Tuesday, July 5, 2022

Why the crypto crash is fueling calls for regulation

IMTFI Director Bill Maurer in GRID, June 27, 2022

“It’s going to lead to more regulation, especially because you have this awful mix of whatever is going to happen with this very uncertain economy, coupled with all of the marketing of crypto that’s happening right now to vulnerable and minority communities, all the celebrity endorsements,” said Bill Maurer, director of the Institute for Money, Technology and Financial Inclusion at the University of California, Irvine. “The thing is, if regulation is going to happen, it better happen fast.” … “One of the foundational mythologies of crypto is that you’re going to have this private money and finance that is unregulated and yet still secure, because of the technological workaround,” Mehrsa Baradaran, a professor at the University of California, Irvine, School of Law and author of “The Color of Money” and “How the Other Half Banks.”

For the full story, "Why the crypto crash is fueling calls for regulation: Existing bills and the human toll is creating a perfect storm" by Benjamin Powers, please visit https://www.grid.news/story/technology/2022/06/27/why-the-crypto-crash-is-fueling-calls-for-regulation/.

Monday, June 27, 2022

A Tale of Three Cedis, Mobile Money, and Fintech? User Experiences in Ghana’s Evolving Moneyscape

By Vivian Dzokoto, PhD, Virginia Commonwealth University and  IMTFI Fellow in the Merian Institute for Advanced Studies in Africa (MIASA) - Blog

A decade ago, I published “A Tale of Two Cedis”, a psychological perspective of user experiences of adjustment to a central bank-led disruption to payments in Ghana. In that and other papers, I explored how Ghanaians made sense of the old currency1 (what became known as the Old Ghana Cedi), and its replacement, the New Ghana Cedi. The latter was a banknote and coin series more portable than its predecessor due to the elimination of 4 zeroes.

Thereafter, I published other papers, based largely on interviews with everyday consumers, examining how people made sense (or didn’t) of Mobile Money. I researched the public awareness of and reasons for the then slow uptake of Mobile Money in Ghana. (Uptake has increased dramatically since then).

My research in Ghana’s moneyscape had numerous takeaways. Here are two examples. First, the old currency remains an important part of sense-making for a seemingly large subset of Ghanaians. Currently, 10+ years post-redenomination, some Ghanaians routinely convert the cost of goods and services to the old currency to get a sense of just how pricey something is – to determine the “real value”. In technical terms, such users default to the phased-out scale rather than the rescaled calibration of the fiat currency to subjectively determine worth. Second, from the user perspective, the onboarding of mobile money was partly hampered by a focus on the tangibility of money. Simply put, at the time, people preferred money that they could touch and feel – and handle, hide, wave, toss, present, and on occasion, flaunt. Apart from initial distrust of Mobile Money in its early days, lack of a perceived distinction between Mobile Money and Ezwich (a biometric card-based payment option and financial inclusion strategy introduced by the Ghana Interbank Payment and Settlement Systems Limited (GHIPSS)), low levels of awareness and understanding of this phone-based payment tool, many of my respondents at the time were of the view that money wasn’t quite a money devoid of a physical form.

The face of payments in Ghana has changed dramatically since my “Tale of Two Cedis” was published. Yet distinct patterns prevail in Ghana’s payment ecosystem. I discuss a few of these below.

What has changed?

Today, the payment ecosystem in Ghana, while not flawless, is decidedly much more complex. While not cashless, it is certainly cash-lite. A digitally literate, bank account holder has the option of paying for goods and services via mobile phone using Mobile Money through a Mobile Network Operator. This is done via e-value in the local currency previously loaded onto their Mobile Money Wallet by a push transaction from their online banking account2, processed by a third party financial technology company aka fintech (invisible to the consumer) linking the banking system to the mobile money platform on the rails of GHIPPS products. Alternatively, the shopper could pay by cash, card (assuming the vendor has a point of sale machine), a third-party payment app, or via QR code. Ghana is the first African country to launch a universal QR code enabling instant merchant payments from mobile money wallets (GSMA, 2021). A frequently heard question today is “ Don’t you have momo? “. This is the case particularly when a vendor is unable to make the change, a perennial local cash-related problem in some sectors of the market economy. Churches, a HUGE presence in this very religious country, particularly embraced mobile money payments during the COVID 19 lockdown period. By doing so, churches have expanded beyond their significant engagement with the formal banking sector to mirror the nation’s cash lite, mobile money dominated payment preference shift.


