The Three Lies of AI, Rate Cuts, and Big Changes Through Baby Steps
AI promises big changes, but are credit unions buying into misconceptions that could hold them back?
In this episode of Grow Your Credit Union, host Joshua Barclay and guest co-host Elizabeth Osborne, COO, Great Lakes Credit Union are joined by April Clobes, CEO, MSU FCU to tackle this week's three timely topics.
The Three Lies of AI
The AI buzz is everywhere—conferences, podcasts, even movies. But is the hype masking some uncomfortable truths? According to Ron Shevlin of Cornerstone, three big lies dominate the AI conversation: that AI brings immediate cost savings, is essential to remain competitive, and has already delivered extensive gains.
AI tools are transforming the credit union landscape, but their implementation must be thoughtful and strategic. Success with AI lies in focusing on specific, actionable use cases like member service chatbots, fraud detection, and process automation—not in assuming immediate cost savings or overhauling entire systems.
April Clobes shared how AI transformed member service at her credit union: "AI isn’t about replacing humans; it’s about creating efficiencies. At our credit union, we’ve reduced the equivalent of 65 live-chat agents with a chatbot, but humans are still vital for complex transactions."
Elizabeth Osborne cautioned against hesitancy: "If we say AI isn’t critical for competitiveness, we risk giving hesitant leaders an excuse to avoid it. AI is just another tool in the toolbox—and one that’s here to stay."
Are Rate Cuts A Game Changer or Business as Usual?
The Fed recently made a 0.5% rate cut, and rumors suggest more are on the horizon. For credit unions, this shift demands proactive strategies to manage rate volatility while meeting member expectations.
Short-term deposit rates are already dropping, but credit unions can take steps to balance financial impacts and member value. Offering innovative deposit products, like Savings Builder accounts that reward emergency savings, can strengthen member relationships. Additionally, preparing for mortgage refinancing by streamlining processes will position credit unions to serve members efficiently when demand surges.
April Clobes highlighted the importance of member experience: "We’ve implemented faster mortgage refinancing processes and innovative deposit products like Savings Builder, designed to reward emergency savings while blending rates for longer-term deposits."
Elizabeth Osborne underscored the role of financial education: "Members hear about rate cuts and assume it lowers their mortgage rate immediately. Our HUD-certified counselors help members navigate these misconceptions and create actionable financial plans."
Big Changes Through Baby Steps
Innovation doesn’t have to be overwhelming. Small, incremental improvements can drive meaningful progress, especially when guided by data and member feedback. Building a culture of innovation starts with leadership buy-in, clear metrics, and collaboration at all levels.
April Clobes emphasized the importance of long-term planning: "Innovation isn’t just about tech. It’s about improving every day. We survey employees, analyze member feedback, and pilot new ideas. Data drives every decision we make, ensuring we meet real needs."
Elizabeth Osborne echoed the need for accountability: "Leadership needs to embrace experimentation and set clear metrics for success. Without data-driven decisions and accountability, innovation becomes guesswork."
Credit unions can find success by blending in-house innovation with strategic partnerships, testing solutions through pilot programs, and fostering a culture of continuous improvement.
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FULL TRANSCRIPT
Intro
Joshua Barclay: Hello, credit union community. Here are your topics for today's show. First up, let's tackle the artificial elephant in the room. Is AI living up to the hype, or are credit unions getting more flash than substance? We're breaking down the truth. Then we'll dive into the Fed's rate cuts. More importantly, we're talking strategy. How can your credit union make the move to better prepare for a lower rate environment? And finally, we'll reveal how to ignite a culture of innovation at your credit union. Ready to shake things up? Let's get started.
Welcome to Grow Your Credit Union, the podcast where credit union leaders gather, learn, and grow. I am your host, Joshua Barclay, and I am joined today by a very special guest co-host per recommendation of Becky Reed. She was one of our very first guests on Grow Your Credit Union. I'm talking about the COO of Great Lakes Credit Union, Elizabeth Osborne. Elizabeth, hello.
Elizabeth Osborne: Hello. Thank you for the opening. So honored to be asked.
Joshua Barclay: So happy to have you back, Elizabeth, and I have to ask you the very first thing here. I have family from Illinois—southern Illinois—so every summer I go to the Carbondale area, which I know is probably not really Illinois. It's probably more like St. Louis at this point, right? So I go into the St. Louis airport, and everybody kind of chastises me about how I still haven't made my way to Chicago to visit my cousin Megan. So I have to ask you, if I go to Chicago this year, what is your favorite restaurant? What is the quintessential Chicago restaurant that I need to visit?
