Let’s Get Serious About AI

0:03Welcome to Breaking Banks. I'm Jason Henrichs and I am your host and I am excited for this conversation. It isn't really about a chatbot, but we will talk about a chatbot. It's really about decision making because right now almost every bank and credit union in the country is pouring money into AI. And to be honest, the numbers say most of them can't prove it's working. So instead of asking, what tool should I use? We're going to sit down with two people who've actually had to make the calls. Where should they focus first? Should it be a build versus buy or a rent? And how, or rather, can you measure if any of it is actually working at this phase?

0:37Joining me are Bev Anderson, president and CEO of BECU, and Nadeem Homsani, who leads the AI strategy and innovation practice there. BECU is one of the largest credit unions in the country, which means Bev and Nadeem aren't just talking theory. They're actually implementing at scale. They're the ones who had to decide, with real member trust on the line, what getting serious about AI actually means. And if you like this conversation, catch Nadeem and our own Sam Ersob, SVP of Partnerships from Alloy Labs, live on stage at Money Live in Chicago, September 14th and 15th. Come say hello, bring your best argument that you wish had been made here.

1:17And now on Breaking Banks, let's talk about deciding what it means to get serious about AI. Bev, let's start with you. And as the backdrop, you know, there's lots of studies going around. I think the most widely cited from this year is 95 % of organizations are seeing no measurable return on their Gen AI investments, despite major banks pouring billions in. And only about 38 % of AI projects and financial services are meeting or exceeding ROI, right? So, like, this is a major impact. And I'm curious, when BECU began the journey and began thinking about AI, what was the impetus? Was it a board-driven thing?

2:02Was it something you saw, you know, as the industry was becoming writ large? But give us the context of the decision process that BECU began to go through. Absolutely, Jason. And quite frankly, I'd say it's a number of things. First of all, BECU is an incredible organization, 90-year history of serving members, serving communities, and doing a wonderful job driving impact. We are in the middle of this transformative journey of new tech, new process, people, all so that we could sustain the next 90 years of BEC's future, BECU's future, and do an even more incredible job driving impact. But we could see the technology changing right in front of our eyes and AI becoming such a critical factor in the way people thought about driving new capabilities, new productivity, new member value.

3:07And for us, it was an opportunity to leapfrog the work that we were already doing around transformation and grab a hold of new technology and create opportunity for ourselves and for our members. And that's what we saw. We were actually doing work with Nadeem and his organization at EarnUp at the time, kind of skunk works, a little bit on the side of everybody's desk. Yeah. And it was pretty cool. I could tell that there was something really interesting about bringing the best of what they were doing, which was already AI driven. Some of their thinking around financial management and inclusion and our 90 years of history and work in that same space around financial inclusion, financial access and well-being.

3:57And when there was an opportunity to just start to talk about, you know, should we bring these two organizations together? I think that, you know, created a path for Nadeem and myself to think more boldly. I'm curious, since you had the working relationship, how much was driven by we're on this path with BECU in the 90 years of trajectory? like, were doing something and then saw what Earnup was doing and said, we should bring that in, versus were they the light and saying, wait a second, that's the trajectory, right? It's kind of like one's a pull, one's a push. Or was it equal parts on how you came together?

4:36You know, I would be interested to hear what Nadim would say. I would say— That's the next question. Well, I would say that I approached him and said, you know, you know, Nadim, Maybe we should figure out a way to do more in a more committed way faster. I think at the same time, they were thinking about options, you know, for their organization. And we may have even sat down. I'm trying to remember exactly how this went. But we may have even sat down and talked about, is there a possibility here? So, Nadim, from your perspective in this dance, you earn up, being able to move fast at the speed of startup and that kind of latitude to begin to say, hey, we're going to attach ourselves to the benefit of a lot of members in trajectory and resources.

5:30but now you actually also no longer have the blank sheet of paper because you have existing customer expectations and those members, you know, expect something. You're very specific. You don't get that same latitude when you're part of the credit union where you'll be like, hey, we're in beta. Things break sometimes. You know, customers of banks and credit unions aren't used to the, hey, sometimes it breaks sometimes while you're pushing the frontier. How did you go through the thought process of saying, hey, we're willing to become part of this bigger puzzle? Yeah. So I think there's a couple different components to that.

