Ep 143: AI Innovation for Financial Regulators

Artificial Intelligence (AI) has rapidly transformed numerous industries, and the financial sector is no exception. Its potential to revolutionize financial regulators’ operations, enhance customer service, and optimize lending decisions cannot be underestimated. In this article, we will explore the impact and implications of AI in the financial regulatory landscape, examining how it can benefit business owners, decision-makers, and individuals alike.

Shaping the Future of Financial Regulation:

AI innovation is set to bring about significant changes in the way financial regulators operate. By leveraging generative AI and large language models, regulators can streamline processes, make data-driven decisions, and enhance fraud detection. This means that both financial institutions and their customers stand to gain from improved compliance, more accurate risk assessment, and enhanced consumer protection.

Improved Lending Decisions:

With the infusion of AI, lending decisions are becoming more accurate, faster, and fairer. Financial regulators can now go beyond traditional credit scores and gain deeper insights into a borrower’s creditworthiness. By analyzing an individual’s financial behavior, patterns, and even social media presence, AI can help assess lending risks more accurately, opening up opportunities for individuals who may have been overlooked in the past.

Enhanced Customer Service:

AI-powered tools and technology are transforming customer service in the financial sector. Chatbots and virtual assistants are revolutionizing the way banks and credit unions interact with their customers. Language translation capabilities allow financial institutions to provide services to individuals from diverse backgrounds, ensuring inclusivity and breaking down barriers. Additionally, AI enables prompt and accurate responses to customer queries, improving overall customer satisfaction and driving brand loyalty.

Embracing Responsible Development:

While the possibilities offered by AI are immense, it is essential to approach its integration into financial regulation responsibly. Striking the right balance between innovation and ensuring data privacy, security, and ethical use of AI is crucial. Proactive regulatory measures must be in place to address potential risks, detect fraud attempts, and safeguard against algorithmic biases.

The Economic Implications:

The widespread adoption of AI in the financial regulatory sphere will have far-reaching economic implications. By embracing AI, businesses will be able to optimize processes, make smarter lending decisions, and improve customer service, leading to increased efficiency and profitability. Furthermore, as AI drives innovation and transformation, it will create new job opportunities, ranging from AI developers to cybersecurity experts, ensuring the growth of the AI industry.

Conclusion:

The integration of AI into the financial regulatory landscape presents exciting opportunities for businesses and individuals. As we witnessed with the advent of the Internet, AI has the potential to significantly reshape the economy, drive growth, and foster financial inclusion. By leveraging AI’s power, financial regulators can enhance compliance, improve lending decisions, and offer personalized customer experiences. Embracing responsible AI development will be key to ensuring the maximum benefits for both businesses and consumers.

Topics Covered in This Episode

1. Generative AI and the financial sector
2. How AI innovation will change financial regulators
3. Public perception and future of generative AI
4. Use of generative AI in credit unions and financial services

Podcast Transcript

Jordan Wilson [00:00:18]:

How is AI innovation going to change things for financial regulators? It’s something if you’re not in the industry, you probably don’t think about it a lot, but it’s actually going to impact us a lot more than we think. And I’m excited to talk about that today on Everyday AI. This is your daily livestream podcast, free daily newsletter helping everyday people like you and me, not just and Learn generative AI and what’s going on, but how we can all leverage it and understand how it impacts our daily lives. So if you’re joining us live, as always, thank you for that. Make sure to get your questions in. We have a very special guest today that I’m excited to have on the show. If you’re listening on the podcast, don’t worry. You can always come in and join the conversation after the fact.

Daily AI news

Jordan Wilson [00:01:02]:

Check out, check out the show notes that we always include, in the podcast. Come back, ask questions, interact, after the fact. So, let’s let’s get started today with the AI news as we do every single day. Some some big ones today. So, how competitive do you think talent is for top AI execs? Well, according to a recent report, we’re talking pro athlete type money. So according to a recent report from Insider, OpenAI is offering compensation packages of 5 to $10,000,000 To entice top Google AI researchers. That was not a a misprint. I did not, miscommunicate that.

