GenAI Can Help Credit Unions Match Payments Innovation to Member Needs

Vlad Jovanovic, vice president of innovation at PSCU, told PYMNTS that credit unions will gain loyalty as they harness artificial intelligence to forge new use cases and personalized interactions with their retail and commercial clients.

“The enterprises that invest in building new experiences today [with the aid of AI] will stand to gain tremendous benefits to their ROI in the future,” he said.

He made his observations as part of the continuing “What’s Next in Payments” series, focused on generative AI.

Through the past decades, the initial forays into AI were limited by rules-based and statistical methods. Those methodologies have now given way to the deep learning techniques that generative AI models use today.

Now, chatbots — ChatGPT most visibly among them — have demonstrated what Jovanovic said “is an enhanced ability to grasp nuances and generate creative content across diverse domains.”

Streamlined Workflows and Payments Innovations

In the business and financial services realms — and for credit unions — he said the opportunity is there to serve consumers in new, innovative and streamlined ways.

“There are a lot of efficiencies and new opportunities that we can gain with generative AI,” he said, adding that interactions with call centers and addressing consumer needs in real time can get a significant boost from AI.

“I’d love to see a future where we leverage personal AI assistants in all aspects of our workday,” he told PYMNTS. “Everything from critical decision-making to … even conversations like this.”

Behind the scenes, AI is finding wider adoption as a tool used to analyze transaction-level data, identifying patterns and eventually detecting anomalies that can uncover fraudulent activities, Jovanovic said.

“The ability to learn from historical data can enhance fraud prevention systems in real time,” he said.

The same transactional information and insight into spending patterns can help financial institutions craft powerful, personalized experiences delivered in the right context, at the right time, across voice and digital conduits, he added.

Examining the Risks

Beyond the promise and the excitement that surrounds AI’s use in the payments ecosystem, Jovanovic said that making those ambitions a reality is “somewhat constrained by the risks that are associated with the technology.”

There remain questions surrounding data collection processes and uses. There are still lingering impacts of so-called AI “hallucinations,” where the content and data returned by generative AI models are incorrect or misleading.

Jovanovic maintained that until more formal regulations emerge governing AI explicitly addressing security risks, the nascent technology will face hurdles when it comes to reaching its full potential within financial services.

In the year ahead, he told PYMNTS, the rise of open banking — particularly in the United States — will help govern how financial data is used and stored, through APIs and collaboration among stakeholders.

“Open banking in the U.S. is also going to boost competition for consumer relationships,” spurring financial intuitions and FinTechs to work closely together, he said. As the FedNow® Service gains more banking adherents, instant payments will be used in more retail and commercial transactions, in turn boosting the demand for AI-enhanced security.

“I believe we’re really only scratching the surface of the applicability and the use cases that we’ll actually see in the future,” he said.

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