Elizabeth Osborne: My gosh, what a question, because Chicago is made for foodies. So there are fabulous restaurants everywhere. It's hard to go wrong, and it's also a big city, so it depends where you're staying. Going back to my initial upbringing—which, I started my career in the restaurant industry and started with Pizzeria UNO. The original—and there's a lot of banter back and forth on whether or not this is true, but I'm telling you it's the truth—deep dish was created by Ike Sewell at Pizzeria UNO. It is what it is, whether you like it or not. But the original Pizzeria UNO, downtown on the corner of Ohio and Wabash, you gotta try it. Go there, plan ahead, ’cause it takes a while to make it, ’cause they make it the right way, but it is delicious.
Joshua Barclay: Elizabeth, I'm gonna take your word for it, but I will also let you know I lived in New York City for about a decade. So I'm gonna bring that East Coast snobbery to this pizza experience. You better be ready for it. You better be ready for it.
Elizabeth Osborne: I'm ready.
Joshua Barclay: Hey, you know what else I'm ready for? I'm ready for today's show, Elizabeth. Let's bring on our guest today. We welcome the President and CEO of Michigan State University Federal Credit Union, April Clobes. April, welcome to Grow Your Credit Union.
April Clobes: Thank you for having me on.
Segment 1
Joshua Barclay: The AI hype—it's everywhere. It's at conferences, articles, movies, podcasts. It seems like the AI buzz won't die down, but some, like Ron Shevlin of Cornerstone, are pumping the brakes a little bit. In a recent LinkedIn post, Ron called out what he sees as the three big lies of AI. Here are the three lies that he proposes:
Lie number one: AI will bring immediate cost reduction.
Lie number two: We need AI to remain competitive.
Lie number three: We've already seen extensive gains from AI.
April, of these three big lies of AI, which one do you disagree with the most?
April Clobes: Likely number three, and I can explain why. We have used AI for a service chatbot for nearly five years now, and in member service—live agent chatting versus having a virtual assistant on the front end of the live chat—we've reduced, based upon the volume of chats that we receive, the equivalent of 65 employees for live chatting.
Joshua Barclay: Eat your heart out, Ron.
April Clobes: Now, is that going to replace every employee? Is it going to replace every aspect of service? No. I still have live chatting agents for really complex, unique transactions. But the reality is, at our organization—right? We have in our vision statement the phrase “human intelligence and artificial intelligence working together to create the member experience.” I think that's where we're headed. Some people think AI means no human intelligence ever again, and I think that's maybe what he's focusing on—it's not all AI solutions for everything that you're doing.
Joshua Barclay: Got it. Elizabeth, which of these three do you disagree with the most?
Elizabeth Osborne: Yeah, the whole post caught my attention, I have to say, but number two in particular. I totally agree with what April said, and we've had similar results, so I was excited to hear it. But number two concerned me because I feel that if we are going out there and saying that we don't need AI to remain competitive, then you're just giving a lot of leaders that are already hesitant to introduce AI another excuse not to introduce it. You have to really think about AI as just another tool in your toolbox to address a use case that I guarantee you have, whether it's on the lending side, whether it's member service, whether it's fraud detection, automation—it's endless. If you're not taking action today, you will get left behind. That's where I just worry you're enabling some people that are already worried—leaders out there that are worried about what it means and how to do it—another reason not to take advantage of this great technology that is here to stay and is just going to continue to grow and evolve over time.
Joshua Barclay: Yeah, a lot of the leaders I talk to have cold feet about it. They're worried about the security. They're worried about a lot of things. Also, I think that the AI hype is lacking a little bit of detail. What I mean by that—and this comes into my next question for both of you—there's a lot of talk about AI, but there's not a lot of talk about the use cases that people are pursuing right now. I don't want to hear about what's going to happen in 2030 or even 2027 or even 2026 or 2025. Let's talk about right now. What are the use cases? April, you mentioned the chatbot thing, but I'd love to ask you: What are some other areas of your credit union that you're going to be using AI strategically to improve upon?
April Clobes: Absolutely. So we do have service AI. It is designed for our online chat, but we have it in front of the calls. Then we have some work in the branches. We have the opportunity to utilize AI in service in the branches, meaning when you connect into the branch—we have a better lobby experience where you type your name in and what's happening. Can we integrate, if somebody is comfortable with a digital ID, and then also pull through, “These are the last five branch visits, so we can see that you typically do this,” and offer, “Is this why you're here, or did you come for a new reason today?” I think creating those efficiencies—we're working to use AI for some of that.