To read the full post please visit: https://miasa.hypotheses.org/429

Featured Image: By PDPics, Pixabay-Licence, https://pixabay.com/photos/currency-note-paper-money-ghana-166846/.

Footnotes

  1. The term old “currency” sounds like an oxymoron. 
  2. Note: There are other ways of loading money onto a mobile money wallet, such as a push payment from someone else’s bank account or mobile money account, or by depositing cash with a Mobile Money agent.

Tuesday, October 12, 2021

10/13 "What’s a Central Bank Digital Currency and Why Do They Matter (Even If They Never Exist)?" a CIESAS-IMTFI talk with Bill Maurer

Join us! Tomorrow 10/13, 9amPT/11CT/12pmET
"What’s a Central Bank Digital Currency and Why Do They Matter (Even If They Never Exist)?"


A virtual talk with Bill Maurer, UCI moderated by Magdalena Villareal, CIESAS
Wednesday, October 13, 9-10amPT/11am-12pmCT/12-1pmET
Register for Zoom webinar here: bit.ly/CIESAS_CBDC_maurer

Co-sponsored by
The Center for Advanced Research and Postgraduate Studies in Social Anthropology 
(CIESAS Occidente) & IMTFI

CBDCs became a topic of debate after the rise of bitcoin, yet proceed from very different assumptions about the nature of money and the role of the state. They also spotlight the public interest in the ability to pay for things—something so basic we rarely even consider it. This talk considers CBDCs—which, as of now, don’t even really exist, outside of a few pilots—in light of that public interest, and asks whether a truly democratic digital money can take shape in the context of pervasive digital surveillance and broader challenges to democracy.


For Q&A and Discussion Professor Maurer and Professor Villareal will be joined by:
Nima Yolmo, Ph.D. candidate in Anthropology, UC Irvine
Andrew Crawford, Doctoral Researcher at Universit├Ąt Hamburg

Live Spanish translation will be available.


Bill Maurer is Dean of Social Sciences and Professor of Anthropology and Law, UCI and the director of the Institute for Money, Technology and Financial Inclusion. He is the author of How Would You Like to Pay? How Technology is Changing the Future of Money, among many other publications

Magdalena Villarreal is senior researcher and professor at the Mexican Center for Advanced Research and Postgraduate Studies in Social Anthropology (CIESAS Occidente) and member of the National Research System and the National Academy of Sciences.

Monday, October 4, 2021

It’s all about cash in the end...for now.

by Andrew Crawford, Doctoral Researcher (GIGA, Universit├Ąt Hamburg) and IMTFI Fellow

News about a political upheaval often includes a story about frantic citizens desperately trying to get cash. Recent cases in point are events in Afghanistan and Myanmar. In Afghanistan, the departure of US forces and subsequent Taliban takeover led to a banking crisis with long lines for the limited number of functioning ATMs. Traditional informal money transfer agents, known as hawaladars, faced similar shortages with excess demand for cash that they could not satisfy.  Behind the scenes, the Taliban pushed central bank and finance ministry officials to get to work on solutions, a difficult task considering the brain drain caused by the hundreds of thousands that have already fled the country.   

People line up outside a bank to withdraw cash in Yangon, 5/15/2021 (Photo: Reuters)

Meanwhile, Myanmar faces similar skills shortages as state employees refuse to assist the military junta that deposed their democratically elected government in February and has since killed more than 1000 civilians. Government limits on branch and ATM withdrawals were implemented and in late August the government closed numerous bank branches, under the pretence of COVID-19 safety.  To enter open branches customers had to line up for tokens that later emerged for sale on Facebook. Informal bank account markets also evolved online where people could sell their bank account access data in exchange for physical cash at commission rates of 7-15%.  Even retailers sitting on cash revenue began offering money exchange services rather than try to bank their company takings.

