Nearly 28% of credit unions are deploying AI for cost savings, more than big banks. 

Banks and credit unions do not approach AI the same because of a difference in margins, Mauricio Deutsch, senior vice president for banking and capital markets at fintech GFT Canada, told Bank Automation News. 

“Big banks are deploying AI tech for revenue generation while credit unions are deploying it in their back offices for cost management,” he said.

“Credit unions usually spend nearly 80 cents to earn a dollar,” nearly double of what big banks spend, Deutsch said. “One of the biggest priorities for credit unions using AI is to bring down the cost of operations.” 

According to GFT’s 2025 Banking Disruption Index Report, for which the fintech surveyed 200 IT decision-makers in the banking industry, credit unions are using AI for: 

• Operational efficiency: 27.7%; 

• Cost reduction: 27.7%; 

• Customer experience: 22.2%; and 

• Fraud mitigation: 11.1%. 

A major factor included in cost reduction is compliance, where credit unions are deploying AI due to the many regional and federal regulations they must follow, Deutsch said. Many big banks only have federal oversight, which reduces those expenses, he added. 

Automating lending processes while keeping a human in the loop is another use case for credit unions to implement AI, Deutsch said. 

The following credit unions have recently deployed AI: 

• $19 billion Mountain America Credit Union, for compliance and regulatory work; 

• $1.3 billion University of Michigan Credit Union, for customer service via chatbots and AI assistant for employees; 

• $840 million Blaze Credit Union, for providing wealth management tools to clients; and 

• $336 million First Northern Credit Union, for lending decisions. 

AI development 

Credit unions are developing AI tech slowly due to technology hurdles and limited tech expense capabilities, Deutsch said. 

To properly implement AI, many credit unions must modernize their infrastructure, which takes time and is costly. However, this is rarely the case for bigger FIs that can allocate more of their tech budgets to AI, Deutsch said.  

About 28% of credit unions are spending more than 40% of their tech budgets on AI initiatives, the report stated.

“The legacy infrastructure, that has to be modernized,” Deutsch said. “There’s a lot of investments that has to go in that.” 

Implementing AI tech can be expensive, so many smaller credit unions are working together to implement the tech and modernize platforms, Deutsch said. 

Even the use of specific AI tools will differ according to an FIs asset size, Deutsch said, adding that smaller FIs might look toward one AI vendor that can meet all their needs while big banks can afford to deploy multiple AI tools to tackle problems.

Check out our exclusive new bank industry data here.