We're looking at AI for the opportunity to create processes that would have been manual reports and programs for our employees to work, and then help have those standardized, and then AI tells you when there's anomalies that humans need to pay attention to. To me, I don't think AI is making our organization have a competitive advantage. It is a tool that will help deliver what we think is our competitive advantage, which is service and speed and efficiency and taking care of our member. We can do that better and faster when we integrate some AI.
Joshua Barclay: I like how you talk about the human element, to your point, and that may be what Ron was—maybe he was just alluding to the idea of the removal of the human element. But I like that you have AI versus AI taking over everything. Elizabeth, how is Great Lakes pursuing AI right now? Are there any early projects that you're about to implement, or something you're doing right now that you're excited about?
Elizabeth Osborne: Much like what April just shared with us, our focus has been very member service. If we think about the credit union industry, we are known for providing our members with outstanding service. Anything we can do that complements that and aids our member-facing teams to do an even better job at serving our members today has always been the top focus. We did that by introducing Olive—I've spoken about her quite a bit. Much like what they have done at April's credit union, she sits at the carrier level, so that's that first initial conversation. We've not taken it as far as more of that in-branch experience. I'd love to dig into that more in the future.
Other areas that we're looking at—this is a strategy for 2025 for our credit union at Great Lakes. One important thing to note is that just today, for instance, my deposit and operations team has opened 50 tickets this year with my technology team for automation opportunities. I just think about the tremendous impact that would have once implemented, right? We're just struggling with people and time to get it done. But by using machine learning, by using RPA, the different variations of AI out there, we can propel forward to give us better results, so it's more accurate and we can act on it. That's really our focus. We'll continue on that, along with searching for a fraud detection tool.
Segment 2
Joshua Barclay: If you've been hiding under a rock, the Fed recently made a 0.5 percent rate cut, and rumors suggest more cuts are on the way. As rates drop, credit union leaders will need to adjust their strategies. So my question to you is, April, with these rate cuts in mind, what adjustments are you planning on making at MSU FCU to take advantage?
April Clobes: I think there are two elements to this. There's member experience and service, so I think that's probably the heart of what you're asking. But for us, we are also doing a lot on the finance and the financial tool side for managing the credit union's balance sheet in a volatile rate environment.
On the member side, even though not many people secured a new mortgage in the last two years, some did. As soon as the rates do come down, they're going to want to refinance. We have put in a process to modify and refinance with us that will be a quicker member experience. We'll also do some calculations on the current rate to the new rate to determine if it's worth your time and money for new closing costs and things like that. That's something we've launched to be ready if there is a mortgage refinance.
On the deposit side, as rates come down, short-term deposit rates are coming down first. We have a variety of programs for tying members to a longer-term deposit and making sure those are top of mind. We've also created a product called Savings Builder, designed to pay you a higher dividend on your first 2,000 on deposit and then come down—almost like a reverse of what you might expect, really to encourage people to have that emergency savings. Then it creates a blended rate after the first 2,000; the next rate tiers are lower. We're trying to still give people a really good rate for their on-deposit funds that they might want to have more liquid.
Just briefly on the finance tool side, some products are already priced right in the marketplace for members because the yield curve was inverted. Not all loan rates are coming down at the speed people are expecting. Not all deposit rates are coming up or down at the speed people are expecting. What we definitely know is our own organization's balances at the Fed—those deposit rates came down. You need to be planning to look at the impact of what you have in your short-term overnight funds and where you would redeploy for your own corporate investments. Then determine how much of the loan portfolio you will hold or sell based on the market rates, so you can continue to manage your interest rate risk. I think those are two important aspects of what's happening in the rate change environment.
Joshua Barclay: That was some great insight. Let's pass it over to Elizabeth. Elizabeth, what's your take on the lowered rates? They're coming down. What are you doing to prepare, or maybe you're not—I don't know.
Elizabeth Osborne: Yeah, it's such an interesting period of time. I don't think any of us can really say we've lived through this—it's just unheard of. The biggest challenge I see is what the average consumer in America really understands. When they hear on the news a rate cut's coming, I think most people that don't work in banking are like, “Oh, that means my mortgage rate—I can buy a house now.” In banking, that's not always the case. That's exactly like April stated, right? The short-term overnight funds, short-term rate versus long-term rates—they're not the same.
It's all about how you tell that story to your members to help educate and understand. I would expect that we will start to have those discussions with members about refinancing, just like what they're doing at April's credit union, to really help educate them on how to continue to evolve and prepare through this period of time. The hope is that rates continue to come down, right? As that happens, that will just broaden the different opportunities we can provide. For now, it's really about educating, giving members the opportunity to refinance if it's out there. Hopefully auto rates, that should also take some effect pretty soon, right? Looking into opportunities to lend there.