The Taliban inherits a central bank with depleted USD and local currency reserves
(Photo: Elmer Laahne/johan10/Adobe Stock)

Considering the scramble for cash you may be surprised to learn that both Myanmar and Afghanistan had, until recently, digital payment systems. Their provision of mobile money led financial inclusion proponents to suggest that both countries could ‘leap-frog’ traditional banking infrastructure. But the unrest immediately ended this dream and demonstrated the fragility of fintech when government institutions fail. Mobile money agents continued to operate but needed to increase fees to 10 - 12% to compensate for the difficulty of obtaining cash for withdrawals. Myanmar mobile money companies, such as Wave Money, were left desperately trying to provide cash to their agents to stop them charging egregious fees to their 1.3 million clients.

Why not print more cash? The Myanmar junta tried to until the German company supplying their ink and materials for printing, Giesecke & Devrient, suspended their deliveries citing it as “a reaction to the ongoing violent clashes between the military and the civilian population”. This further compounded the sense of panic and desperation for cash and left the junta pleading with other foreign banknote companies, so far to no end.

Myanmar has smartphone penetration of over 80%, a rate comparable to many European countries (Photo: Sasin/Adobe Stock)

So, what happens when people give up on cash? Well cryptocurrency has always been viewed by its proponents as the game changer for such crisis situations. Cuba, for instance, has recently seen the growth and legalisation of crypto currency to facilitate remittances, overcome US sanctions, and prevent inflation.  But the recent legalisation of cryptocurrency in Cuba may not mainstream its use due to unreliable internet access and geo-blocking by crypto exchanges.  

The recent adoption by El Salvador of bitcoin as legal tender may provide one way by which cash shortages may later be avoided. If many Salvadorans keep their funds in bitcoin, they could continue to trade and will not lose their life savings in the case of political upheaval. Whether this happens may depend on how much Salvadorans are willing to put into the volatile cryptocurrency. Additionally, if the Salvadoran government felt threatened, they could still hit the internet kill switch preventing users from trading bitcoin. The security of the government backed Chivo cryptowallet also remains untested

Overcoming the internet kill switch is tough and would require satellite internet technology like that offered by Elon Musk’s Starlink (although Starlink is currently not available in countries such as Cuba, Myanmar or Afghanistan). Does this mean the combination of satellite internet, solar generated electricity, and cryptocurrency (along with the knowledge of citizens on how to use all of them) will free people from relying on cash? Well, the missing ingredient that no technology can provide is trust. With such complex technology it may be difficult to have citizens willing to depend on cryptocurrency to protect their life savings. Another barrier may be an innate behavioural instinct to grab something physical and dependable during a crisis (like the hoarding of toilet paper in many countries during COVID-19 lockdowns). Until citizens in an institutional vacuum are willing to trust complex, intangible, hi-tech solutions to both transact and protect their wealth, it will remain all about cash in the end.



Wednesday, August 25, 2021

World’s Oldest Known Coin Mint Found in China

The 2,600-year-old site produced highly standardized “spade money,” possibly on government orders

Radiocarbon dating suggests the workshop began minting operations
between 640 and 550 BCE (H. Zhao et al. / Antiquity, 2021)

Bill Maurer in Smithsonian Magazine, Aug. 9, 2021

Archaeologists in China have found what they say is the world’s oldest known coin manufacturing site. … Bill Maurer, an anthropologist [professor of anthropology & director of the Institute for Money, Technology & Financial Inclusion] at the University of California Irvine who was not involved in the new research, tells National Geographic’s Jillian Kramer that the discovery of the coins together with the molds used to make them is highly unusual. Ancient coins are often discovered in hoards far removed from the sites where they were minted, making it difficult to date them.

