A Board Member’s Guide to Asking Smart AI Questions

If you’re a board member at a community bank it would be next to impossible for you not to have read about artificial intelligence (AI) by now. So you may have shown up at your board meetings wondering:

“Should the bank be doing something with this AI stuff?”

The answer is: Yes.

And if management hasn’t briefed you on how the bank is using or plans to use AI, that should be cause for concern.

Most boards are made up of experienced professionals, many of whom aren’t tech specialists, and that’s okay. You’re part of a group of people with diverse experiences and perspectives. You’re not supposed to be experts in machine learning. But you are supposed to ask good questions, offer oversight, and help ensure your institution is staying competitive.

Let’s walk through what you need to know to steer the conversation more effectively without needing a computer science degree.

What Exactly Is Generative AI?

You’ve probably heard of ChatGPT or Copilot, or maybe you’ve seen how AI can create images, answer complex questions, write computer code, summarize long documents, or create the goofy custom action figure pictures that are popular on LinkedIn right now. That’s “generative AI”—a type of AI that creates new content based on patterns it learns from huge amounts of data.

But AI is broader than that. Banks have used AI for years to detect fraud, score credit, and personalize marketing. What’s different now is how accessible and powerful these tools have become.

Why It Matters to Community Banks

AI is reshaping how banks operate—big and small. Here are a few ways AI is already being used in banking:

  • Customer Service: AI chatbots that answer basic account questions 24/7.
  • Fraud Detection: Identifying unusual activity in real-time.
  • Document Processing: Automatically reading and summarizing loan applications or compliance paperwork.
  • Marketing & CX: Targeting customers with the right offer at the right time based on behavior, or creating content to appeal to prospects.
  • Operational Efficiency: Streamlining internal workflows, from HR to finance..

The rewards? Lower costs, happier customers, and better risk management. But if you’re not at least exploring AI, you risk falling behind competitors who are.

What Are the Risks?

AI isn’t magic. It brings real risks you need to be aware of:

  • Bias: AI can make unfair decisions if it’s trained on biased data.
  • Privacy: Using customer data for AI must follow strict rules so that you don’t annoy either the regulators or the customers.
  • Over-reliance: Bad decisions can happen if humans blindly trust AI outputs.
  • Vendor Risk: Many banks will need to rely on third-party AI vendors, so vetting matters.
How Should Boards Engage?

You don’t need to understand how AI works—but you do need to understand how it fits into your bank’s strategy, risk, and readiness. Think of your role as guiding the why and what, not the how.

Here’s a simple framework:

  1. Strategy & Alignment
  • Is our AI work helping us grow, serve customers better, or cut costs?
  • Who on our team owns AI strategy? Is there an “AI Council” or leadership group?
  • Are we chasing shiny objects, or investing in something with clear ROI?
  1. Risk & Oversight
  • Who is responsible for assessing AI risks like bias, compliance, or data misuse?
  • Are we tracking AI performance and reviewing any unexpected outcomes?
  • Do we have an ethical framework guiding how we use these tools?
  1. Organizational Readiness
  • Do we have the right people, training, and culture to make AI work?
  • Are we helping staff understand how AI may change their roles?
  • If we’re relying on vendors, how well are we managing that risk?
What Should You Be Asking?

Next time you sit in the boardroom, don’t just ask “Are we doing something with AI?” Try these instead:

  • “How does our AI activity align with our top business goals?”
  • “Who on the management team is accountable for AI progress?”
  • “How are we measuring impact and managing risks?”
  • “What’s our timeline for near-term wins and long-term strategy?”

And if the answer is: “We’re not doing anything yet” — then it’s time to ask why.

Tips for Getting Smarter About AI

You don’t need to become an AI expert, but a little literacy goes a long way. Here’s how to stay informed:

  • Invite Guest Speakers: Bring in AI experts to present periodically.
  • Request Quarterly Updates: Ask management for a simple dashboard showing where AI is being used and explored.
  • Peer Learning: Talk with directors at other banks. What are they doing?
  • Rotate Topics at Board Dinners: Each director brings one AI-related insight to share.
Final Thought

AI isn’t just a tech issue. It’s a strategic one.

The best boards aren’t trying to run AI projects—they’re helping shape the bank’s future by asking smarter questions, guiding priorities, and making sure leadership isn’t asleep at the wheel.

If your management team hasn’t brought AI to the table yet, it’s time to put it on the agenda.

 

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