Financial services are being forever and irrevocably disrupted due to artificial intelligence—and credit unions will never be the same because of it.

That is the message Dr. Ayesha Khanna, Co-Founder and CEO of ADDO AI, an artificial intelligence (AI) solutions firm and incubator, delivered during her Wednesday morning keynote presentation at the 2021 Virtual World Credit Union Conference.

Dr. Khanna said AI can allow credit unions to serve hundreds of thousands of unbanked people through alternative credit risk modeling, improve their compliance and governance models, and provide better security to members.

“It can be a member of your team and it can help you make informed decisions; it can help automate processes that are grunt work and you didn’t want to do anyway,” said Dr. Khanna. “You should really think of AI as, not a competitor to the task, but as a little personal assistant. If that’s the perspective you have, then you can stand on the shoulders of machines.”

Dr. Khanna recommended all attendees do their part by learning more about AI topics and mechanisms in order to be ready for the changes ahead.

Digital Transformation: A Global Case Study

The morning breakout sessions included a panel of specialists from credit unions in Brazil, Australia and the United Kingdom sharing case studies on successful examples of digital transformation.

Attendees learned:

• Lessons from building a digital mindset. 
• How a credit union can structure a digital transformation plan. 
• Showcasing technological results that benefit members.

“Very much our view is that you should be able to do everything digital and online as you would be able to do in one of our branches,” said Darren Stephens, Chief Transformation Officer at Heritage Bank Ltd., one of the largest customer-owned banks in Australia.

Camila Luconi Viana, a Digital Specialist for Sicredi in Brazil, and Paul McFarlane, Chief Technology Officer for Glasgow Credit Union in Scotland, shared similar sentiments in providing details on how their credit unions have digitized to better serve members.

This breakout session complements World Council’s Challenge 2025 initiative, which seeks to establish the digital transformation of the global credit union system by 2025.

Examining AFL/CMT trends

Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) is a rapidly moving area of regulation due to digital innovation and technology. Furthermore, the COVID-19 pandemic has created and exposed new and innovative ways that criminals are extorting the financial system.

A breakout session with three subject experts featured discussions on 2020 and 2021 updates to AML/CFT regulations and covered other topics such as Digital Identity, Beneficial Ownership of Legal Entities, and the Financial Action Task Force (FATF) emphasis on a risk-based supervisory approach—particularly in the area of digital transformation.   

“Credit unions generally generate lower risk because they know their members, often in person. Digital transformation may result in the loss of this personal knowledge of the customer, his financial and also, sometimes, his personal situation. Such lack of knowledge of the customer results in the disappearance of the factor that has, so far, mitigated the risk of money laundering in credit unions,” said Andrezj Lanc, an expert on AML with the National Association of Cooperative Savings and Credit Unions in Poland.

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