For the full story by Livia Gershon, please visit https://www.smithsonianmag.com/smart-news/worlds-oldest-known-coin-mint-found-china-180978394/


Thursday, July 29, 2021

‘No cash, no ritual’: the intersections between cash shortages and ritual enactment in north-western Zimbabwe

By guest blogger Joshua Matanzima, La Trobe University

Introduction

This article examines the impact of the ‘cash crisis’ bedevilling Zimbabwe since mid-2016 on the enactment of the Masabe ceremony within the BaTonga community, (Sinakatenge Chiefdom, Eastern Binga, North-west Zimbabwe). The article argues that the cash crisis has negatively affected Masabe ritual processes. The paper argues that traditional ceremonies have in contemporary times adopted use of ‘cash’ to facilitate their conduct. Hence, the liquidity crisis resulted in decreased cash in circulation has thus witnessed ceremonies being postponed, delayed or even avoided. In the quest to further understand the negative consequences of cash crisis on ritual engagement, the study analyses BaTonga traditional culture and religious practices. It highlights the importance of religion and ritual in fulfilling individual and societal needs and discusses how disruptions in ritual engagement can affect the psychological needs of individuals or the integration and cohesion of the society/group. The study utilizes cases from BaTonga villages in Sinakatenge Chiefdom. Oral testimonies were ethnographically collected from BaTonga villagers pertaining to the challenges being faced in conducting the Masabe ceremonial practices.

Figure 1. Researcher and local informants: women holding their smoking pipes. 

Field Notes

In 2017, I conducted ethnographic research among the BaTonga speaking people of Sinakatenge Chiefdom, north-western Zimbabwe. Sinakatenge is part of Binga Rural District. It lies along the margins of the nation-state at the Zimbabwe-Zambia border. The research examined the Masabe (alien) spirits ritual process. The Masabe ritual process is the means by which an alien spirit possessing a victim and causing illness is made to manifest itself and then depart the body of the victim, restoring the possessed person to health. Masabe possession as an ‘organized cult of affliction which addresses itself to the individual instead of the community’. Masabe can take over and speak through human vehicles and causes sickness to its victim. Masabe have desires which are made manifest through their victims and are pacified through a dance performance in which the victim enacts these desires. The research involved participant observations and semi-structured interviewing.  I attended a total of 5 Masabe ritual ceremonies and interviewed 24 elders, both men and women, regarding the Masabe ritual process. The centrality of ‘money’ in the entire process was emphasized by the elders interviewed and formed part of my personal observations. 

At a time when this research was conducted Zimbabwe faced serious economic crises characterized by high unemployment, high inflation, food shortages and cash crises. Many Masabe ritual ceremonies were delayed, procrastinated, and even avoided due to the costs involved and challenges encountered in purchasing the material required for the ritual to be successfully enacted. The material required for the Masabe ritual ceremony includes a black cloth, beads and black goat, as well as sugar, mealie meal, sorghum, and yeast for beer brewing. In the absence of these items the Masabe ritual ceremony cannot be enacted. Consequently, the affected families often delay, procrastinate, and, at worst, avoid conducting these ceremonies. 

Following the early to mid-2000s liquidity crunch, in 2009, the Zimbabwean economy was dollarized. Dollarization meant resorting to the use of the US dollar as a result of local currency devaluation. Dollarization helped reduce inflation rates and also stabilise the economy. However, from 2013 cash shortages re-emerged and by April 2016, much of the US dollars were reported to be externalized at an alarming rate, thereby causing the cash crisis. In a bid to address this cash crisis, the Reserve Bank of Zimbabwe introduced ‘Bond Notes’ of 2 USD and 5 USD denominations, and the 1 USD ‘Bond coin’ which were said to be equivalent in value to the real US$2, US$5 and US$1 respectively. These new notes and coins were introduced alongside the increased emphasis on the use of plastic money and Ecocash/OneWallet (mobile phone-based money services, or mobile money) for transactions. Indeed, plastic money and Ecocash/OneWallet proved somewhat effective for those living in urban areas. But it did not have the same impact for those living in marginalised or remote communities. 

