PenFed to bank on gen AI for hyper-personalization

Pentagon Credit Union (PenFed), the second-largest credit union in the US, is looking to generative AI to transform how it interacts with its customers. Its vision? To create a new, cost-effective channel that helps meet members needs — and learns as it does so, to the benefit of members and the credit union itself.

“What’s happened in our business over the years is every channel is expensive and it doesn’t ever replace another channel. It’s just additive,” says Joseph Thomas, PenFed EVP and CIO, who notes that today 80% of PenFed’s interactions are digital, 15% are via call center, and 5% still rely on physical branches. “But we realized that with AI, we could add another channel of engagement but very cost effectively. We could add chat with a bot-enabled interaction to solve the early, simpler questions.”

Even with more than 2.9 million members, as a credit union PenFed doesn’t have the resources of a traditional bank. It doesn’t have an innovation lab or center of excellence to help it develop new technologies. But it does have more than eight years of experience leveraging supervised ML to support credit risk modeling and decision making. And in that time, it also adopted Salesforce.

“Salesforce is not just a CRM for us,” Thomas explains. “Salesforce is a digital platform, and it already had capabilities with Einstein as part of the platform, so we could cheaply and efficiently get into AI-enabled chatbots.”

The AI journey

The credit union started its new service strategy by deploying an Einstein-powered chatbot internally to support its IT service desk. The bot, which leveraged PenFed’s body of knowledge articles to assist end-users with tasks such as password resets, proved its effectiveness immediately and now handles about 25% of common internal service requests, freeing up service desk staff to focus on more complex tasks.

Once Thomas’s team developed experience with the platform, it began rolling out bots externally to the credit union’s members. Today, bots handle nearly 40,000 sessions per month, providing loan application status, product and servicing information, and technical support.