We are still slowly getting back into lending in this market, so I don't see a lot of change happening at Great Lakes Credit Union for some time. But we're preparing for it, and I think financial education is key. Anything we can do to help speak to members in their language, where they get it, will help them prepare for the future.
Joshua Barclay: Is there anything from a campaign standpoint that you're doing to educate the member? Is there something that you're really actively doing right now to educate them about what can happen with lower rates, refinancing, etc.?
Elizabeth Osborne: This all goes back to our HUD counselors. We’re one of only—I think it's six, it might be a little more now—HUD-certified credit unions in the United States. Our financial counselors work with members and non-members alike to help them build that financial plan, whether it be to get out of debt, to buy a house, whatever the case. That plan complements what's happening in the market right now, too. It's constantly evolving, and we're growing in that area. We continue to hire more and more counselors in our branches who can help. I expect that will continue because we have a lot of members that need financial assistance, and non-members alike. Anything we can do for that will be a heightened awareness and continued conversations with a plan that is set to help them prepare for those changes coming forward.
Joshua Barclay: April, I see you nodding your head. I'm wondering, do you yourself also have financial counselors and pursue that kind of strategy as well?
April Clobes: Absolutely. Our branch team is designed to be a full-service financial experience—consultative, helping members work through an education process to approach their financial tools and management. We also have a full team of financial educators that do community programming, either onsite or in community partnerships. Those folks are also working through how to help everyone budget, read credit reports, understand rates—everything along that line.
Elizabeth Osborne: Speaks to the mission. Love it.
Segment 3
Joshua Barclay: This is one of my favorite parts of the show. This is where we get to talk to guests about what they're doing within their credit union to try to give you some tips, some insights—maybe to help you with your initiatives inside your credit union. April, I think it's pretty safe to say that when it comes to innovation, you are definitely on the Mount Rushmore of credit union leaders. I've interviewed you in the past about your innovation lab. You do a lot of innovation in-house, so you're not always—no offense to other credit unions—but a lot of them, they're not building, they're buying. There's nothing wrong with that; it's a strategic decision. But you actually do a lot of building when it comes to innovation.
I talk to a lot of credit union leaders who desperately want to innovate the way that you do at MSU Federal, but for whatever reason, they don't know where to start, or they don't know what needs to be done. You're up on the mountain, and then you have a lot of credit union leaders at the very bottom thinking, “I want to do what she's doing, but jeez, there are a lot of obstacles.” For those leaders listening who aspire to follow in your footsteps, could you give us some key elements that you've implemented to foster the culture of innovation that you have at MSU Federal Credit Union?
April Clobes: Wow, that's a lot to unpack. Let me do the best I can to boil it down. One, I need to tell everybody the outputs you see today did not happen overnight. It's a long-term strategic plan we've had to get to this point. We do have a history of building. I think some of it originated from 20 years ago when we hired from the university, right? When the internet and technology were changing into software development, we had the opportunity to hire people to build for us, and the cost analysis at the time was beneficial. I would recommend that everyone look at that. Certain things we build, certain things we buy. It's how you integrate them together that's also critical.
For a culture of innovation, you need to share it with the leadership and the board. What I hear the most is from maybe a person one or two levels below my direct reports: they say they don't get support from the CEO and the executives to do innovation. You have to spend time with your leaders to make sure everybody wants to go on an innovation path. You can say it, but you have to really mean it and do it.
We also involve everyone in the organization. Innovation isn't all the fun, exciting technology things you see in the marketplace. It's one incremental improvement every day on something we're already doing. A lot of our employees have input into what that is. We survey employees, get ideas from employees, and do member feedback.
The other thing I would say is it's a data strategy. We don't partner with a fintech or make our own technology if we don't see a member value and need in it. I always promote a few of our fintech partners because they're great use cases. ChangeEd is a partner that's been in the marketplace for a long time—they round up and pay down your student loan. I saw them speak somewhere, came back, had our team look at our transactional data to see if our members were actually utilizing this service. Of course, we serve young people who went to university, so they were. It wasn't just a gut instinct; I backed it up with data. Then we used that for our partnership.
There are a lot of technology options for everyone to partner with or integrate with. We take it all from a data-driven decision and member engagement. We ask members if they would use it, we pilot, and we set metrics before full deployment. There are a lot of steps in that. We're always happy to share with anyone in the industry. I do lots of conversations—I've talked to leadership teams, I've talked to board members, I've talked to anyone who will ask me. We'll talk through our day-to-day steps because it's really important.