Jordan Wilson [00:01:44]:

That is true. 5 to $10,000,000 compensation packages. So, the company reportedly has already, OpenAI, has reportedly already hired nearly a 100 people away from Google and Meta. And, job listings for OpenAI are showing salary ranges of anywhere from about a quarter $1,000,000 to a half $1,000,000 a year For research engineers with additional benefits and equity. When I read that, I was like, woah. Okay. That’s like actually more than some pro athlete money. Alright.

Jordan Wilson [00:02:14]:

2nd piece of news for the day. Microsoft stock hit an all time high late Friday as it prepares for its Ignite conference this week. So Microsoft stock reaching all time high as the company prepares to announce some pretty exciting, artificial intelligence, announcements at a conference that starts Actually, tomorrow, the Ignite conference starts tomorrow in Seattle. So so what are they supposed to announce? They’ve already started rolling out their Microsoft 360 and 5 copilot, which kind of drops generative AI across the operating system. But it has been widely reported, but not confirmed, That Microsoft will unveil its own AI chip code named Athena. And Microsoft’s new reportedly new AI chip, Athena, We’ll reduce their reliance on NVIDIA and give them a little more control over their AI infrastructure. So some pretty, Noteworthy things going on in the world of AI, but that’s probably not why you’re here. You probably tuned in Live or are listening on the podcast because you care about AI innovation for financial regulators.

About Kyle and the National Credit Union Administration

Jordan Wilson [00:03:22]:

So that’s what we’re gonna talk about, and I’m extremely Excited to have on the show, and please help me welcome. We have Kyle Hauptman, the vice chairman for the National Credit Union Administration. That’s a government agency y’all. So, Kyle, thank you for joining us on the show.

Kyle Hauptman [00:03:37]:

Thank you, Jordan. I like listening to the news updates too.

Jordan Wilson [00:03:41]:

Thank you. Yeah. Big big stuff happening. You know? I apparently, I should have, as a kid, given up on my MBA dreams and just, Gone into generative AI earlier at the time. But probably

Kyle Hauptman [00:03:52]:

I had MBA dreams too, but, I didn’t have to give them up. The world just gave them up for me. You know, I just didn’t have the ability, but I use that expression too about, NBA, NFL money sometimes when talking about, the more complex and harsh a regulatory scheme is, the higher the market value For former regulators. So if regulators are doing their job well, there shouldn’t be a massive market To pay to navigate the system. That means the system’s not that good. Right? Anyway, you mentioned the m pro athlete money, and it was remind me of that.

Jordan Wilson [00:04:30]:

Oh, yeah. Same same with me, Kyle. Something about I stopped growing in 8th grade didn’t help. Yeah. But maybe, yeah, maybe tell us a little bit about, you know, your work at the National Credit Union Administration. Just just so people know because, yeah, it it is confusing, but it’s a government agency. So just give everyone a high level overview of that.

Kyle Hauptman [00:04:47]:

Short answer is if you know what the FDIC is, for banks, that is essentially what NCUA is for America’s, 4,600 credit unions. We are an insurer. If you have a bank account or, if you have an account or a credit union, it’s insured up to $250,000 per account, exactly the same as FDIC insurance. And we’re also the regulator for about 2 thirds of the credit unions. For about a third of the credit unions in America, We are just their insurer like FDIC is for banks, and then for 2 thirds, we are also their regulator.

Jordan Wilson [00:05:21]:

So, you know, and I’m I’m not even sure of this. I’m learning along live with everyone else, but, you know, how is the National Credit Union Association, or Are you all using generative AI internally? Is that not you know, are there too many kind of, you know, pieces of red tape to go through? I mean, how does that work in government season and using AI because it’s obviously important, but there’s a lot to to regulate.

Kyle Hauptman [00:05:44]:

By the way, it’s administration, not a Yes.

Jordan Wilson [00:05:46]:

Oh, sorry. Thank you.

Kyle Hauptman [00:05:47]:

Thank you. But that’s the thing because, there’s a trade group that has similar letters, and people confuse it with that. Well, I I am a government employee. So, anyway, I mean, it’s we’re still in, you know, top of the first inning. If you don’t follow baseball, that means the very beginning. But, So I think the most obvious use for us as a regulator will be anti fraud, fraud detection. I know we’re talking about it. I don’t know as of yet today we’ve actually launched it.

