Report: Without AI, credit unions risk losing members / THE Special Feature / CUToday.info

NEW YORK — For years, many credit unions have viewed artificial intelligence as the next frontier in digital banking. But for many of our small business members, the future has already arrived.

Small and medium-sized businesses (SMBs) are increasingly looking to their financial institutions for AI-powered financial guidance, according to a new release in the PYMNTS Intelligence Credit Union Tracker series produced in partnership with Velera. Rather than futuristic automation, AI-powered financial guidance is a practical tool that helps you manage expenses, monitor cash flow, build budgets, and make smarter business decisions. The findings suggest that unless AI moves from strategic discussions to actual implementation, many credit unions risk falling short of member expectations.

According to the study, 75% of small businesses say they will use at least one AI feature from a financial institution within the next two years, compared to 59% of consumers. Demand is even higher among large enterprises, with 83% of companies with annual revenue of more than $1 million expressing interest in AI-enabled financial services. Profitable companies also showed significantly higher interest than weaker companies, highlighting the potential of AI as a member retention and business development tool.

Automation guidance

Perhaps the biggest takeaway is that business owners aren’t asking credit unions to replace human decision-making with machines. Instead, they are looking for AI to simplify day-to-day financial management.

The study found that 31% of small businesses are interested in AI-powered expense tracking, and about one in five want help with budgeting, managing cash flow, finding suppliers and comparing financial products. Companies overwhelmingly prefer AI that acts as an advisor, helping organize information and providing actionable insights, rather than autonomous systems making financial decisions.

The report notes that this reflects broader market trends. Goldman Sachs research shows that while most small and medium-sized businesses are already using AI in some capacity, relatively few have fully integrated the technology into their operations, suggesting that adoption remains focused on solving specific business problems rather than large-scale automation.

opportunities and gaps

The survey results also reveal a growing disconnect between what business members want and where many credit unions are investing. Almost half (49%) of credit unions surveyed see AI and conversational assistants as tools to attract new members, and 60% identify personalized digital experiences as a key growth driver. However, AI agents only ranked 9th out of 13 innovation priorities, suggesting implementation efforts continue to lag behind strategic awareness.

This gap is likely to become increasingly problematic as small businesses become accustomed to AI-enabled experiences elsewhere. The report warns that digital experience is becoming a key factor that businesses use when evaluating financial institutions, and that AI is no longer a future differentiator, but a new competitive necessity. Research shows that some credit unions are already losing members to digital friction, which could be addressed with improved technology.

However, industry progress is accelerating. Citing a study by Cornerstone Advisors, the report notes that chatbot adoption among credit unions has increased from just 3% in 2019 to 46% by 2026. PYMNTS Intelligence predicts that nearly half of top credit unions will offer AI chat and financial advice capabilities by 2029, with adoption rapidly spreading to smaller and smaller financial institutions.

Start small and build trust

The report argues that credit unions should first focus on practical applications for members, rather than attempting a complete AI transformation. Conversational AI, budgeting assistance, and expense management tools are logical starting points because they address immediate business needs while allowing institutions to gain operational experience and member trust before introducing more advanced features. Researchers describe this as a “ladder of trust,” and say members are most enthusiastic when AI provides advice and recommendations, rather than making financial decisions autonomously.

The report also encourages credit unions to view AI as part of a broader digital modernization, rather than a standalone initiative. Cody Banks, Velera’s senior vice president of product experience and enablement, advocates what he describes as a “chisel versus sledgehammer” approach, making targeted technology upgrades rather than replacing entire systems. Velera points to its Atmos platform as an example of an infrastructure designed to help credit unions integrate AI capabilities while leveraging existing data and systems.

partnerships matter

Relatively few credit unions have the resources to build advanced AI capabilities on their own, so partnerships are expected to play a central role in implementation.

The report states that collaboration with CUSOs, fintechs and technology providers can significantly shorten implementation timelines while reducing implementation risks. As a CUSO, Velera said it provides a shared technology platform and embedded intelligence designed to help agencies accelerate AI adoption without rebuilding core infrastructure.

Elizabeth Wadsworth, vice president of decision intelligence and transformation at Velera, said successful institutions will not necessarily be those that adopt AI first, but those that leverage it most effectively to guide members through increasingly complex financial decisions.

The broader message from this report is clear. Small businesses are no longer asking if their credit union offers AI-powered services; they are increasingly expecting AI-powered services. The challenge for credit unions isn’t just keeping up with the latest technology trends. We provide practical financial guidance that helps business members make better decisions today and lays the foundation for more advanced AI capabilities tomorrow.