6:12First of all, in terms of how the tie-up started to happen, just as a quick history, Earnup was a business that since 2013 was primarily focused on payments. Again, primarily actually in mortgage payments and then started to branch out over time. And we had a customer actually come to us and say, we have a group of customers who are mortgage customers and they're not creditworthy for another mortgage. Can you help them become creditworthy? And so we started, we had already started this Concord's project of creating this financial advisor. So it highlights, there was a good match between BECU and Earnup in terms of its mission-driven natures.

6:49Like we were focused on making customers or helping customers become more creditworthy. And that's something that BECU, just as a member-focused institution, is very focused on as well as helping people get to better financial health. So from that perspective, there is definitely a match. So that's the mission side of things. In terms of where do we go from there and what was exciting about BECU, you're a startup, right? And when you're a startup, you're kind of always fighting for the next customer. Like it's hand-to-hand combat. And it's not only business customer, but it's also like individual consumer.

7:28You know, in the first couple of days that we came over, I had to present to the organization, like what my vision of what my vision of like joining BEC was the entire BEC organization. I was like, this is a Goldilocks moment because we have an embarrassment of riches by joining BEC, which is totally true. Like 1.6, soon to be like 1.8 million members as a result of the merger. Right. Like, that's not something a customer set that we had at EarnUp. And so you ask about the blank sheet of paper and any potential anxiety that we might have had at that point in time in terms of having to be able to deliver this for them.

8:04We were super excited. We're like, hey, we can get this thing out and we can actually touch one from 8 million customers. That's more than we have. That's amazing. So we were pretty excited about the opportunity. So let's get into the application called Becca, which I love that little play with BCU in the name of the app. And I don't want to get into the specific feature function, except broadly, you're making people more credit worthy, helping with the financial wellness. But I want to dig into one of the things that we find within AlloyLab sometimes is banks have lots of customers who trust them.

8:39Same is true of BECU, like you said, with the 1.8 million customers to sell into. Getting them to buy in, even though they have a high level of trust with BECU, what does that process look like? Are you leading with AI? Are you leading with outcomes? Is there some hesitation around AI and how members engage with it? So it's early days. We have about 150 or so employee members that are using the product today. So determining whether and how people are engaging is very, very early days for us. but what we have if if we lead with the concept of people not having access to financial health to begin with and now there's an opportunity for you to have access to this financial health that traditionally was not available to us just say financial advice that's number one right so that's hey you can have something that you didn't have before and get to a better place and then number two for us is being able to show them where they are in their lives.

9:49That is in terms of capturing their data and being able to present them to them. And then number three is trust. I think that's like one of the biggest things that we've came to realization on and kind of already knew it was kind of like one of those aha moments, but we knew that already, which is you're going to be able to deliver effective financial advice, but only so much as the individual who's receiving that advice trusts you. So Bev, I think that's a great point for you to start pulling on. I want to start with actual trust at the board and organizational level, right? Because a lot of FIs start back office because it feels less risky, right?

10:25Let's go do some expense management, automate some tasks, you know, that will make Joe and Joanne more effective in their job by automating the mundane. You went straight to something that is member facing and AI still, being in the early innings, albeit with a lot of hype around it, did that give your board and your risk department pause? You know, let me actually back up and give you a little bit more context around this. Because for BECU, and I've worked at a lot of financial institutions, a lot of large banks, BECU is actually one of the most conservative organizations I feel like I've ever worked in.

11:07We started probably a year before we even started talking to Nadim. We started with an AI kind of policy governance framework with our board just to kind of get our heads wrapped around. There's new technology. We think we're going to want to be a part of it. Let's make sure we've got guardrails and ways of thinking about it that give us comfort, both as a management team and as a board. So we started there. Then the second piece was, we actually did start with something we call Monty, which is a productivity tool, is a knowledge management AI capability for our contact center. So we did it very quickly after Nadim and team joined us.

11:58We probably had Monty up and running in three months, something like that, and then moved very quickly to Becca because there always was a bigger idea, which is we do financial well-being better than anybody I've ever seen. And again, I've been in the space for 40 years. How do we take that? If I could, I'd put a branch on every corner across the country because our people, the people who talk to our members every day. They are the best I've ever seen at really bringing members in, building trust, and then helping them on their journey from financial access to financial freedom. That's what we do every day, and our people are the best at it that I've ever seen.