Joshua Barclay: I really appreciate what you said about the incremental steps. It's very easy to get overwhelmed when you think you have to blast off to the moon with one fell swoop. The fact that you're guided by what the member needs on a day-to-day totally demystifies a lot of the process when it comes to innovation.
Elizabeth, you are no slouch over there at Great Lakes. I see you at conferences, I see you on talks—you're very forward-thinking. Give us some insight about your methodology for how leaders can innovate and improve.
Elizabeth Osborne: Yeah, I just have to say, first, I was so excited to hear what April had to say because, April, you are truly known as the leader of an extremely innovative credit union. You're innovative, but you're also very involved in more traditional growth. The reason I say that is I drove by your Lincoln Park branch that's being built—it looks very nice—on Friday.
April Clobes: Your organization has the only other real credit union presence in the city. You know for us, it's just we have so many Spartans there. We were trying to serve our existing members, not to invade anyone else's location.
Elizabeth Osborne: It's a big city, lots of room for credit. We're good. Yeah, no, it's great, and it's a great area. Thank you for that.
Just really excited to hear your thoughts on that. One thing that stood out to me is certain things that you build and certain things you buy. I'd love to separately, if we could, spend time to learn more about that, because we're in that asset size where it's a tough size, right?
From my experience, I'm seeing in the credit union industry that you really need leaders, you need executives, you need a CEO that's very open to experimenting and trying out new technology where it makes sense—where the calculated risk, the gain of that risk, makes sense for your membership base. We've done that through investments in technology, in which we invest in CUSOs, then we also try it out with our members. That's been a good way for us to really evolve.
When I first started here, we were sometimes going all in, and then we were like, “Oh, maybe we should have tried something a little different first,” or “Maybe experiment a little bit more.” Much like what April shared, piloting is key. Use data to make better decisions, measure against that, set metrics. I run a PMO group, and my PMO team works really hard with the business to set those metrics for projects. Then you gotta hold yourself accountable to those metrics and use data to do that. That is key. Some credit unions don't have that insight at the leadership level, and that's so important.
I do think that's why you're seeing CEOs starting to be replaced as they're retiring with more tech leaders. You're seeing tech teams with more technology background, and that is key to our future for the industry.
Closing
Joshua Barclay: That brings us to the end of the show. That means final thoughts. April, what final thoughts would you like to share with our listeners?
April Clobes: I think final thoughts for me are really focused on our last segment, which is the technology. I think it is critical to understand what technology is available to you, but also what the application is in your organization—whether that's AI development, whether that's bringing in fintech partners or new technology, whether you build it, whether you buy it. Data-driven, metric-based decisions will help create a competitive engagement from your members, right? Everything we're doing is because I want to retain members and keep them focused on doing business with our credit union. I don't want them to leave us because they can get it better somewhere else, right? So I think you need to understand your members, you need to do that research and homework, and then appropriately deploy the technology.
Joshua Barclay: And April, if somebody's listening and they're thinking, “I need to get in touch with her. She blew my mind,” how—what is the best way that somebody can get in touch with you?
April Clobes: Oh, it's super easy. I share my personal contact with everyone, but my email is literally my name: april.clobes@msufcu.org. I read all my own email. Shoot me an email, and we'll spend time connecting and talking through what I can help you with.
Joshua Barclay: Excellent. And Elizabeth, final thoughts.
Elizabeth Osborne: Yeah, I loved our conversation about AI use cases and then ending that with innovation really ties the two together. So many credit unions are in strategic planning right now, or you're really in the heat of it like we are. If AI and innovation are not part of your plan, you need to rethink your plan. I really firmly believe that because it should be a driver for some parts—not all, but some parts. So don't leave it behind. Don't get left behind.
Joshua Barclay: Love that. And how can we get ahold of you?
Elizabeth Osborne: Send me an email, much like April. So elizabeth.osborne@glcu.org.
Joshua Barclay: Excellent. I want to thank April for coming on the show today. I want to thank Elizabeth for being a special guest co-host. And I want to send a special thanks to you, our listeners, for continuing to support and listen to another episode of Grow Your Credit Union. Remember, if you liked the show, please follow us on your podcast player of choice, and share an episode with someone who would benefit from listening. If you want to be a guest or would like to talk about sponsorship opportunities, head over to growyourcreditunion.com to learn more. Thank you for listening, and we will see you next time. Take care and buh-bye.