Local transactions in Sinakatenge were mainly based on barter trade at the time. Sadly, such materials as cloth, beads and yeast were unavailable in local stores where barter was tolerated. People had to purchase these from urban areas, where either cash or mobile money was required. Sugar was available in local stores, but its price of 3 USD per 2kgs, was steep for the local people, who could not afford the sugar needed for the ceremony. Many, if not all, people in Sinakatenge had no bank cards, were cashless, and had no Ecocash/OneWallet. The unavailability of mobile network coverage in the area discouraged people from owning mobile phones. Thus, the villagers found it difficult for them to purchase these materials needed for the Masabe ceremony. Before the liquidity challenge, purchasing of these items locally and in Gokwe was not a major challenge. The US dollar introduced during the Government of National Unity era had in a way solved inflation and currency devaluation problems.


The Masabe ritual process and costs

At first, the person possessed by Masabe normally is afflicted with ‘illness’ or ‘sickness’. The ‘sick’ person sought clinical medical attention in local clinics where consultation and medication were free of charge. It is the norm that every sick person must seek clinical medical attention before visiting bun’anga (traditional healer). However, some people were referred to hospitals in Gokwe or Binga, (which are the nearest town centres), especially when the ‘sickness’ becomes more serious. This, indeed, is done at some significant costs. If the kinsmen of the ‘sick’ person have bank cards or mobile money access, they might purchase and pay for medication using such platforms. But, this is usually expensive to them due to transaction charges. 

Furthermore, if the illness persists, despite modern medication uptake, then the ‘sick’ person is taken to traditional healers. Traditional healers also require payment, which also now is in the form of cash whether the Masabe is diagnosed or not. The ‘sickness’ is thus considered to be the ‘arrival’ of the Masabe which in this case is only diagnosed by traditional means than modern systems. Once the Masabe spirit discloses its identity through the traditional healer it awaits a performance to be held for it so that it manifests itself.

The second step is, after the ‘sickness’ has been found to be Masabe related, when beer is brewed. Beer brewing for Masabe ceremony is done by women from the possessed person’s matrilineage. This is so because the society is a matrilineal. The day at which sorghum is soaked in water, the possessed person is supposed to commence sleeping in a chidumba (a house made of poles and grass) until the process of beer brewing is over. The construction of the chidumba requires labour and meeting the costs of gathering the needed construction material, such as poles, grass and stones. To hire the labour for construction and gathering building material needs money. In many cases, these labourers demand cash rather than goods such as grain, soap, salt and so on. So, the kinsmen of the possessed usually wait until they obtain cash to pay for the material and constructors, thereby prolonging the duration of the illness of the victim. Beer for mizimu (ancestors) and the possessed person is brewed in a small pot separate from bigger containers (in which that of attendees is brewed). This is so because the beer for mizimu does not have yeast added into it, whereas that of the invited guests needs yeast. The explanations for putting and not putting yeast on the two different containers were not quite apparent. Sugar is also added in the beer.

 

Figure 2. An old woman beer brewing.

Purchasing these items from local stores its expensive, thus, villagers opt to purchase the aforementioned items in Gokwe where the prices are generally low. The cost of 2kgs sugar, for example, in Gokwe at the time of the study was US$1.90 and in their local shops was US$3.00. With the prevailing cash shortages purchasing sugar in Gokwe was a major challenge as it also involved transport costs to and from Gokwe. Villagers opted to exchange grain for sugar in local stores where they incurred heavy losses. In this case, barter trade is disadvantageous to the consumer as it is obvious that the measure of goods he/she obtains in return is usually inequivalent to that which he/she would have exchanged. 

Figure 3. Men constructing chidhumba.

