May 21 2021

Opportunities and Risks of Conversational AI for Credit Unions: Empathy and Intimacy in Automated Financial Customer Service

Report  
Number  
537

As the use of digital channels continues to grow for credit unions, conversational artificial intelligence (AI) technologies provide an opportunity for improved service delivery and the potential for new service offerings such as financial advice.

Scott Mainwaring
Scott Mainwaring
Research Affiliate
University of California, Irvine
Melissa K. Wrapp
Melissa K. Wrapp
PhD Candidate, Department of Anthropology
University of California, Irvine
Report Number 537

Executive Summary

Conversational AI technologies create new ways for credit unions to serve their members, from providing alternatives to interacting with human agents to creating new channels for more tailored financial services. They provide opportunities to build upon the trust and appreciation members place in credit unions as more human-centered, nonpredatory, and community based. But conversational AI technologies risk invading members’ privacy and being frustrating and opaque.

What is the research about?

This exploratory study looks at existing consumer relationships with conversational AI and digital assistants, on one hand; and with credit unions, banks, and other businesses, on the other, to begin to sketch the dimensions of, and provide examples of, points within a “design space” of possible financial digital assistants. While operational hurdles remain high for credit unions to deploy these new technologies, the opportunity will continue to grow in coming years. 

What are the implications of digital assistant technologies for how members and credit unions could relate to one another in the next five years?

Through ethnographic research with consumers, this report anticipates how credit union members might come to value, or reject, digital assistants. For this exploratory study, we focused on one main question: What are the implications of digital assistant technologies for how members and credit unions could relate to one another in the next five years?

Interviews covered three broad topics: experiences using banks and credit unions; experiences using digital assistant technologies; and reflections on the idea of a financial digital assistant and issues of privacy, trust, and potential bias. This report summarizes findings on these themes and provides insight into how credit unions could take advantage of digital assistants to improve service delivery and differentiate offerings by incorporating elements from their mission and value proposition into their digital assistants. The way forward is to develop particular product proposals and related data transparency policies that can provide members with a new understanding of what they could achieve by relating with their credit unions through “talking computers.”

What are the credit union implications? 

Credit unions have an opportunity to deploy digital assistants in ways that improve service delivery and member experience and provide new types of service offerings. In thinking about what types of digital assistants would provide the best fit for your credit union and member needs, keep the following research findings in mind: 

  • People like the promise of bots as part of a modern, organized, and simplified life.
  • The realities of existing bots fall short of expectations and can limit imagination.
  • People are resigned to the constant advance of technology without transparency or the ability to meaningfully opt out.
  • Relations with credit unions are valued for their human element and trustworthiness, even if this means older, clunkier tech.
  • The design space is complex, including diverse combinations of technologies, member needs, and business opportunities worth considering.
  • The idea of talking with/through bots is becoming mundane, but credit unions could pleasantly surprise members with unique service features.
  • Credit unions could tailor these technologies to show their strengths and to educate members not just about finances but also about data. 
By building upon these core values of empathy and respect, credit unions could focus their development of digital assistant technologies in a way that creates differentiation.

In order to create a competitive advantage, credit union digital assistants would have to not only be useful and usable but also embody and express the core values of the credit union system. By building upon these core values of empathy and respect, credit unions could focus their development of digital assistant technologies in a way that creates differentiation, even with fewer resources than are available to larger financial services providers. 

We use findings from our research to generate design ideas that are meant to illustrate pathways worth exploring, developing, and evaluating: 

  • Build a helpful, always-accessible agent. This kind of digital assistant could serve as the voice of the specific credit union and provide basic support but also demonstrate the “members not customers” ethos of the credit union value proposition.
  • Provide an assistant to help members maintain, augment, and monitor their personal financial support systems.
  • Provide robot counsel. This financial digital assistant could serve as a “second pair of eyes” as members conduct transactions with any financial services provider, intervening if necessary but always being available for reassurance or advice.
  • Connect members to each other. This assistant would embody the credit union as a member cooperative, helping connect members to each other.

Executive Summary