ARLINGTON, Va.—A new study reveals credit union leaders believe fintechs have an unfair advantage within the financial services market, but that some of those advantages are due to self-inflicted issues at CUs.
NAFCU's latest Economic & CU Monitor found 85% percent of respondents do not believe there is a level playing field between fintech and traditional financial services, with one respondent noting fintech companies do not contend with the same “legacy infrastructure, thinking, and cultural issues that drive inertia within an organization.”
“Despite competitive pressure, credit unions are actively seeking out new technologies to lower costs and improve efficiency,” NAFCU said in releasing its findings. “One emerging technology that has seen growing uptake is artificial intelligence.”
Focus on AI
Half of respondents said that they were using AI in some form within their credit union, and 21% indicated that although they were not current users of AI, they were planning to leverage the technology at some point in the future.
The monitor also noted that regulators have directed their attention to AI and have issued joint statements about the risks the technology could pose in consumer finance or its capacity to facilitate new forms of fraud.
“The CFPB in particular has been vocal about applying scrutiny to opaque AI models that might harbor biases that perpetuate fair lending risks,” NAFCU said.
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