Don't Wait to Innovate: Rodney Hood on the Risks of Delaying AI Adoption

From personalization and speed to cost reduction and scalability, artificial intelligence has much to offer the financial services industry. However, many companies still aren’t sure how AI should fit into their larger strategy — particularly when it comes to service and support.

According to Posh’s Board Member and former National Credit Union Administration (NCUA) Chairman Rodney Hood, this indecision could be costly.

Here’s a look at Hood’s unique perspective on AI and what financial institutions like yours can learn about overcoming common challenges.

Meet Rodney Hood

Rodney Hood has an impressive track record in the financial services industry. For the last 30 years, he’s held key roles in corporate responsibility and community development lending, supporting big names like JPMorgan Chase and Wells Fargo. He’s perhaps best known as Board Chairman at the National Credit Union Administration (NCUA), where he united regulatory compliance and technological advancements to help organizations innovate effectively.

“At the regulatory agency at NCUA, I got a chance to work alongside the other bank regulators at the FDIC, OCC and Federal Reserve,” says Hood. “They were working with their respective offices of technology and innovation.”

This naturally led to strong relationships in the fintech industry, where Hood encountered Posh. “I was impressed with Posh’s leadership and vision,” he recalls, citing the company’s emphasis on regulatory compliance in particular. “When the opportunity presented itself, I was elated to join the board I knew and respected.”

Now, Hood is a member of our Board of Directors — but just as importantly, he’s a strong advocate for AI that creates tangible value. He believes the technology can support financial institutions (FIs) with “member engagement, enhancement, and delight but also with regulatory activities,” illustrating that AI has a multifaceted role to play in the future of finance.

As a governance and guidance provider and strategist, Hood’s perspective is simple but powerful: “To say that you're indecisive about AI means you’re indecisive about the longevity of your institution.”

Customer and Employee Experiences, Today and Tomorrow

According to Hood, AI adoption is a solution with broad appeal. “I believe AI properly and strategically deployed can help all FIs,” he says. “It will allow them to go the extra distance, exceeding expectations.”

That’s not just because AI equips teams with the necessary data to respond more accurately and effectively. It also operationalizes back-office support, freeing up resources that allow more opportunities for strategic, thoughtful, and creative service. This enables benefits like cost savings and streamlined workflows. “In today's interest rate environment, FIs look to grow and strengthen their balance sheet. It's so important to cost-save, reinvest in their institution and invest in their customers,” says Hood. “Lots of efficiencies can help with the win/win for both customer and credit union. These products will help those FIs remain viable in today's economy.”

He also notes that AI is a crucial tool for ensuring ongoing compliance, calling it “an opportunity for growth” and “something banks and credit unions can learn from.” He explains that the key to success in this use case is due diligence. “[FIs] need to understand whom they’re partnering with and how the data is being safeguarded,” he explains. “It’s important to look at the upside of technology, but also the unintended consequences — not to be afraid, but to mitigate those risks.” 

While the current state of AI may be promising, Hood says there’s always more to look forward to. For example, as an advocate for financial inclusion, he notes that AI is a powerful tool for everything from simplifying financial access to creating customized strategies for every customer. “Tech is leveling the playing field,” says Hood. “No longer can multi-trillion banks go deeper — smaller banks can now have that opportunity. Tech is a democratizer of financial access.”

That’s just one more reason for FIs to prioritize AI adoption as soon as possible. “If you purposefully eschew AI, you're saying you want to remain stagnant and prevent members and your institution from growing in this environment,” he says. “Huge banks recognize the need to invest in these advancements — smaller institutions should see the same.” 

Challenges and Solutions: Making AI Work

While Hood points out many benefits of adopting AI as soon as possible, he also recognizes key challenges. The main hurdle, he explains, is that numerous businesses call themselves AI providers — so FIs need to determine which aligns with their mission and goals.

To start, Hood recommends questioning what you hope to gain from AI: “‘Why am I investing in it and what will it help me accomplish?’”

From there, he says FIs should focus on the “KYV” approach, or “know your vendor,” to find a partner matching your needs. This includes:

• Reviewing program interfaces.
• Discussing integrations or transitions with legacy systems.
• Asking for referrals and reading reviews.
• Understanding funding models and board governance.

Additionally, Hood says it’s important to address compliance topics. This includes asking whether a vendor is working with regulatory bodies, what governance model they’re following and how they’re adhering to it, how they safeguard data, and more. “I would caution against third-party vendors that aren’t working with regulators,” he adds.

How Posh Can Help

Hood says AI adoption doesn’t have to be challenging: “The main thing is for folks to do research, identify needs, and find providers like Posh.”

Unlike other providers, Posh balances AI excellence with robust regulatory compliance, meeting with regulators to ensure our solutions fit your needs. Posh's Intelligent Virtual Assistants provide a seamless environment for both customers and agents, leveraging multi-layered security and regulator insights to ensure every decision, response, and interaction is both safe and effective.

See for yourself why Hood says Posh is “truly an AI company in theory and application.” Request a demo today!