Board Briefing — AI Strategy Authorization Request

Heritage Community Credit Union
Meeting date: August 21, 2026
Presenter: Patricia Chen, President & CEO
Prepared with: Seiche Advisors (Journey deliverable)

Why the board is seeing this now

HCCU's executive team completed a Seiche Advisors Compass session in July 2026. The institution has vendor-embedded AI today (fraud monitoring, digital FAQ) but no AI policy, no inventory, and rising BSA analyst workload. Peer credit unions are deploying GenAI at 59% (Cornerstone Advisors, Jan 2026). The risk of inaction — competitive gap, examiner scrutiny, fraud exposure — exceeds the risk of a governed pilot.

What we are asking the board to approve

Item	Request	Investment
Journey engagement (bundled)	2-week Strategy Package + 12 months Continuum Plus ($53K stated value)	$25,000 (Compass credit: $5,000 applied → $20,000 net); Continuum renews Year 2 at $28K/yr
Year 1 AI program	Governance + two controlled pilots	$185K–$265K (midpoint $225K)
Policy adoption	AI acceptable-use policy (Journey deliverable → legal review → board ratification)	Included in Journey

Strategic rationale (three points)

Regulatory window is open. No new AI-specific NCUA rule is imminent. Examiners expect documented governance under existing vendor management and BSA programs — not a big-bang AI transformation.
BSA/AML is the highest-ROI first move. Alert volume is up 22% YoY; analysts spend ~60% of time on false positives. A 90-day POC on sanctions alert triage targets 40% analyst time recapture without replacing core BSA systems.
Governance before customer-facing AI. We will adopt policy, complete an AI inventory, and run an internal Copilot pilot before any member-facing GenAI deployment.

Year 1 plan at a glance

Quarter	Milestone
Q3 2026	Journey complete; policy adopted; AI inventory done
Q4 2026	BSA/AML POC live; 15-user Copilot pilot
Q1 2027	POC results to board; scale or stop decision
Q2 2027	If POC succeeds: expand BSA module; evaluate lending IDP

Expected Year 1 ROI: 2.5–3.5x on BSA and productivity pilots combined (Seiche benchmark, community FI $1–3B).

Risks of deferring 12 months

Continued BSA backlog growth and potential overtime / contractor costs
Shadow employee use of public AI tools without policy guardrails
Inability to answer examiner questions on AI inventory and governance
Member experience gap vs. peers deploying authenticated AI in digital banking

Board vote requested

RESOLVED: That the Board authorizes management to (1) engage Seiche Advisors for the Journey engagement at a net cost not to exceed $20,000 after credits, and (2) allocate up to $265,000 in the 2026–2027 budget for AI governance and the two approved pilots, with quarterly progress reports to the Board.

Motion	Second	Vote
		For · Against · Abstain

Supporting detail: Strategy Package (30 pages) and Pilot Specifications available in board packet.