Benjamin Maxim
Feb 28 5 min read

Let The Bots Do It!

Let The Bots Do It!

Ben Maxim joined MSU Federal Credit Union in 2007 and currently serves in a dual role as Chief Digital Strategy and Innovation Officer for MSUFCU and as Chief Operating Officer for MSUFCU’s wholly-owned CUSO Reseda Group and its subsidiaries. He is responsible for assessing emerging business trends and technologies, providing strategic direction for existing and future digital channels, and facilitating innovation throughout the Credit Union, including leading their innovation center, The Lab at MSUFCU. Additionally, Maxim is responsible for engineering, product, sales, and growth at Reseda Group. He received his bachelor’s degree from Michigan State University and a professional certificate in Innovation & Entrepreneurship from Stanford University. He completed Filene's i3 Innovation Leadership Program in 2023. Maxim was honored to be selected as the 2022 Technologist of the Year by Finopotamus. He also serves as a board member and advisor to several fintechs.

In 2023, the financial industry faced a difficult time due to the rising rate environment. The Fed rate was at a 20-year high, making it challenging for financial institutions to attract expensive deposits. Additionally, loan demand was not keeping pace, which put smaller institutions, particularly those under $100B in assets, at a disadvantage as they could not outspend the big banks and super regionals. So what are community financial institutions, like credit unions, supposed to do to keep pace? Well, the answer is quite simple, let the bots do it! Automation has been driving technological advances and has been the driver of the four industrial revolutions since the 18th century. Technologies such as Chatbots, Robotic Processing Automation (RPA), and Generative AI are the new future of the financial industry. 

The First Industrial Revolution began in the 18th century through the use of steam power and mechanization of production. The Second Industrial Revolution began in the 19th century through the discovery of electricity and assembly line production. The Third Industrial Revolution began in the 1970s in the 20th century through partial automation using memory-programmable controls and computers. We are currently implementing the Fourth Industrial Revolution. This is characterized by the application of information and communication technologies to the industry.

This could not have been more obvious to me when walking around the expo hall at the Consumer Electronic Show (CES) in January. The overwhelming themes were AI, Automation, Mobility, and Robotics. There were robots to do everything! Most likely to give us more time to play with all the new cool video games and stream on the biggest, most micro-pixel-dense TVs. The bots were on full display, whether they were simply in the background doing AI things, like computer vision to ensure there was no waste at a food service hall or more visible robots like zero emissions EV automated farming or mining equipment. Growing up and living in Michigan, my most exciting find was the robot snow blower by Yarbo. 

Okay great for “the industry”, but what about the service industries like finance? We, too, have been using technology to advance our industry. Just think about how people interacted with their money and their financial institution before the ATM or the credit card. Now we can set up direct deposit to get our money where we want it. We can even deposit the birthday checks from Grandma using our mobile app! We have adopted various forms of automation to enable our branch employees to shift from simply accepting transactions to becoming financial consultants. Our members can come to chat with them whenever they face difficulties in self-serving, such as buying a car for the first time. We started with defining repeatable processes for humans to follow before stepping into these automations. This was the first step to automation and still is, we cannot automate and use artificial intelligence without a defined set of rules. Generative AI hopes to change that, but is still primarily operating based on “what was”. 

Business Process Outsourcing (BPO) is our hack to do that at a low cost and reap the benefits of automation immediately. Due to the pandemic and near full employment in the U.S., many companies are finding it difficult to hire new staff. As a solution, some firms are offering Business Process Outsourcing (BPO) services that allow staff augmentation for automating simple, repeatable legacy processes. This can include tasks such as transferring application data from a Customer Relationship Management (CRM) system to a legacy Core Banking platform or funding loans that typically require an individual to access multiple systems.  BPO can also extend working hours and take care of backlogs of work that employees typically face after a long holiday weekend or first thing in the morning. BPO is the first step in this automation and allows for a financial institution to have a quick win in increasing its operational efficiency. 

Following BPO, or if you are ready you can skip straight to, RPA, AI, or automated workflow systems that allow for varying levels of automation. RPA tends to be your quick option, allowing for those in the business domains to do their automation of processes that allow them to transfer employee responsibilities to more complex decision-making roles that truly require human intelligence. Other forms of automation tend to be requested of technology teams and simply due to the nature of how these implementations work, tend to be the longer-term play, but can often produce the best results. It is best to save these automations for business processes that will generate the most value over time.   

We at Michigan State University Federal Credit Union (MSUFCU) rolled out a conversational AI in 2019 to improve service hours to 24/7/365. The AI was introduced to help manage live chat volumes, which exceeded our capacity to hire and afford enough employees to serve our growing member base effectively. The conversational AI has been in operation for over four years now, and it is currently doing the equivalent work of more than 55 full-time employees. This has allowed us to redirect human resources to other areas that require human intelligence, helping us to improve our efficiency metrics without the need to hire from outside. 

Technology is here to enable humans to do what we do even better, so let’s let the bots do it!

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