Kyle Hauptman [00:06:14]:

But either way, we’re not gonna talk that much about it the same way that entities in general don’t go into detail on their cyber defense an antivirus software. You know? You don’t tell people exactly what you’re doing. But but that’ll be thing 1. But Quicker than us using it as an as a government agency are the entities that we regulate and insure. America’s credit unions, they’re already using it For a whole bunch of cool ways, including their own fraud detection because, you know, that’s a major issue for them.

GenAI and financial regulation

Jordan Wilson [00:06:48]:

Yeah. And, obviously, you know, in this, in the financial sector, you know, people some people know, some people don’t, but AI is not exactly We knew it’s it’s been used for for many decades in the financial sector, but how does the generative AI aspect and, you you know, when you start talking about Large language models and and things of that nature.

Kyle Hauptman [00:07:08]:

Yeah.

Jordan Wilson [00:07:09]:

Has that changed the game for financial regulators, you you know, just broadly speaking?

Kyle Hauptman [00:07:15]:

The the main thing is credit unions and banks for that matter just have to do what they’ve always done, which is adapt. No credit union or bank in America can operate the way they did 30 years ago, which is no website, no online bill pay, no mobile app. Right? Had you been frozen in time, or had your regulator made you, frozen time, or didn’t say you couldn’t use this thing called the Internet, But was really negative every time it came up. Right? Well, those people would all be gone, and that regular insurer would be bad at their job. So I I think you agree that CACFPT, last November 30. Right? We’re coming up on 12 months now. That was a game changer because, like you said, AI itself Has existed for a while. I know the US government uses it in a bunch of levels and probably tons of ways I don’t know of.

Kyle Hauptman [00:08:02]:

NSA uses it to monitor, Al Qaeda cells and see if there’s any patterns, predicting terrorist attacks, that kind of thing, AI. But normal people sitting at home, middle class people and regular small businesses Weren’t using it because there wasn’t a consumer, useful front end. So ChatGPT all of a sudden for free was something to play around with that regular normal Americans can use on their phone or on their desktop, and it wasn’t just, you know, for the military and big business. This reminds me of the Internet itself was around for a while, And you didn’t have a front end, a browser, or even AOL, right, so that could tap into the power of it. You know, like the Pentagon had said, other people were using the the Internet, the actual piping. But then at some point in nineties, it wasn’t as, it wasn’t one day like tech gpt. But this thing happened where we have front end browsers. You know? We had our Netscape browser, or you had something like AOL.

Kyle Hauptman [00:08:58]:

And all of a sudden, this technology that had been around for a while was now usable by everyday Americans and everybody around the world. And, you know, if you’re old enough, you couldn’t go a week without getting, like, 2 of those AOL disks in your, a lot. Those. Yeah. But, anyway, there’s a front end, and now it’s explosive. We’re talking about it. Right? Literally 1 year ago today, November 13, 2022, I don’t think we would have had this conversation the same way Because that was a a bombshell, chat gpt. And I played around it.

Kyle Hauptman [00:09:34]:

You know, as a regular, we we write regs and we write guidance. That’s all we do. Right? And I’m just to start, I I just think anybody that has to write things, I just feel like it’s eliminated writer’s block. If you can just say, alright. Just spit something out and then hit refresh and try again. And you don’t sit there with a blank word doc. You know, it’s hard. You know how people procrastinate because they can’t get started? For that matter, important emails.

Kyle Hauptman [00:09:59]:

Like, okay. How do I start? What do I do here? You know? I I think it’s super cool, just internally, But mhmm. I just threw a lot at you. Sorry, man.

GenAI’s impact on US economy

Jordan Wilson [00:10:07]:

No. No. I love it. You you know, Kyle, one thing you mentioned there that that that I wanna dive a little bit deeper in is you kind of talked about, the Internet and and kind of what that meant for the economy at large. So how do you think, you know, even if we’re talking about it from a a US and Perspective. Right?

Kyle Hauptman [00:10:23]:

Yeah.

Jordan Wilson [00:10:24]:

How how do you think that generative AI, will impact the economy, you you know, and kind of drawing on that parallel of of what the, you know, what the Internet did for the US economy. Is it going to be similar where generative AI is really Driving the economy forward.

