Next-Level Growth: Leveraging AI to Build a Member-Centric Experience

In this episode, part of our Next-Level Growth series with Cornerstone Advisors, Blend’s Reva Rao discusses the strategic implementation of AI for credit unions to enhance the member experience. They explore how to move from impersonal lending to predictive engagement that supports financial wellness. Learn how to balance human empathy with digital efficiency, identify high-impact use cases like automated decisioning, and build the organizational readiness needed to scale AI effectively.

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Transcript

Elizabeth Gujral, Cornerstone Advisors (0:06):

Hello everyone. Thank you for joining us today. So, we are going to be talking about something that has been a hot topic for the last couple of years, which is AI. But specifically, we’re going to be talking about AI within the context of member experience and then within the digital member experience. And we know it’s something that’s been talked about—or at least AI specifically—has been talked about quite a lot in the banking industry, in community banking, and virtually every industry the last couple of years. But what we wanted to do today is break it down a little bit, break through the noise, and to do that, we are joined by Reva Rao, the Head of Digital Transformation over at Blend. And we’re going to be hearing her thoughts on how AI is playing into building great member experiences now and for the future, and really what institutions, financial institutions, need to think about, you know, organizationally and technologically in order to get this done. So, but first Reva, before I really jump into it, I’d love to hear about your background and really what’s keeping you busy over at Blend.

Reva Rao, Blend (1:08):

Thank you for having me, Elizabeth. I currently lead digital transformation initiatives for credit unions at Blend. I previously held senior leadership roles at large credit unions, such as Travis and Golden 1, as well as banks including Wells Fargo, JP Morgan, and Citi, where I specialized in lending and risk management. So throughout my career, I’ve been instrumental and have had the opportunity to drive innovation and enhance member experience by working on teams dedicated to these goals. So, been at Blend for about a month and a half, so fairly new to Blend, but not new to Blend. I used Blend as a on the product side at Wells Fargo when I worked there. So, I’m excited to be here.

Elizabeth Gujral, Cornerstone Advisors (1:55):

Yeah, and because you’ve been in the industry for quite a while, you’ll be able to speak to the member experience quite quite a bit. So, when we’re thinking about member experiences as well, you know, what’s let’s start with the actual members, what do you think is, has changed over the last five years, especially with the introduction, like this whole what we’re talking about, with AI? What has been changing and what do they expect now from their financial institutions?

Reva Rao, Blend (2:18):

I think it’s like all buzzwords, it seems to be the buzzword of the season. But I think what you said is true. Over the past five years, COVID has fundamentally shifted and transformed how members interact with their credit unions. Today, members are no longer satisfied with just waiting in branches to discuss their financial needs. While we refer to them as members, the experience often feels impersonal, especially when they seek services like loans. I often say we call them members, but then as soon as they come for a loan, we treat them like strangers. So, this disconnect is sometimes noticeable, and members do not like it. So, as a result, leveraging AI and member data is essential to meet and exceed expectations. So, it’s not just an expected outcome, it’s table stakes. So, they expect members now expect the same kind of seamless, personalized experience that they’re receiving from their digital providers and Fintech applications, whether through an app or a website, or even through simple text messages. So, AI now empowers them to anticipate those needs and provide recommendations. So, ultimately, this will make banking just more intuitive and truly member-centric.

Elizabeth Gujral, Cornerstone Advisors (3:39):

And I think you touched on something that’s really important to I think a lot of credit unions. It’s hard to provide that personalized member experience if you don’t have a good grasp on the data, right? And I think a lot of institutions like you tout their, we’re great, we’re going to treat you like a true member, like it’s family. But then again, like you were saying, when you come in the door and you’re applying for a loan and maybe you’re just just another customer. Yeah. So, what do you see as, besides personalization, what do you see as some of the like the biggest opportunities for how AI can transform the member experience?

Reva Rao, Blend (4:18):

I think the easiest, Elizabeth, is self-service, right? Make the simple tasks easy. Don’t make, you know, you should use your service providers for the best on-site service, but I would love to just check my balances, check the stuff that’s happening in my account through self-service options. That should be, it’s a no-brainer. The next step is providing a 24/7 digital assistant that can handle routine tasks. You want a statement for a loan or something that’s easily accessible, don’t have to have a manual person handle it. Let that be available through digital assistance. But the greatest potential I see for the next level is some kind of predictive analytics. I will say I have a young person who’s, you know, in her early 20s, who’s trying to get and make her around the world and understanding what her financial literacy is. And so, what we need to do is help them provide those financial decisions. Give them tools to be able to get that, what I consider the financial wellness opportunities. Are you going to be able to spot fraud? Are you going to overspend before your rent is due? That I feel is the next wave. And we have the information at credit unions and vendors like Blend to help provide that information, we just need to leverage it next.