When the possessed person sleeps in the chidumba, he/she is expected to ‘sleep’ together with a ‘black’ goat. Every morning the person and the goat are let out, the goat must not forage far from the chidumba. If the goat goes missing that implies that the person is not possessed. When the beer is ready for drinking, local people are invited to attend the Masabe ceremony. The goat is significant during the Masabe ceremony as it is part of the ritual. The purchasing of a goat is thus not necessarily regarded as a major challenge since most families own goats. The possessed person may own goats from which one may be used in the ritual. Those with no goats are bound to purchase one, and acquiring a goat due to cash shortages can be a challenge. The fact that the goat must be black forced those without black goats to either buy or exchange with others for a black one. 

The third and the last stage is the enactment of the ritual ceremony. The Masabe ritual ceremony is enacted during the night. It usually involves drum beating, dancing and traditional beer (Bugande) drinking especially by invited guests. The performance of the ceremony brings together all possessed by that particular form of Masabe to support the new victim as she/he expresses the nature of the possessing force. During the ceremony, the goat is cut on its neck and its blood (musiye) is drained and put into a bowl made of wood. The full goat meat is given to a close friend of the family (sahwira). The possessed is then given the musiye to drink it. It is alleged he/she must not vomit. If he/she vomits it simply means the person is not possessed by Masabe. A senior member of the family appeases to the alien spirits on behalf of the possessed person, at the same time drum (butimbe) beating and singing commences until the Masabe possessing the sick manifests itself. The manifestation of the spirits shows the kind of Masabe the person is possessed with. The possessed must act as the spirit behaves. For example, if one is possessed by a baboon spirit, he or she must behave or act like a baboon during that night. He/she must climb trees and roof tops etc. as baboons do. Thus, although Masabe spirits, like all other Tonga spirits, are considered as formless and bodiless before they afflict a person, they change their identity in the course of the ritual process from an immaterial being into a spirit of “something” which can take a great variety of embodiments. After the Masabe ceremony, the ‘sick’ person will then automatically get healed from her/his illness.

Figure 4. The chidhumba (a temporary shelter for a possessed person).
 
Case example: In Siachimupa Village, Mukuli’s (who had her Masabe ceremony enacted on the 5th of September 2017) illness, for instance, took about eight months. This period involved people having to consult medical practitioners and local prophets pertaining the cause of disease and its suitable medication. At which, no cause of the disease was detected. The final solution was to visit traditional healers who discovered that she was possessed by a dancing Masabe spirit and for her to be healed a Masabe ceremony was supposed to be held. Traditional healers had discovered this four months before 5 September 2017 when the ceremony was eventually conducted. The 4 months delay was because there were no funds to conduct the ceremony. Here we see the ways by which macro-economic hardships can negatively influence ritual processes. At this time, the Zimbabwean economic downturn coupled with cash crisis made it difficult for her kinsmen to acquire funds to purchase a black cloth, beads, black goat, and ingredients for beer brewing on time. Hence her ‘sickness’ was prolonged. Observing her skin, it had developed blistered. She had significantly lost weight, her legs were swollen and she could not even walk on her own.


Conclusion 

Cash crisis in Zimbabwe has not only impacted on the economy and politics of the country, but it has also impacted on ritual enactment. In modern day rituals enactment require materials and money is needed to purchase these material items. In the case of the Masabe ritual- ceremonies discussed above, the purchase of black goats, black cloths, beer ingredients became difficult due to the cash crisis. Purchasing these using mobile and plastic money in the nearest towns of Gokwe and Binga was even more expensive due transaction charges. Due to these challenges Masabe ceremonies were often delayed, procrastinated and avoided. The delay or temporal avoidance of these ceremonies impacted on the possessed individual as well as the entire community. Delays prolonged the sickness of an individual which further impacted on the psychologically. If a person by a ‘water’ spirit, they have the power to predict and intercede for rains; so if their ceremonies are delayed or avoided it means that the community as a whole is affected as it benefits from the person’s rain spiritual forecasts and rainmaking intercessions. 