Kyle Hauptman [00:10:41]:

Yeah. I I think listen. All technology that’s widespread That is disruptive. It wouldn’t be disruptive if it didn’t have some negatives. And but my view, you know, policymaker and before I was at NCUA, I worked at just in the US senate, the bank comedian. We had a broader purview there. So if I just put on my American, hat here. We have the potential to dominate it.

Kyle Hauptman [00:11:07]:

We have the potential to get all the negatives. I’m sorry. All the puzzles. We’re gonna get the negatives no matter what. Okay? Every new technology has negatives, and people say, oh, I’m worried. Yep. Yep. You probably should be worried.

Kyle Hauptman [00:11:20]:

What what matters is how much of the upside we get. You know, I would say, you know, do you know there were 0 plane crashes Before we have plans.

Jordan Wilson [00:11:29]:

Good point. Yeah.

Kyle Hauptman [00:11:30]:

We’re not you can read the entire old testament, new testament. There’s not 1 auto crash. There’s not 1 Internet virus, and these are all negatives. Right? We’re gonna get the negatives anyway, and there’s not a whole lot you can do about it. The question is how much upside do you get? And and even the negatives can produce good jobs. For example, antivirus software. Everywhere in the world has to deal with Internet viruses. Everyone in the world has to deal with cyberattacks.

Kyle Hauptman [00:11:55]:

Hey. It’d be great if that didn’t happen, but it does. But only in some places in the world get paid for a high paying Cybersecurity industry and a high paying antivirus software industry. So, you know, with the Internet, we capture the most upside, and I credit, 1997, Bill Clinton out of war. I think it was an important moment. They put 5 principles for this new thing called the Internet on white house .gov, a website that had only existed for 2 years. And it was from, you know, from upon high, number 1, the private sector shall lead, etcetera. And listen, we got all negatives.

Kyle Hauptman [00:12:25]:

Right? We lost all of our video rail jobs and, and, travel agents and all that. Right? But guess what? Canadians and Mexicans also lost their video rental jobs, but they don’t have Netflix headquarters, Hulu headquarters, The employees that got in early and got stock options and changed their life, the early investors that got huge returns, the endowment funds and pension funds that invested in Those venture capital funds, the worst thing with disruption is to get the negative and not the positive. So I would like us to replicate our success with the Internet, not try to think we know it all and recognize that, yes, there’s going to be negatives. And The question is how much upside, and Americans certainly are positioned to capture more upside than any place else.

Jordan Wilson [00:13:10]:

You you know, I love I love what you said there, Kyle, about You know? Yes. There were there were 0 plane crashes, you know, when you go back, you know, hundreds of years. Right?

Kyle Hauptman [00:13:21]:

We went thousands of years and Without a single one.

Public perception of GenAI

Jordan Wilson [00:13:24]:

Yeah. But I think I think even when you talk about, kind of the the general perception of of AI, it does seem that there’s this Kind of overwhelmingly negative perception, but, you you know, you just kind of likened it to the the Internet. Right? Yeah. So I’m I’m I’m curious from a financial regulation perspective. Can you talk a little bit about the public perception specifically generative AI. Are are are, like, are people excited about it? Do they not understand? Or do are they saying exactly what you’re saying? This is our Internet moment to, as a country, you you know, leverage this technology and push our economy forward.

Kyle Hauptman [00:14:05]:

I think it’s gonna be like, if you try to talk to, You know, a 12 year old or even somebody in high school right now, even the terms we use don’t make any sense to them. Like, How do you return a movie to Netflix? Right? Like, even the words it it’s not like we got a cheaper deal and, you know, Rewind it before you how do you what do you mean? How do you rewind it? What are you talking about? Like, the terms don’t even make any sense anymore. I think we agree that a lot of things are gonna be like that, Like, just the way we speak about these things. And so there’s already been any high credit unions, for example, online lending, right, doing more advanced underwriting than just using your FICO score. So some really, really neat stuff, and that’s already been happening. But The one advantage that I think AI has over another newish industry, blockchain, digital assets, crypto, is that Regular people are gonna use things like Chat TV team, make their life easier. So you can’t just say it’s all negative. You can say there’s negative aspects.