12:44We needed a way to scale that, not to scale wealth management, which is what some of the banks are doing, not to scale other pieces of their business model that they can monetize, but to scale the thing that people need the most. I need help getting on a path to my financial freedom, financial freedom for the masses. So we very quickly began the work on Becca, which is aggressive. It is progressive, but it is absolutely squarely within who we are trying to be, demonstrating this advice and guidance at scale, backed by the trust and members-first mentality, purpose-driven mission that BECU has every single day.

13:37Well, let's build on the theme of scale, and I'm not sure which one of you wants to answer first. Let's start with Monty. What was the human reaction to this tool being brought into the contact center? Was there an organ rejection? How did that rollout go? And where were the challenges and opportunities that you faced? I'll give this back to Nadine, but I just, there was one piece, there was one moment when I knew we were on to something. And that moment was, we were testing Monty with the contact center. We probably had 50 agents and they, and they were, and we had kind of weekly check-ins to see, and they gave us lots of great feedback.

14:17So the tool really, every week the tool got better and better. And at one point, one of the contact center leaders said or members who was doing the testing said, I love Monty and Monty loves me. All right. We've got one of those infamous relationships between the cyborg. Right. And what you have to think about is what they had to go through before Monty. Lots of hunting and pecking. Lots of scrolls of information that they then had to quickly, while they're servicing the member, they had to quickly sort of digest and figure out where's my answer in all of this. And now with a little prompt education, they're able to type in a question and here comes clarity.

15:04It was nirvana for them. I don't know, Nadine, what would you say? it's funny that we have a very similar experience i the the moment i of course you're nervous when these things go live and it was a it was a pilot with a smaller group of folks in the contact center and the um and exactly reading the text and it was actually bev who copied and pasted or or sent me a screenshot of somebody saying monty is my new boyfriend right and that was the that was the moment where i was like yeah we got this this is great i do jason our policy but overall good yeah yeah i just i do want to take a step back just for a second because you're asking questions about like how did this vision come like how did this vision come to fruition or like why did bsu make that take this step and it's like kind of outside looking in and then once you get inside it's kind of like inside yeah give me the inside baseball yeah just like after coming outside after after coming from the outside you know my early career i i would be like okay like Sure, personalities matter and CEO and whatever board, but at the end of the day, the culture of an organization is the culture of an organization that's going through it.

16:09Oh my gosh, how wrong could I be? Personalities matter. And this is, as much as we were at the innovative side of trying to create a personal financial advisor, this is Bev's vision too. We were demoing this thing and showing it to her and she's like, oh my God, this is a huge opportunity. This is so much about its vision of trying to deliver financial health in this manner and financial advice in this manner. And I really, she's been the exporter of that across the organization to the board, right? It's like, yeah, people are coming on board. They're getting there. But without that support, without that vision, I mean, she's AI-pilled in that sense as much as I am AI-pilled, if you will, like believing that this really can have a change to the world and an impact for our members and even beyond, hopefully.

16:58I think that's a really, really important component of the story, which is personalities matter.

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18:10You know where the industry will be. The only question is, will you be there too? To view the full speaker lineup, explore the agenda, and secure your place at Money Live North America, Visit moneylive-insights.com slash breakingbanks. All right. Side quest question that I now need to ask. Did you load Becca with a certain personality? Did you give it humanistic characteristics to say, be like this? Is there somewhere in this setup of Becca that says, be like Bev? I hope not. I grew up in Kentucky and swearing is our second language. So I hope Becca isn't that. It would be more human.

19:02We all aspire to be more like Bev. So, you know, it was just a natural, just natural integration into Becca. I will say this. I love what Nadim and his team are doing, which is they're spending time on the front lines with our contact center representatives and our folks in our, we call them neighborhood financial centers and our branches, listening to how they talk to members, how they engage, how they infuse sympathy. and they want to build that, like that BECU way into Becca. And I love that because there is, there is something differentiated about the way we show up with our members. And it is just, it's real and it's personal and it's authentic and honest.

