Kevin Cohee has high hopes for WiseOne, OneUnited Bank's recently unveiled artificial intelligence tool.
Cohee, OneUnited's chairman and CEO since 1996, believes AI will make his $756 million bank more competitive. He's also convinced AI can help bridge the persistent racial wealth gap that has dogged the United States and that widened during the COVID pandemic.
Headquartered in Boston, OneUnited is one of the nation's largest Black-owned banks.
For Cohee, financial literacy holds the key to closing the wealth gap,
"There's no question that the way we got here is a result of our country's systematic racism, but what's perpetuating it is our lack of financial literacy overall," Cohee said in a recent interview.
"What better than technology to solve what is essentially a lack-of-information problem? Technology is right where we need it to be to ask society to make a giant leap forward in the financial wellness of our people."
Launching WiseOne
WiseOne's October 2023 rollout pushed OneUnited toward the forefront of community banks in terms of AI usage. According to a
While not the largest African-American bank by assets — that's $1.04 billion-asset Liberty Bank & Trust in New Orleans — OneUnited does boast the largest customer base, with more than 89,000 accounts at March 31, according to the Federal Deposit Insurance Corp. With WiseOne, it aims to provide customers with tailored insights that boost their financial IQs, save money and, ultimately, build wealth.
"If you take a real financial expert, put them in a box, and force them all day, every day, 24 hours a day, seven days a week, to look at a single individual's financial matters, they're going to be coming up with stuff every day, multiple times a day, that are good ideas to help the person move forward," Cohee said. "That's in effect, what WiseOne is. It provides that kind of guidance."
"I think there's something there," Mark Treskon, principal research associate at the Urban Institute's Metropolitan Communities Housing and Policy Center, said in an interview. Treskon drew an analogy between AI and financial counseling, a model he said has demonstrated significant promise. "Even one [coaching] session has had a positive impact on what clients were doing," Treskon said. "It could be a pretty small intervention to actually get people on a different pathway. To the extent you're carefully automating that, there're a lot of parallels."
"I do think understanding the situation of the individual person and providing them rules of thumb or things to pay attention to can be helpful," Treskon added.
WiseOne's foundation is data. It aggregates and organizes customers' financial information, which is an eye-opener for many, according to Cohee. "The vast majority of people don't have access to their information," Cohee said. "They don't know what their revenues are, their expenses, their surplus, or their assets, their liabilities, their net worth. Above all, they don't understand how cash flows through their life."
WiseOne sheds light on day-to-day expenditures, like how much money is going toward subscriptions, or if a double-billing has occurred. But where WiseOne can truly be a game-changer, according to Cohee, is in offering deeper insights, about high-coupon debt for instance, or the need for life insurance. "If we didn't learn anything else in COVID, I think we have to agree bad things happen to good people," Cohee said. "Things like life insurance are not only critical to you, but to future generations."
A passion for financial literacy
Cohee likens WiseOne to a master class in financial literacy — sorely needed in the Black community and throughout society, he said. "It literally almost makes you want to cry, the lack of financial literacy in our overall society," Cohee said. The belief is deepfelt, so much so that Cohee, who began his financial services career as an investment banker with Salomon Brothers, envisions linking WiseOne, an in-house initiative available to OneUnited customers, with a program to promote financial acumen more broadly.
There appears to be no shortage of need. Various surveys have pointed to low levels of financial literacy across different societal groups. In January, for instance, TIAA released its eighth annual financial literacy and retirement fluency survey. Participants were asked 28 questions, with the average correct score about 48%. Older participants generally scored higher than younger, with the Gen Z cohort averaging 37%. Black participants averaged 43% correct scores compared to 65% for white ones.
"We're going to run a political, social campaign to organize people, particularly institutions like banks, particularly people like CEOs," Cohee said. "If you have really young people discovering their best friend is compound interest, you're gonna start to create a lot of wealth."
According to the Urban Institute's Treskon, there's plenty of evidence indicating financial literacy programs have value, though the biggest success comes when general concepts are set in a real-life context. "An element of concreteness, skills that translate to something actual, is probably going to be broadly useful," Treskon said. "Financial access is really key as well. That's just making sure people have opportunities to get into the more traditional financial sector, plug into it, get the value of it, and be aware of it…What tools are out there that I can actually use to improve my financial well-being?"
Strategic shift
For Cohee, WiseOne's launch and the plans around financial literacy are far from the game plan he pursued two decades ago. OneUnited, Cohee said, began as a roll-up, with the intent to build a national Black-owned bank with a physical presence in urban centers across the country. Cohee made acquisitions in Boston, Miami and Los Angeles, as well as a bid to acquire Carver Bancorp in New York. About 15 years ago, however, OneUnited changed its strategy dramatically, becoming an early adopter of the branch-lite banking model.
"We saw that this thing, technology, and its spawn, the internet, was not only going to change the way financial services were going to be delivered but it was going to change the nature of the products altogether," Cohee said. "People don't want to go down the street and around the corner to stand in line. They want financial information, seven days a week, 24 hours a day."
AI, Cohee added, marks another huge step down that path, with the potential to help users "make decisions that are better than they've ever been able to make in their life." Still, it represents a big bet for OneUnited, which reported net income totaling $4 million in 2023. While Cohee did not provide specific figures, FDIC stats show the company's noninterest expense, which includes information technology costs, increased about $3.2 million, to $31.4 million in 2023.
The longtime CEO is convinced AI will pay off. "The technology is so overwhelmingly good…that you have to integrate it into your business," Cohee said.