Kyle Hauptman [00:15:10]:

That was an advantage the Internet had. Your 1st White House staffers, etcetera, that had web page and, oh my gosh, email. I can hit a button and you get it Across the country, you can read the news without having to go find a physical newspaper. Like, Internet had problems. There’s all kinds of crime in the Internet. There’s illegal pornography. There’s all But you couldn’t just say this thing is bad because you knew all these neat things. Right? You were able to say, yes.

Kyle Hauptman [00:15:36]:

Cars get in accidents, but cars also get you to the hospital faster. People used to die, before because they couldn’t get there. Right? So normal people saying, woah. You know, it just did some draft paper for me, and it created some art, and, it can be aware of state law in all 50 states 7 days a week, which comes up in my business a lot. Right? Super freaking useful. So the worry about it, yes. And just say we wanna have responsible development, okay. Yeah.

Kyle Hauptman [00:16:08]:

But, like, you know, the, the deep face, and the it’s, again, like the Internet, same problems, but more aggressive and more hardcore. Like, False advertising was illegal before the Internet. Fraud was illegal before the Internet. Impersonation, stealing identities was illegal for the Internet. The Internet and Created whole new ways to do those things, and I think you agree, Jordan. AI is gonna have lots of ways for criminals. Gonna create a whole bunch of new problems, but what do we know about problems that are really harsh and really expensive? We know you can get paid really well if you come to the table with solutions.

Jordan Wilson [00:16:43]:

Yeah. Yeah. Jeez. As as we talked about at the top of the show, you know, we got we have these jobs now at, you know, OpenAI, you you know, quarter million, half $1,000,000. Yeah.

Kyle Hauptman [00:16:54]:

And detecting when somebody calls yeah. So, you know, like, deep fakes, when somebody calls up and it is your voice, It really is with your accent and your intonation, and it can pass those voice detection. It can literally pass it. You know, you can speak to a relative, and they think it’s you. That’s a major issue. Yeah. And people who can prevent present solutions to that, Those are gonna be good jobs. Let me tell you that.

How will AI impact financial regulation jobs?

Jordan Wilson [00:17:20]:

Yeah. It sounds like, you know, there’s always been these these positions that that we’ve talked about, you know, in and Anti fraud, cybersecurity. But, Kyle, like like, even specifically as we talk, about financial and Regulatory institutions, you know, credit unions, everything. Are those jobs just going to, like, explode in in popularity and in, You know, more more and more, you know, credit unions, needing these.

Kyle Hauptman [00:17:48]:

Well, I do agree that we’re gonna look back Like we do like talking to that 12 year old kid. Right? They don’t understand how much harder things used to be That getting lost and taking the wrong turn and trying to figure out. People missed appointments. Right? You didn’t have this thing called GPS To try to communicate with people. You know? Like, when I call my wife from the grocery store and I say, see this thing in my hand right here? Is this what you want me to get? Right? And we don’t have to have any screw ups. And trying to book travel, like, just monumentally harder. So many things in a young person’s life just were not Possible. You know? When you say, oh, yeah.

Kyle Hauptman [00:18:27]:

I talked to Jordan this morning. Oh, you didn’t? Okay. Really? When I was a kid, you had to physically be near a certain phone, not any phone, 1 certain phone, and you had to be on 1 end for us to, you know, to talk to each other. I think it’s gonna be like that, and you’re gonna wonder, Oh, man. Remember the old days? That was a nightmare. Right? I remember as a little kid going through the the yellow pages, trying to look up airlines, And then calling me and waiting on you know, do you fly to, Denver? Yes. I’m writing it down. Freaking nightmare.

Kyle Hauptman [00:18:56]:

So there’s no way I think we’re gonna look back at pre AI And say, wow. That was bet. The same way, you know, you don’t wanna just not have smartphones anymore and get rid of the Internet. We wouldn’t even know how to function.

Jordan Wilson [00:19:08]:

Yeah. Yeah. Please please don’t take any of that away from me right now. Yeah.

Kyle Hauptman [00:19:11]:

I don’t. Anybody that’s thinking about, innovation and it it gets worried, I’m like, okay. Lose your smartphone for a day. See what happens. Right? It’s a nightmare. We we can’t even function. Right? And it’s to me the same. So people are gonna wish That there were aspects of AI that were gone.