19:55And Becca needs that. So I think the team spending time listening to and touching and feeling our frontline employees is a great opportunity for Becca to feel like BECU. Yeah, and joking aside, Jason, just to go a little bit step further in that, it's one of the things that the BECU culture does really well is leading from a place of empathy. So if you see like in the demos, when we show them internally to folks, somebody shows up and they're like, I'm having difficulty managing my money. Well, that person's being very vulnerable in that period of time. Money is such a taboo subject in our society.

20:36There's a lot of shame associated with the way that people manage their money. And so when somebody's showing up and saying, I'm having difficulty managing my money, you have to lead with empathy and you have to normalize the fact that this is happening to so many people in our country, right? More than 50 % of Americans are living paycheck to paycheck. So we really spend a lot of time ensuring that we're leading with that BECU voice, which is very empathy forward. Well, you know, there's a lot of research about people are more willing sometimes to open up to the machine rather than they're human because of the shame that you talked about.

21:15Have you experienced that realizing it's still in the early innings where people are more willing to engage because there is no stupid question as far as Becca's concerned? Yeah, we've definitely seen that. um we've seen other things too with it they definitely want more they want to move from a place like so once people realize that oh wow you have some of my financial information and i was coming here to get good financial advice and then they realize that you can start bringing more data to life they start to move to like what does this mean for me or tell me what this means to me so that's like that's a really important component of what we've seen thus far um they want becu to be an expert right uh so so in terms of the vulnerability that they're showing up but it's not like you just like talk to somebody on the street or something like that or talk to a friend even if you have a friend who's a financial expert right many times those conversations aren't happening because of the taboo and now they're actually showing up and saying you're an expert, give me that expert advice, right?

22:23So that is an important part of it as well. So people are asking the hard questions that they otherwise just wouldn't go get that advice from anywhere else. So I love this leading with empathy. InBev, you know, by all reports, every time we've interacted with the BCU executive team, that comes through loud and clear as like a shared core value. Do you have concerns now that you have a Becca and more of the machine that it's harder to kind of keep in bounds sometimes versus recruiting? How do you think about in a world that we're going to be shifting to an agentic conversation here, as the machine plays a bigger and bigger role, as Becca comes to play a bigger role, how do you think about making sure that culture is carried through?

23:16We have a saying that is digital first, human always. And now we've added digital first, AI enabled, human always. The human always is who BECU is. And even as we have expanded our digital capabilities and we are now transforming our digital capabilities, even as we are adding AI because we believe it will give us the ability to bring financial health and well-being to many, many more people, we will always, at the center of who we are, we will always be human-enabled. We will always have human beings that will talk to our members, sit side by side, help them on their journeys, hold their hands when they need that, Give them nudge and encouragement when they need those things.

24:09So I think it's embedded in who we are. It's cultural. And the one thing, you know, I've been in this CEO role for three and a half years now, almost four years. The one thing I said I never wanted to do was take BECU away from its roots of being members first, focused on, you know, serving our members with a level of human empathy that we believe is so germane to who we are and quite frankly, a point of differentiation for us. Nadeem, next question around this. Give me your unvarnished thoughts on how agentic begins to play a role and what needs to be true for members to actually trust an agent to be taking actions on their behalf.

25:06Is that on your roadmap? Does it feel inevitable to you? Agentic means lots of different. And so I'm like a mixed technologist and business person, right? So agentic means lots of different things to folks. And so let me just ask back, what do you mean by agentic? Because I just want to make sure I get the question right. Well, let me ask it, flip it back to you. When you look at the spectrum of agentic, and I think this will be very valuable to listeners, how do you define the buckets and which ones you say these are relevant and these are science fiction, at least for the time being? I think it's pretty hard to go science fiction at this point in time.

25:44I mean, I think we've seen so much from this technology in such a fast time that what those two years, let alone 10 years, look like from now, it's so hard to know. So I think the possibilities are wide, wide open. Around the question of what I think is possible and how do we garner that trust from our members, if I hear that question correctly. We really, really need to deliver. The best way to garner trust from our members is going to be able to deliver on the vision, right? So being able to create a budget for people, not just tell them that we can create a budget, but actually give it to them.

