less fun than helping members progress on their financial journey!

Steps to Complain, ahem, Improve

Issues Notebook
  1. Look at member complaints. Research support records (simpler if you have a unified ticket system, like Zendesk or similar). Find all the negative reviews on Facebook and Yelp. You’ve got them. The vast majority of businesses never answer. Be the exception. And then explain how you’re going to fix it.
  2. Use social media to discover members’ biggest CU frustrations. Seriously. Make it a fun contest if you want. Call it “CU Peeves” or something. Share things your own team can’t stand, then encourage members to rag on you. It’s like a roast, except you also benefit. Plus, you’ve just increased social media engagement.
    • At the end, let staff and members vote on the #1 frustration and then share how you’ve addressed it. I’m picturing banners in branches and on your website with member frustrations next to their picture (humanizing is important), alongside your solution.
    • Create a page showing how you’re making the CU better for everyone through these “small” improvements. It’s marketing, without feeling like marketing.
  3. Ask your staff. And listen. The “and” here is important. I’ve seen a lot of businesses solicit input from their employees on how to improve. It’s mostly quiet as they fear repercussions or ridicule. Or, they’re accepted, but no changes are actually made. Be open to criticism. Welcome it. Just how you did with members.
    • Your staff deals with your credit union every day. They literally know best its most annoying challenges.

Fix. Assess. Repeat.

You’ve done all these things. That’s awesome! I bet you discovered a whole lot of issues few in upper management ever realized existed. And now they’re solved for staff and members!

Blue Arrow Circle

You’re not done.

It. Never. Ends. This is a continuous process that must happen regularly. As staff, members, and technology changes, new challenges will emerge, too.

And maybe one of the things really is bath mats. See? I told you!

If Your AI Is Only For Chatting, You’re Doing It Wrong

Updates:

June 2023: There are many issues with these systems and the speed at which they are being adopted, without care for the negative consequences. However, there’s definite value for your credit union. So long as you approach it with reason.

February 2023: With the release of OpenAI’s ChatGPT-3.5, this has all been both turned on its head, and also exactly the same. ChatGPT is good. Coherent and, frankly, perfect interview good. But only for appropriate uses. It does have a habit of “hallucinating”.

I’ve spent many hours working with it as well, and the results are stunning. It has helped me plan out a year’s worth of blog articles, then draft each of them (still up to me to format and post!). I tossed around some marketing ideas and got its hot takes, which were all valuable.

Some of the more fun and wow-worthy interactions will be seen over time. Hey, can’t spill all the beans at once!

Suffice it to say, this is the chatbot that will make them relevant, meaningful, and insanely useful. I’m not smart enough to explain how big a deal this is, so I asked ChatGPT to help me out. Here’s what it had to say:

ChatGPT is the future of AI customer service for credit unions. With its advanced language model, it can hold human-like conversations on any topic. Think of it as a smarter, more efficient version of Jarvis from Iron Man. Empower your credit union with the power of AI and give your members an unparalleled banking experience.

ChatGPT-3

Let this definitely-not-AI-but-people-will-call-it-that-anyway help you internally. Use a restricted form to manage questions. Then give members a chance to connect to a person, through whatever medium they prefer.

All that said, it doesn’t mean you should dedicate all communications, article writing, email drafting, and website updates to ChatGPT (or the bazillion related systems emerging).

Focus on the human touch. Embrace your mission. And remember: People. Helping. People. (And “AI” can help!)


Original article:

“Ask Our Friendly AI!” Your credit union’s website is excitedly promoting their new chatbot, there to answer questions 24/7. “Cool, so how can it help me save money or time?”

Whether they admit it or not, that’s what your members will be thinking.

In some cases, such tech is fielding member requests without burdening traditional staff time. And their resolution rates can be similar to human representatives.

What are you waiting for? Get Siri, Alexa, Cortana, and friends to every CU! (HAL is not welcome, sorry)

Interacting in a Financial World

If only it were that simple. “AI” support agents are uniquely programmed to understand financial world terminology. Plus, computers don’t excel at interacting like a person, since we learn and process the world in a different way.

Chatbot

As of the end of 2022, it looks like that day is finally here. With ChatGPT, you can have full conversations on topics far and wide. And it can even “hallucinate” other environments, opening the door to incredible education opportunities.

What may be even further off is having all systems talk to each other in the background. (ChatGPT is deliberately not connected to the internet, but the possibility is certainly there for closed-network interactions.)

Here are some ideas I had in 2017, when the “state-of-the-art” for AI was far less impressive. Amazingly, my insights on an increasing rate of change…of change are coming to fruition. So, back to 2017….

Imagine being able to ask Siri (remember that post?) to transfer money from one account to another and explain the tax implications of your specific IRA contributions.

Then find out the score for your favorite team’s last game.

But we’re not at that point…yet. And look who spoke too soon…we’re actually getting awfully close.

AI for Serving Your Members

Readers know my passion (that’s 3 links!) for the “AI Revolution”. With its arrival, a lot of ideas are being thrown around on best use. Right now, the most common answer is: Everywhere!!!

Brain Split by Tech

Patience, my young Padawan. A fancy chatbot might seem like the natural first step, but let’s look at it from a member benefit perspective. If they have a question, they don’t care who/what responds.

Your members want a quick and accurate answer. If your team is currently able to keep members served quickly and effectively (through any medium they contact), then this may not be a fit for you at this time.

Unless you have unlimited resources, in which case, yes, do all of this at once. Just make sure you have top-notch project management to ensure the focus is always on the unified credit union goals.

Big Data

For the rest of us, the AI which makes the most sense, if less “sexy”, is the Big Data side of AI: Machine learning. Here, you have solutions that can do things quickly which would take enormous staff effort.

Machine Learning Innovations

Fractal
This is your data. Your AI can find the patterns.

For example, you can analyze a member’s credit (beyond the report) and offer a rapid loan decision with a high rate of accuracy.

You can implement systems to monitor patterns in spending to identify fraud the moment it occurs, saving the institution money and the member frustration.

Machine learning is also enabling security of the body, biometrics. That’s the fingerprint sensor on your phone. Or FaceID on your newer iPhone. It’s also the Hello feature on Windows 10 computers.

Retina scanners combined with other biometrics, a security card, and “something you know” composes the “top level” of security at large financial institutions (and government entities).

Speed. Savings. Security.

Three great reasons to implement aspects of AI in your credit union. A recent post about this topic ended with a wonderful quote:

“When a bank…effectively uses AI, they run more efficiently and are able to connect more effectively with a segment of the population that will never be replaced by machines: their customers.” – Mohit Joshi, Innovations in FinTech

Ok, ok.  I’ve given you way too much to consider.  AI, Big Data, machine learning, algorithmic analysis…yeah, I get it. Overwhelming when you just want to know, “can this stuff help my credit union?”

So, I had a realization right after writing this post. Remember that series I did about tech in the financial industry? As part of it, I mentioned that financial institutions are at risk of becoming “dumb banks” in the same way that ISPs are “dumb pipes”.

What I mean is that you are at risk for simply becoming the corridor for other companies’ information. You hold the money, but your members use other services to move, spend, invest, even check on their funds.

The same is the case here with AI.

There will always be a place for information as you manage it now: Raw account balances aren’t going anywhere.  But that’s “dumb data”.  The future is in “smart data”.

Owl Reading

Where your credit union and members can find patterns in spending, opportunities in lending, and personalized recommendations for minimizing debt (or maximizing wealth).

How will you become the “smart data” of the future?

Image credits: Mohamed_hassan and Seanbatty from Pixabay.

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