Seize the Moment: Why AI Adoption Can’t Wait in Banking

The banking industry, like countless others, is undergoing rapid transformation, and AI is the catalyst. Yet, while many institutions are embracing AI, others are hesitating — and that hesitation comes with significant risks. 

This critical moment was the focus of one of our sessions at our recent Posh Conversations 2024 event, where we discussed the urgency of adopting AI and how to overcome the barriers preventing some institutions from moving forward. Our panel hosted a number of industry experts, including:

• Barbara Yastine, Former Chair, CEO & President of Ally Bank; Alkami Technology Board Member
• Rodney Hood, Former Chairman, National Credit Union Administration (NCUA)
• Bill Snider, Chief Strategy & Innovation Officer, Clearview Federal Credit Union
• Kathy Sianis, Vice President of Financial Institutions Strategy and Advisory at Posh

The key takeaway? AI is no longer optional; it’s essential for survival in the fast-changing financial landscape. Here’s why you need to seize the moment on AI.

Why Delaying AI Adoption Puts You at Risk

Financial institutions that hesitate to adopt AI are setting themselves up for failure. The risks are clear: operational inefficiencies, loss of market share, and an inability to meet evolving customer expectations. As Rodney Hood noted during the webinar, "If financial institutions aren’t embracing technology like AI, they risk losing their relevance."

Competition is fiercer than ever, with fintech companies and early AI adopters leveraging technology to gain a significant edge. "The use cases are too profound to ignore," Hood added. AI helps banks and credit unions offer faster, more personalized services, and institutions that fail to keep up will struggle to retain customers.

Bill Snider was direct in his assessment: "If you bury your head in the sand and think that this is just a passing thing, you won’t be around in 5 or 10 years." The bottom line? AI adoption is a must if financial institutions hope to stay relevant and competitive. So how do they start?

Sometimes, Big Gains Start With Baby Steps

It’s natural for institutions to feel apprehensive about adopting new technology. However, as Snider pointed out, "You can take some baby steps to get there." Starting small, with low-risk AI tools such as chatbots or AI-powered search functions, allows financial institutions to dip their toes in the water without overwhelming their teams or budgets.

"Start small, test it out and make sure everyone is comfortable with it," Snider advised. This approach enables institutions to experiment with AI, gather valuable insights and make data-driven decisions before committing to larger, more complex projects. 

Incremental steps not only reduce the fear of adopting new technology but also help institutions learn and grow at their own pace. Hood echoed this sentiment, saying, "The baby steps, incremental steps with Posh again, are a great way to start."

How Banks and Credit Unions Can Overcome Barriers to AI Adoption

One of the most common barriers to AI adoption is the perceived cost. However, AI offers long-term savings by automating routine tasks and freeing up employees to focus on more complex, value-added work. 

Barbara Yastine introduced the concept of "cost redeployment," explaining that AI allows financial institutions to shift resources from operational tasks to areas that enhance customer experience and growth. "It’s a cost redeployment lens," Yastine noted. "You’re taking money that you no longer need to spend because you’re using AI and redeploying it toward customer experience, growth and innovation."

Creating a Culture of AI Readiness

Another major barrier to AI adoption is internal resistance. Leadership and staff may fear that AI will replace jobs or disrupt established workflows. However, overcoming this resistance is crucial to AI success. Engaging leadership early and educating staff about AI’s benefits can alleviate concerns and build a culture that embraces innovation.

Rodney Hood emphasized the importance of board engagement, stating, "Make sure that your policies allow for AI adoption and that you've engaged your board in the process." By getting senior leaders on board and ensuring that AI aligns with the institution’s strategic goals, financial institutions can foster a more receptive environment for AI integration.

A Simple Roadmap for AI Adoption

To make the process of AI adoption less daunting, here’s a simple roadmap to follow:

1. Start with internal AI use cases: Internal employee-facing tools help workers gain confidence with the tech while streamlining operations behind the scenes.
2. Scale to customer-facing solutions: Gradually introduce AI to customer interactions with Digital and Voice assistants to elevate the customer experience and service efficiency.
3. Engage leadership and the board: Ensure alignment with the institution’s strategic goals and secure buy-in from senior leaders.
4. Ensure compliance and data security: When selecting AI solutions, prioritize compliance with regulations and the protection of customer data.
5. Measure success: Track key performance indicators (KPIs) such as operational efficiency and customer satisfaction to assess the impact of AI.

By starting small, focusing on customer expectations, and engaging leadership early, financial institutions can overcome the barriers to AI adoption and position themselves for long-term success. 

Don’t wait. Seize the moment and partner with AI experts like Posh to begin your AI journey today.

Want to learn more about AI and banking first? Watch the full webinar for expert insights across a range of AI topics.