Elizabeth Gujral, Cornerstone Advisors (5:43):

I think that’s a perfect idea, too, because I don’t I can’t quote the statistic perfectly, but it’s something like 80% of Americans graduate high school without fully understanding, you know, how a credit card works or how to like debt management or these credit cycles. So, I can see that those digital virtual assistants providing a, you know, that additional service that credit unions can provide to their members to really help them get a grasp on their financial lives and to get to financial health and wellness. But when we think about AI too, do you think there’s still a balance that needs to be met between AI self-service and human interaction? Because when I see it, I don’t think we’re in the 100% AI future just yet.

Reva Rao, Blend (6:22):

No, 100%. I would say blending, and I’m using that word loosely here, but blending AI efficiency with human empathy is where I think. You do not, AI should handle the repetitive tasks, the transactional tasks. But on sensitive situations where, you know, the goal is not to just, if I’ve had fraud experience or some kind of financial strife experience, the personal touch matters. And it’s I don’t think the goal is entirely to replace people, but to empower them and ensure that the members always feel heard and supported. So, I think that’s where I think the biggest balance is.

Elizabeth Gujral, Cornerstone Advisors (7:01):

Yeah, and I think too when we think about what is the ROI efficiency, it’s not always a dollar amount behind it. It’s sometimes it’s about, again, like you said, what are those repetitive tasks that we can give to AI so that our staff can really spend those quality valuable moments with our members that are needed, right? So, what, out of curiosity, too, what is your own personal experience been with, you know, AI digital experiences, because sometimes it’s a hit or miss. I’ve heard great stories. I’ve heard funny stories. I’ve heard, you know, like I’m trying to get a hold of like Southwest, like the airline and it’s just there’s like I’m screaming and like customer service, you know, what have your experiences been so far and where do you think there still needs to be improvement in the technology?

Reva Rao, Blend (7:49):

Happy to share. So, a few years ago, I led the launch of a credit union’s first end-to-end digital unsecured application. It was their first leap into what used to be a hybrid process, right? They would, the online application, but then everything else was manual. And so, they made the leap forward to giving an end-to-end digital unsecured application experience. And one of the valuable insights we gained was how much members value transparency and real-time updates. Instant status notification, you know, it’s a nice to have, but it proved to be absolutely essential. So, let me use an example. AI played a pivotal role in this transformation. So, by leveraging automation, a member was able to apply for a much-needed HVAC replacement that they needed. And they took their lunch break to cover an emergency HVAC replacement and they received the instant approval and within an hour or two, the funds were deposited, all within hours in a single day. They were able to schedule the technician to come in that evening and get their HVAC replaced. You know, the feedback we got was just what an experience that was to be able to get immediate transformation through an application, right? For us, it was just an application. For them, it was life-changing because Sacramento gets hot, and to have that HVAC replaced within hours was an amazing experience. So, you really get to see how that transformation, what you think is just an application transformation, is truly transformative in the lives of our members.

Elizabeth Gujral, Cornerstone Advisors (9:39):

I completely agree, and you said Sacramento gets hot. Well, I’m based in Scottsdale, Arizona, and I think as we speak, it’s 102 degrees.

Reva Rao, Blend (9:45):

Exactly. So, same, you know exactly what I mean.

Elizabeth Gujral, Cornerstone Advisors (9:49):

Absolutely. So, are there any areas you think that AI is just it’s not a fit for improving the member experience right now, or maybe maybe we’re just not there yet?

Reva Rao, Blend (9:59):

Yeah, no, I think you’re absolutely right. So, areas that I still think that humans are needed is where deep empathy is needed, deep understanding is needed, or problem-solving is needed. Sometimes you need to help guide members through financial hardships and figure out if they’ve lost their job recently, what other tools and financial tools can be provided to them. Is AI the right fit? Probably not right this minute, right? We need to be able to, you know, actions that need human judgment or compassion and understanding, all of that, they need a human. But it shouldn’t, but what, you know, and this is probably where I would say credit unions do it best, right? This is what members seek out their credit unions, they come to their credit unions for. So, I think that striking that balance between what I consider operational efficiency and also the deep trust-based relationship partnership that members come to their credit unions for is what I think differentiates when you should use AI and supplement them with the human touch.

Elizabeth Gujral, Cornerstone Advisors (11:06):

I completely agree. And I don’t know if you’d agree with this, too. One thing I was thinking about was it’s not so much, it’s kind of a case-by-case basis too of when you’re thinking of like, where does AI not fit in the member experience? To me, it’s also at a credit union if the credit union team does not have the time or the technological capabilities—and I know we’ll get into in a couple of minutes—to like really manage these models that the AI is running on, then to me, it’s not a fit. Like if the credit union can’t manage it, then don’t do it.

Reva Rao, Blend (11:33):

That is such a great point.