Kyle Hauptman [00:19:27]:

Yeah. That’s true. We wish that there weren’t Internet viruses, that we could have Internet without cyberattacks, without hacks. We wish we could, but from a policymaker perspective, we’re going to have those things, and we can’t stop it. We can’t. Everyone in the world has car accidents. Only a few countries get a high paying auto industry, and we’re one of them. K? And every country in the world has computer virus and cyber attacks.

Kyle Hauptman [00:19:53]:

Only some places have a good cyber defense, cybersecurity industry. So everyone in the world is gonna have negatives with AI. Everyone in the world’s financial institutions are gonna have negatives with AI. Only some places We’re gonna get all the benefit of it, and I think America certainly can be if we’re not too heavy handed on it. But credit unions use it for customer service. You know what’s already solving language issues? Like, you’re looking you have a new immigrant community. You know? Like, I live in DC. Right? There’s a large Ethiopian community.

Kyle Hauptman [00:20:23]:

If if I ran a cranny hunt and I don’t necessarily and I wanna have stuff in the language and speak to them, it just got so much easier. As you can imagine, last year, I spent a fair bit of time talking to the Ukrainian American credit unions. There are 11 Ukrainian American credit unions. They told me 40% of their phone calls Ukrainian language. Mhmm. Jordan, I’m sure you can understand. It’s hard enough to find good customer service people. It’s even harder to find ones that are fluent Ukrainian in English.

Kyle Hauptman [00:20:49]:

Right? So a lot of that just got easier, didn’t it, where you can have actually speak and write documents and have Chatbots that aren’t terrible. You know? The opportunity to be served in a financial system, the opportunity to serve somebody, Serve them well in the financial system just got easier because all of our entities are now fluent And Ukrainian and Mandarin Chinese and everything, and I think it’s great for financial inclusion.

AI and financial regulator’s impact on everyday people

Jordan Wilson [00:21:18]:

Yeah. That’s that’s a great point because, Kyle, we’ve kind of been focusing on How generative AI may help the industry or help credit unions, but, I mean, when we talk down to the to the individuals, It sounds like it’s it’s it’s going to make things a lot better for the individual. Correct?

Kyle Hauptman [00:21:36]:

Yeah. Yeah. In a in a free enterprise economy in which we still, you You know, thank god, largely are. Technology usually lifts up the have nots and makes theirs. If you just add technology to a status sort of, You know, low free enterprise society, then it just enriches the elites. But in a society like ours, normally, it helps to have nots. For example, I’ve had 2 in my life deaths, rideshare drivers, like Uber drivers. It’s it’s not a big deal.

Kyle Hauptman [00:22:05]:

You get in, you put on and if you know how rideshare works, you You put in your destination, whatever. And for that matter, I’ve taken other countries where I don’t speak a language, they don’t speak English. I mean, it’s the same thing. I’ve never had a deaf cab driver, and you can’t even get a license. Mhmm. So somebody with a disability now has a way to earn their keep, And people are happier when they earn their success. Most people don’t wanna be, you know, very few people, I think, are actually moochers. The system may make you one.

Kyle Hauptman [00:22:32]:

But, people in wheelchairs, eBay, Meg Whitman used to always say this. How many people made their primary living buying and selling on eBay? Technology has always helped us fortune. If you were to have there were a lot of close off to you, and you now have it. A taxi drive you could never get a taxi license, if you were deaf. Right? It’s made it so, so much easier, and it’s made it easier for us to get down. The wealthy never had this problem they had so first. The financial industry. Right? How easy it is Access good investments now.

Kyle Hauptman [00:22:59]:

You can get low cost index funds sitting on the sofa just with your thumb on your phone. You got you got your paycheck. You wanna invest. Boom. You can do it. The wealthy always had concierge financial services. So this is gonna allow people to do things. You might not have tons of very high priced lawyers or be able to find 1.

