Artificial intelligence (AI) and machine learning have been the talk of the town for many industries, including financial services, and the hype shows no signs of slowing down anytime soon. We believe 2019 will be a transformative year for AI, as many businesses, including credit unions, will begin to implement AI technology and witness a goldmine of advancements. Here are three predictions for how AI and machine learning will shape credit unions and other industries.
New Uses for Machine Learning
While the use cases are different, AI’s value is ubiquitous. Almost any industry can benefit from the detailed data analytics and pattern detection that AI and machine learning promise.
For instance, the US Army is currently testing using machine learning to predict when combat equipment is in need of maintenance, something that traditionally took hundreds of hours countless resources. Instead of being reactive, these AI assistants look at millions of data points about the machine and compare them to patterns of equipment failures with similar vehicles in order to flag down a potential problem to an army mechanic. It sounds high-tech and futuristic but experts believe this sort of technology will soon be available to consumers with private vehicles. In other words, AAA might go out of business when your AI assistant can successfully predict when your transmission might die or the next tire goes flat.
Healthcare is another candidate for a machine learning disruption. Google has already started to predict the likelihood of a patient’s death using machine learning – with a staggering 95 percent accuracy. The AI system created by Google looks at a number of variables of a patient’s health history and more. It then predicts the probability of the patient’s death within 24 hours of admittance. This could have an enormous impact on how doctors deal with certain diseases and, ultimately, save lives.
For financial services, this sort of advanced pattern and behavior prediction will be crucial in the fight against fraud. Like the consumers they target, fraudsters are becoming more digitally-savvy and are now employing sophisticated methods and machine learning technology to commit global fraud at a scale of $43.8 billion this year alone. At the same time, financial institutions are spending almost $3 for every $1 earned in revenue trying to fight fraud.
To reverse this alarming trend, financial institutions need to fight fire with fire – deploying advanced technology to detect new, ever-evolving fraud patterns and trends.
Earlier this year CO-OP unveiled its vision for bringing AI to the credit union industry through the launch of COOPER. COOPER will use advanced rules and decisioning to evaluate transactions based on type, amount, speed and other attributes, and then instantly detect anomalies, such as new account fraud, in-branch teller fraud, and fraudulent check deposits.
Beyond fraud mitigation, we believe AI can and will be leveraged to help credit unions better understand their members’ needs and preferences. By drawing on volumes of data about their members’ transaction history, credit unions can help predict member behavior and create more engaging experiences for them. (Learn more about COOPER, available to participants on the CO-OP Shared Branch network in early 2019)
Further Integration of Human and Machine Interactions
AI isn’t just about replacing old technologies or human workers. Businesses are beginning to see AI an extension of their business, contributing to its success by making its employees more efficient.
One way in which this dynamic is already taking shape is in the area of member service. Contact center representatives are constantly burdened with the task of managing high volumes of calls, routing them to the right departments, and interfacing with angry or upset members. Not only does this create an enormous strain on resources but also creates a bad experience for the member. Machine learning can help streamline and automate many of the routine tasks that contact center representatives have to deal with. For example, it can predict the reason for a member’s call based on the time of day the call is being made, his or her location and other variables and route the call directly to the correct department in real-time.
Throughout 2019, it is predicted that AI will continue to evolve and the integration between human and machine will reveal numerous benefits. We will also begin to understand the limitations of AI and see where human intervention and training is required. It will be interesting to see where we find balance and success.
The advent of AI assistants
In some cases, AI will be designed to mimic human behavior, such as with AI assistants. Slowly but surely AI assistants are becoming part of the fabric of our lives. We ask Alexa to turn on the light and play music and ask Siri to find the best route home. And these simple tasks are just the beginning. We will begin using these assistants for every day, operational tasks such as reading email, responding to communication, paying bills, ordering products and scheduling meetings.
2019 will be a big year of development for the AI assistant. Automotive companies such as Kia and Hyundai will include AI assistants in their vehicles starting in 2019 to do things like suggest destinations based on what’s next in your calendar or based on your past preferences and choices. They might even begin offering self-driving cars and smart home control using voice commands.
Within the financial services industry, chatbots are becoming a popular method of mimicking human customer service on digital channels. Built with robust natural language processing engines, these virtual assistants will allow members to get information more quickly while providing a unique advantage over other companies that require members to pick up the phone or send an email. At the same time, these virtual assistants save businesses time, allowing them to have their teams focus on other aspects of the business. This kind of chat experience is not yet the norm in the banking industry but is expected to grow in popularity.
2019 will be a critical year for AI and machine learning and the credit union industry. Join us at THINK 19, May 6 – 9, 2019 at the Lowes Miami Beach Hotel, as we explore many of these important topics in more detail. Now through January 3, credit unions can save $400 off the full registration fee. Register now.