Elizabeth Gujral, Cornerstone Advisors (11:37):

But you’re completely right about empathy too. Like when we’re thinking about how do we want to design the user experience, the member experience with AI, we always have to keep considering where do we still want that human touch and where is it still important for our members? I think that’s a fantastic point. So, tell me, I mean, what I mean, you’re new to Blend, but I’m sure you know. I mean, how’s Blend approaching AI right now?

Reva Rao, Blend (12:00):

Well, there’s a lot of areas that Blend is working in. I would say Blend has taken a comprehensive approach to AI in member experience. So, we’ve always done this, right? We’ve always pre-filled applications, but now when you think about AI, Blend is looking at it as a foundational layer across all of its products. We do deposits, we do consumer loans, and we, of course, do mortgages. So, making sure that every interaction, whether it’s self-service or assisted, is optimized. So, you know, Blend is using AI to personalize and make that interaction seamless. And this requires, whether it’s through instant approvals, making sure documentation that they have is already, is not, you know, not repetitive, also making sure that all of the information you provide is digitally protected. So, AI is not just a big tool, it can be in pieces and sliced across different platforms and different pieces of the same puzzle.

Elizabeth Gujral, Cornerstone Advisors (13:06):

Right. AI is not just a chatbot or, you know, a robotic voice on the phone. It’s a lot of different comp technological components. Are there any specific pain points that Blend is looking to continue to try to solve like in the, you know, in the future, it’s on the roadmap when it comes to I’m going to think about, you know, personalization, service availability, really, what’s what’s on the road map?

Reva Rao, Blend (13:28):

No, those are great points, Elizabeth. One of the main things is wait times and personalizing intelligent automated and advanced personalization so that every stage of the way members know. For example, AI’s chatbot enables instant and accurate responses to the borrower’s questions so that you’re not having to wait on a phone indefinitely, waiting for loan officers to get back to you. You can get those answers quickly. So, not only is the copilot automating the routine inquiries, but also like there’s a nuance. If you say certain words, not everybody understands them. In fact, sometimes even call center people don’t understand what you’re asking for. So, it’s important that copilot does understand how those chats are doing them. We’re also building a complete picture of the financial situation and preference. So what I talked about, this allows Blend because it has the full picture, whether it’s deposits, consumer loans, or mortgage, you can offer a personalized offer, as opposed to just giving everybody an auto loan or everybody a personal loans. You can get instant approvals only for the specific products that suit you. If you’ve been shopping around for a car loan, it absolutely behooves the financial institution you’re partnering with to say, do you have, do you need a car loan? Because we offer that. When I was at a large bank a few years ago, when we took pulled our member, our customers at that time, 60% did not know we had some of the products that we did, because they only thought that the financial institution did checking account or deposits, had no idea that we’d also do mortgages and do home equity. So, these I think AI can help not just be the second arm in helping you educate your members, but also suggest products that are personalized for you.

Elizabeth Gujral, Cornerstone Advisors (15:25):

Good. And I think that brings us to like kind of like the next segment here, too, where it’s like, these technologies are really, really powerful, but when we think about for co-pilot, it’s like any AI technology, a credit union’s going to implement. They can’t just implement it, turn it on, and all of a sudden, boom, it works perfectly. There’s a lot of technological maintenance that has to go into these. So, what would you say are some of the things you’ve seen of the challenges or limitations that credit unions need to be aware of when they’re thinking about deploying and scaling AI technologies?

Reva Rao, Blend (16:01):

I think I would say the biggest challenge credit unions face is scaling the AI tools. Exactly what you said. They have data, but they don’t have people to manage that data. They do, they don’t know how the quality of the data is or integration with the legacy systems is or the complexity of managing these multiple vendors. This is where I think, you know, partners like Blend can help because we’re a unified tool and we offer you different products as opposed to having to go to multiple vendors. One of the CIOs who’s a dear friend of mine at a credit union said to me that sometimes just being a CIO is managing a patchwork of vendors with a razor-thin IT staff support team. So, many credit unions possess valuable data about their members, but they’re frequently siloed and not readily accessible. So, I think to your point, that’s kind of the biggest challenge and the limitations for credit unions today.

Elizabeth Gujral, Cornerstone Advisors (17:01):

So, how would you recommend a credit union get started? You know, they know they have the data and they’re just they don’t know what to like how to use it, what how should they get started?