Kyle Hauptman [00:23:18]:

And even if you do, they don’t work 24 hours a day like AI does, and and and it’s aware of the latest Developments. You know? I think it’s gonna be the same way that, we now have we’re going to have services that only the elite had before, and and It’s gonna benefit it on the service side, but if those of us in policy making roles don’t screw this up, we’ll also get the other 2 benefits, the jobs and the investment. Everybody in the world gets to watch streaming media. Only some countries got the jobs and the investment that came with it. You know? So that you could that’s a theme I keep coming back to, but, This country obviously has an opportunity to just win and win big with the AI industry.

Kyle’s advice on GenAI and it’s impact on financial regulators

Jordan Wilson [00:23:59]:

I love that. Yeah. That’s that’s getting me pumped up. Right? Because we We always talk about, hey. Everyone can use it. It’s it’s it’s creating so many new sectors, but, yeah, those sectors and jobs for the most part are are here largely, which, Kyle is is a great point to bring up. We could go on for a very long time, Kyle. I wanna be respectful of your time, but let’s let’s maybe, focus on what is the one Key takeaway as we wrap up today’s show that you want people to understand about how maybe, you know, Credit unions, financial regulators are are using generative AI and what that means for the rest of us.

Jordan Wilson [00:24:35]:

Right? So, what does it mean for us all, and what do you kind of see as, the future of of generative AI in this space, you know, hopefully pushing, this whole sector forward.

Kyle Hauptman [00:24:47]:

Well, again, to go back to the Internet analogy, the core of traditional finance has not didn’t change. How they did those things change. The core banking has not changed since it started in the Middle East 1000 of years ago. People make some money, they deposit it, they withdraw some, that money is lent out. Most of the time is paid back. That’s the core of it right there. Okay? Money moving around, being lent out, being paid back, etcetera. That hasn’t changed in a long time.

Kyle Hauptman [00:25:15]:

How we do it has changed. So the For a regular person out there, the 2 things that jump to mind. Right? Put aside inside a credit union. But from a customer of a bank or a member of a credit union, Your lending decisions are gonna get a little more complex, but probably quicker. Meaning, you don’t just have to look at your credit score. People about FICO, and I understand it, but I’ve been in countries that don’t have something like that. And believe me, FICO is better. But ad What you post on social media, depending on what they use, you’re gonna find lending risk that are better than people thought.

Kyle Hauptman [00:25:50]:

Like, finally being able to get credit for the fact that I’ve paid, like, 320 consecutive monthly cell phone bills since 1998, and I don’t get any credit in my FICO score because it’s not technically credit. Right? The fact that I paid rent for 20, you know, years. Right? That kind of stuff too. But, obviously, you know, that can be negatives as well. You might look like you have good credit, but dig under it. So the lending decisions are gonna get more complex but better. Remember, we don’t wanna be in a country that misallocates credit. We had a version of that 2008 housing crisis.

Kyle Hauptman [00:26:18]:

So more accurate, faster, but different. Ad Who gets lent what money at what rate? Okay? So I think that will be a key one. The other thing will be customer service. You’re gonna be able to get forms in your language. You’re gonna get, information that’s up to date. So, again, we regulate credit unions, you know, in all 50 states, and many of them are state chartered, So they’re regulators of state. You know, I don’t know what happened in Oklahoma this weekend. There was some enforcement case.

Kyle Hauptman [00:26:45]:

Right? And but good AI. Reg regtech, you know, should know. So Customer service and lending decisions, but I would say for a regular person. That’s where you’re gonna see, the difference. You’re gonna get money at a certain rate, and for that matter, your money in the bank or credit union is gonna be lent out in a certain way, in a different way, more complex, but probably faster and fairer than it used to be.

Jordan Wilson [00:27:08]:

So many so many great insights. We covered so much in a very short period of time. Thank you so much, Kyle, for coming on the Everyday AI show and and give giving us some great insights on AI innovation for financial regulators. Thank you so much for joining the show.

Kyle Hauptman [00:27:23]:

Thanks, Jordan.

Jordan Wilson [00:27:24]:

Hey. And as a reminder, everyone, we did cover a lot. If you miss any, don’t worry. Go to your everyday AI .com. Sign up for the free daily newsletter. We’re gonna be recapping today’s show, sharing out a lot more information as we do always do. So thank you for joining us, and we hope to see you back for another episode of everyday AI. Thanks, y’all.

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Ep 143: AI Innovation for Financial Regulators