26:23Not just tell people that you're going to be able to manage your money, but actually manage it for them. And we talk a lot about delivering advice. And I think advice, I don't want to say it's easy, but it's straightforward. You can jump in to any one of the AI tools and put all in your financial information, at least some of it, and get a bunch of advice. And a lot of it is good. But really where the magic starts to happen is on the action side of things. And to your point about what does agentic mean in this context, what it means in this context is being able to automatically do things for people.

26:53So being able to automatically move money, automatically pay a bill, automatically tell you that, you know, get a notification on your Apple Watch and say, hey, this is outside your budget. Like you shouldn't be buying this or something like that. Having all of that automated and move to the self-driving car of finance or sometimes that's one expression I use. The other is like the big red easy button, right? Just bam, hit the big red easy button. Get it done. I think that's when we can deliver a lot of that. then I think trust will have finally jumped over the hump of garnering people's trust.

27:28So as we come to a close, Nadim, first question for you. At an individual member and user level, when you talk about the outcomes, how would you measure success? What are you looking for and say, when we've accomplished X, we know that Becca has been successful? So I think at the end of the day, like for me, that the number one metric in determining whether a product is a success is a net promoter score. Are like people going to go and recommend this product to other people in their family, to their friends? I think that's like if I had to focus on one metric, that would be it. However, I think there's a lot of other metrics, right?

28:11One is, are we attracting new members to BCU? right? It's like, so we're delivering financial health and now people are saying, wow, this is a member's first organization. This is a not-for-profit. They actually do have my interests at heart, right? If we can start pulling people in as a result of being able to deliver Becca there, that's great. I think if we start to see people in society in general, being able to have better financial health, I'm sure there's like some societal metrics that we can think of and measure, but like one of the visions that we have with Becca, one of the visions that Bev has with that guy, being able to deliver financial advice to people who otherwise couldn't afford it.

28:49And that's like 99 % of society or like 98 % of society. So if we can just get the penetration of financial advice to a broader set of communities, our communities, Gimmar community, financial institution, as well as other communities, I think that's a huge success too. Dev, Nadim stole a part of your thunder here, but how do you think of success of the program, The part business guy came through there and teeing up not just the technological, but when you look to your annual report and not just the words that will be on the glossy page, but what are you going to stand by and say, we'll have been successful, this was worth the investment?

29:29Note, I didn't say the ROI, but worth the investment. What are those metrics and how do they cascade? I'm really going to build on what Nadim just said. I believe truly that BECU and by extension credit unions have an opportunity to reshape financial services in the U.S. through a tool like BECCA. I believe that we have the opportunity to give to people, people who cannot afford it, people who don't have an avenue, a tool that helps them truly understand where am I today financially and where do I want to be? How can I achieve my dreams? And Becca is the way that will help them, you know, get on a path to achieve those dreams.

30:21And then the measurement is the level that this thing goes viral because people are telling their friends, oh my gosh, I'm using Becca. It's, you know, insert the thing that you would, you know, that you think about when people say, oh, have you ever done X? Becca is that thing. And you've got young people, people across the socioeconomic spectrum, people who have never had access, all of a sudden really saying, I'm getting the help I need. I'm in a better place. My family can afford our dreams because we have a tool that has changed our lives. That to me is what I think. I think this is big enough to create that future.

31:10And that's what I'm asking us to try to do. Well, that is a fantastic vision. Thank you both for coming and sharing both the BECU and the VECA vision and where this is headed. And I hope that that vision you just outlined, Bev, is the one that comes to fruition, that this does become the great equalizer and can help actually bring financial health and wellness, which has long been, I think, a vision of a lot of credit unions where we frankly struggle to deliver the results because it is such a thorny problem. Thank you. We're excited about it. Thank you both for joining today.

31:56This episode was produced by our US-based production team, including producer Elizabeth Severins, audio engineer Kevin Hersham. If you liked this episode, don't forget to tweet it out or post it on your favorite social media. Or leave us a five-star review on iTunes, Google Podcasts, Facebook, or wherever it is that you listen to our show. Those actions help other people find our podcast. And in return, that helps us build an audience that can be supported by sponsorship, so we can continue to provide you with our award-winning content every week. Thanks again for joining us. We'll see you on Breaking Banks next week.