Reva Rao, Blend (17:10):

I think the biggest is, first of all, partner with a vendor who’s going to be not just a one product, and understanding what your needs and requirements are. I think one of the biggest things is I would say solve for pain points, but don’t solve for pain points today. Think about where you can expand and grow this partnerships. A lot of vendors come to credit unions as I, as a CLO, I used to have somebody who just solved for one thing, subscriptions today, but what if it’s subscriptions today, but tomorrow it’s data that they need to understand whether those subscriptions are right for you. Are you saving up for a mortgage, like looking at vendors more as partners than vendors is I think the key for credit unions to grow. The other thing is investing in a partner who’s going to look at you and say, help you understand your goals and be the, elevate the partnership to member centricity. You’re not just solving for members today, you’re helping them grow and generations of that member coming back to you. So, trying to make sure that you’re providing an education, as well as just financial service, and not just throwing products at them.

Elizabeth Gujral, Cornerstone Advisors (18:25):

I think that’s very fair. And to do all this too, we have to think about what skill sets are needed within the credit union as well. I mean, we can work with our partners as credit unions, but we still need to have some in-house expertise a little bit as well. So, what do you see as some of the bigger gaps that currently exist at credit unions in order to take advantage of these opportunities? Like, what gaps need to be filled?

Reva Rao, Blend (18:46):

I think the biggest thing I would say is understanding, there needs to be education for frontline staff as well as the executives when enabling tools like AI. When we’re using the example of the chatbot, right? If a member comes to the frontline staff and tells them that they’re using a chatbot and they got an answer that they didn’t understand, the frontline needs to know how to answer them so that they don’t take them off that queue, but actually helps them answer those questions so that they can follow the same process. And for that, you need to educate the frontline as well as the executive teams so that you can truly educate the members on how to interact with those kinds of AI tools. The second is educating the staff itself on what the next level is, to make sure that they’re empowered to make some decisions, so that it’s not just making sure that they are answering the question, but making sure that they’re helping and adding to that the chatbot or another AI tool, helping make the member service the best experience that they can have. So, I think it’s collecting the people, having a collective mission in helping the member, but also making sure that these tools can add to the same experience that you want to attain ultimately.

Elizabeth Gujral, Cornerstone Advisors (20:11):

I think that’s a great point too, because it’s a reminder that AI technologies is not just homework and education for the IT team or who manages the vendors. It really needs, the education really needs to permeate down throughout the entire organization, like you said, from the executives to the frontline. So, last couple of questions here, so what would be great, like in terms of if you could envision a future where AI is delivering the exceptional member experience, what would that look like to you?

Reva Rao, Blend (20:46):

Well, I’ll tell you what Blend would look at. For a great AI-powered member experience, every member should feel understood, valued, and empowered. So, regardless how you choose to engage with, whether the tools or the financial institution, AI should anticipate the needs, analyze the data in real-time, proactively provide solutions or, you know, issues, solutions for issues, and deliver a personalized guidance. I don’t want to be treated like just any person. I’d like to be treated like the member who has invested in you, put my whether I treat you as my primary financial institution, or I’ve come to you with my mortgage, or I’ve come with you through with my auto loan, I’d like you to tailor your recommendation personalized to me with my unique financial situation. I could be a fresh entrant to the credit spectrum, or I’ve been here for many years. So, I think it’s important to recognize that. The second is to provide what I consider ethical AI, which means you’re following the person for who they are, but also following all the ethical norms of making sure that the data has true guidance provided to the members. And regulatory it complies with all the laws and regulations. So, to me, we can provide that member experience, but you need to provide it anticipating that personalized service for the members.

Elizabeth Gujral, Cornerstone Advisors (22:17):

I love it. So, last question here, because one of the things, along with the AI buzzword, one of the things we’ve been hearing over here at Cornerstone quite a bit is what is the ROI of AI? And sometimes I don’t always think it’s a dollar amount. I think it’s, there are organizational benefits. I think there are technological efficiency gains, it’s not just the dollar amount. But I’ll ask you, you know, what should our, what should credit unions be using to track success within these investments?

Reva Rao, Blend (22:44):

I mean, I think all organizations, and Blend obviously does that very personally with all of their clients. Member satisfaction NPS remains foundational as they directly reflect the quality of the member experience. You know, a recent client of Blend found that they had a 2x increase in applications, a 50% increase in, so all of those, 60% increase in account funding, those are standard. I think those are measurable. But I think you could also look at adoption rates. How are people using those online application tools to the best of their ability? Are they going from, you know, 30% coming to the website and walking away or abandoning to actually banking and fully vesting in those digital tools? These are indicators of engagement and also convenience, because if they’re still coming to your branch, then the online tools were just that, an online metric. The efficiency and the usability is just as important.

Elizabeth Gujral, Cornerstone Advisors (23:43):

I completely agree. You know, Reva, I really have appreciated your time today. I hope you enjoyed yourself, too. And, you know, I’m sure there’s always something going on with AI, especially within the member experience, and I think things are going to keep evolving and changing. So, I’m excited to see, you know, what’s going on with Blend in a couple of years, what’s going on with the industry. Until then, thank you.

Reva Rao, Blend (24:06):

Thank you for having me.