Link to research article in African Identities, "Religious rituals and socio-economic change: the impact of the Zimbabwe ‘cash crisis’ on the BaTonga Masabe (alien spirits) ceremony."

Photo credit: All photos by author.


Monday, July 12, 2021

Opportunities and Risks of Conversational AI for Credit Unions: Empathy and Intimacy in Automated Financial Customer Service

by Scott Mainwaring, UCI and Melissa Wrapp, UCI, Filene's Center for Emerging Technology

As the use of digital channels continues to grow for credit unions, conversational artificial intelligence (AI) technologies provide an opportunity for improved service delivery and the potential for new service offerings such as financial advice.

EXECUTIVE SUMMARY

Conversational AI technologies create new ways for credit unions to serve their members, from providing alternatives to interacting with human agents to creating new channels for more tailored financial services. They provide opportunities to build upon the trust and appreciation members place in credit unions as more human-centered, nonpredatory, and community based. But conversational AI technologies risk invading members’ privacy and being frustrating and opaque.

WHAT IS THE RESEARCH ABOUT?

This exploratory study looks at existing consumer relationships with conversational AI and digital assistants, on one hand; and with credit unions, banks, and other businesses, on the other, to begin to sketch the dimensions of, and provide examples of, points within a “design space” of possible financial digital assistants. While operational hurdles remain high for credit unions to deploy these new technologies, the opportunity will continue to grow in coming years. 

Through ethnographic research with consumers, this report anticipates how credit union members might come to value, or reject, digital assistants. For this exploratory study, we focused on one main question: What are the implications of digital assistant technologies for how members and credit unions could relate to one another in the next five years?

Interviews covered three broad topics: experiences using banks and credit unions; experiences using digital assistant technologies; and reflections on the idea of a financial digital assistant and issues of privacy, trust, and potential bias. This report summarizes findings on these themes and provides insight into how credit unions could take advantage of digital assistants to improve service delivery and differentiate offerings by incorporating elements from their mission and value proposition into their digital assistants. The way forward is to develop particular product proposals and related data transparency policies that can provide members with a new understanding of what they could achieve by relating with their credit unions through “talking computers.”


WHAT ARE THE CREDIT UNION IMPLICATIONS? 

Credit unions have an opportunity to deploy digital assistants in ways that improve service delivery and member experience and provide new types of service offerings. In thinking about what types of digital assistants would provide the best fit for your credit union and member needs, keep the following research findings in mind: 

  • People like the promise of bots as part of a modern, organized, and simplified life.
  • The realities of existing bots fall short of expectations and can limit imagination.
  • People are resigned to the constant advance of technology without transparency or the ability to meaningfully opt out.
  • Relations with credit unions are valued for their human element and trustworthiness, even if this means older, clunkier tech.
  • The design space is complex, including diverse combinations of technologies, member needs, and business opportunities worth considering.
  • The idea of talking with/through bots is becoming mundane, but credit unions could pleasantly surprise members with unique service features.
  • Credit unions could tailor these technologies to show their strengths and to educate members not just about finances but also about data. 

In order to create a competitive advantage, credit union digital assistants would have to not only be useful and usable but also embody and express the core values of the credit union system. By building upon these core values of empathy and respect, credit unions could focus their development of digital assistant technologies in a way that creates differentiation, even with fewer resources than are available to larger financial services providers. 

We use findings from our research to generate design ideas that are meant to illustrate pathways worth exploring, developing, and evaluating: 

  • Build a helpful, always-accessible agent. This kind of digital assistant could serve as the voice of the specific credit union and provide basic support but also demonstrate the “members not customers” ethos of the credit union value proposition.
  • Provide an assistant to help members maintain, augment, and monitor their personal financial support systems.
  • Provide robot counsel. This financial digital assistant could serve as a “second pair of eyes” as members conduct transactions with any financial services provider, intervening if necessary but always being available for reassurance or advice.
  • Connect members to each other. This assistant would embody the credit union as a member cooperative, helping connect members to each other.
Access complete report, summary slides, and design principles here.