What Credit Unions Should Consider for Enhanced Protection: AI in the Future of Cybersecurity

At Curql, we recognize the power of technology to transform credit union service delivery. Our fintech partners' innovative technology solutions enable credit unions to provide more robust and personalized digital member service, facilitating faster and more efficient delivery of solutions to help the members reach their goals.

As artificial intelligence (AI) is increasingly integrated into various technology, there is nearly unlimited potential for its use in credit union operations. AI can take tasks that are tedious and time-consuming and complete them in a matter of moments automatically. It can help credit unions analyze data and enhance member support. Our fintech portfolio company DefenseStorm’s customized, AI-based cybersecurity solutions can even assess risk and detect fraud, making the credit union and its members more secure.

However, just as any technology can pose a risk for credit unions, so can AI, whether leveraged by bad actors or implemented without the necessary preparatory steps. Some top industry security concerns about AI include:

• Failures to update. Only when AI tools and rules are brought up to date in accordance with policy, regulations, or other changes can it function properly. To minimize risk, credit unions must ensure their staff members are fully trained and aware of policy or process changes so that the technology can be monitored accordingly.
• Weaponized AI. Just as credit unions can use AI to benefit their members and operations, criminals can target financial institutions and their members. AI can help scam artists craft more persuasive messaging for social engineering attacks such as phishing emails.
• Gaps in expertise. Credit unions’ in-house IT and security teams have their hands full with keeping member data safe on various platforms. When AI is added to the mix, they are tasked with learning how to manage and safeguard an even more complex system.

Capture the Benefits

Despite these risks and challenges, the answer is not to shun AI. DefenseStorm emphasizes that artificial intelligence can perform a wide variety of tasks within the cybersecurity space, including risk assessment, governance management, threat surveillance, and fraud detection.

In one case study, Community West Credit Union found that implementing AI modules from DefenseStorm helped them streamline and consolidate security tools, save time, gain greater insights into security data, and heighten security as the credit union prepared for an examination that would elevate it to the next National Credit Union Administration peer group.

“We had a lot of disconnected systems that didn’t talk to each other and a lot of reporting requirements. It would take our IT manager 40 – 60 hours to pull all our logs and graphs and put everything into documentation for a two-hour meeting. Now, that is all built into the system,” said Community West CU Chief Information Officer Bob Listen of his credit union’s experience with AI in cybersecurity with DefenseStorm. “AI helped us mature our security posture and allowed us to react quicker. It’s also given us visibility into things that we had no idea were happening before,” he added.

Protect Proactively

In light of the recent NCUA report on Cybersecurity and Credit Union System Resilience, credit unions are encouraged to take note of the measures outlined by the NCUA to strengthen cybersecurity within the federally insured credit union system. The report highlights various efforts, including the implementation of scalable Information Security Examination procedures, training and support programs, and the cyber incident notification rule.

As with any technology, credit unions must mitigate manageable risks with intelligent strategies to take advantage of the benefits of AI. Incorporating the following best practices can help credit unions minimize the risks of cyberattacks associated with the adoption of AI:

• Stay vigilant. This includes conducting routine risk assessments that consider evolving technologies both within the credit union and those known to be used as threats against the credit union.
• Collaborate. Holding regular conversations and sharing knowledge within the industry are great ways to ensure your credit union stays current on AI trends and risks to credit union data.
• Encourage learning and experience. In line with the NCUA's efforts, credit unions should continue encouraging learning and experience among their employees, providing thorough training programs to help staff gain comfort with AI-based tools and understand their limitations.
• Know your enemy. Learn as much as you can about the risks posed by AI, such as deepfakes, phishing attacks, and malware.
• Stay ahead of the curve. Outdated technology utilized at some financial institutions opens security gaps. Investing regularly in updates to technology can help credit unions stay safer and be well-prepared to defend themselves against security threats.