When was the last time you felt anxious? You know the feeling: stomach churning, unable to focus. Unfortunately, many of us feel anxiety far too often these days, and technology is a driving factor.
While tech companies continue to insist they make our lives easier and more seamless, the reality is that most of us feel more anxious than we did before smartphones, apps, and AI. We find ourselves overwhelmed and distracted by persistent notifications, information overload, and real or perceived threats to our safety, privacy, and well-being.
Credit unions find themselves at a challenging crossroads. They feel pressured to lean into technological solutions to stay competitive, but in doing so, they also risk losing the human touch that, ironically, gives them a competitive edge.
Offering a mobile banking app is now table stakes, but automation and AI are, though not exactly new, frontiers that the industry is still cautiously exploring. Our advice? Proceed with caution. Automation might increase efficiency in some areas, but it also presents formidable risks to your brand reputation and member trust. For instance:
In 2019, Michelle Shell, a doctoral student at Harvard Business School, took a standard loan process and added personalized, automated text updates at key points along the way. Presumably more information is a good thing, right? Well, it turns out, like most things in life, the answer is, “It depends.”
Shell and her team tracked three different scenarios, comparing them against each other on the basis of how many of the approved loans were actually funded (in other words, the member accepted the loan and received the money). Here are the scenarios:
The automated text updates that included the loan officer’s name slightly decreased the success rate in getting members to accept their funded loans, whereas the texts that included contact information and the opportunity to make human contact increased the success rate by 12%.
Shell hypothesized that the reason for the drop is that a loan application is an anxiety-inducing situation. Automated reminders that you are being evaluated heighten than anxiety — ultimately damaging trust and hurting your business results. Yet the option of human contact had the opposite effect — it built trust and improved results. Also noteworthy was the fact that only a small percentage of the loan applicants in this scenario actually reached out to the loan officer. Apparently just the reassurance of knowing that you have the option makes all the difference.
In other cases, automation unnecessarily manufactures anxiety over something a member may not have otherwise felt anxious about. For instance, Credit Karma automatically emails its customers when their credit scores drop, even if that drop is relatively minor and just part of the normal ebb and flow of a credit score. While we can all agree that it’s a good idea to monitor your credit score, obsessing over every small fluctuation is counter-productive.
Marketing automation platforms promise hyper-relevance, but is that what your members always want? When these platforms aggregate passive data—such as cross-device browsing habits, real-time location signals, and social media interactions—to automatically trigger “personalized” messages, members are more likely to feel under surveillance than they are to feel supported.
Research into the "creepiness phenomenon" shows that when consumers cannot easily deduce how an automated system acquired their personal preferences, they feel their digital boundaries have been violated. Instead of driving loyalty, inferred targeting triggers psychological reactance, prompting users to actively clear cookies, use ad-blockers, or abandon the brand altogether out of fear regarding how their data is being collected and monetized.
Transactional data can tell you a lot about your members, but be careful how you use it!
If a consumer experiences a negative life event, like financial hardship, there is both a perceived stigma and likely layers of nuance to which AI is oblivious. Multiple studies highlight that acting on sensitive financial information leads to acute consumer anxiety. Instead of being perceived as attentive and supportive, your credit union is more likely to be seen as predatory or invasive, leading to high levels of negative word-of-mouth and brand hostility.
We have all experienced automated support loops that make us want to bang our heads against a wall. There’s automated support, and then there’s over-automated support, which relies on rigid rule-based chatbots, self-service knowledge bases, and multi-layered automated decision trees that are explicitly designed to deflect human interaction.
Megabanks are infamous for these, but more and more credit unions are joining the fray. The truth is, many of us would prefer to seamlessly solve our problems through an automated solution, but when we are reaching out, it’s because our problem is too complex for the automated system to solve, or because there’s been a breakdown in the automated process somewhere along the way. We need to talk to a human who can understand the full scope of the issue.
Then of course, there are the members who would simply rather talk to a human, regardless of the issue. Forcing them into an automated support loop will not induce warm and fuzzy feelings toward your brand.
We’ve all experienced FOMO (“Fear of Missing Out”) and we’re equally as likely to have experienced FORO ("Fear of Reaching Out"), where the prospect of seeking customer support induces as much stress as the original issue. Studies show that over 70% of consumers find navigating these automated barriers deeply distressing, particularly during moments of elevated need, often ultimately costing a company more than it’s saving in reduced operational costs.
As AI-driven customer service and self-service solutions flood the marketplace, keep these three core takeaways in mind:
Remember that your goal, first and foremost, is to make your members’ lives easier. Don’t chase every shiny new automation technology just because it looks pretty. If it adds to anxiety more than it alleviates anxiety, it’s not worth the potential harm to your members or your reputation.
This article was originally published in CUInsight.