The fintech industry has been through revolutionary changes with the integration of artificial intelligence functionalities. Startups want to use AI to improve efficiency, reduce risks, and improve customer experience in the domain of fintech. For example, AI-powered chatbots could help in managing customer queries round the clock.
Some of the top AI fintech startups have been changing the way people view the use of AI. Artificial intelligence could reduce the need for human agents in customer support and save costs. On the other hand, fraud detection systems powered by AI could evaluate large volumes of data to identify anomalies that showcase fraudulent behavior.
The answers to questions like “How are fintech companies using AI?” would also point to the advantages of personalizing financial services and investment recommendations to each customer. Artificial intelligence could help in increasing customer engagement and satisfaction with a fintech solution.
Startups with the power of AI could achieve a promising improvement in competitive edge alongside capabilities for disrupting traditional financial services and institutions. Let us find out how AI could help fintech and discover the details of top fintech startups that leverage AI.
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How Does AI Help Fintech?
The first thing you must learn before identifying the top companies using AI in fintech is a clear impression of the ways in which AI complements fintech. Is artificial intelligence a new thing in the domain of fintech? To the surprise of many, artificial intelligence and machine learning have been a crucial part of fintech for almost two decades.
Have you ever thought about how fintech startups could offer cutting-edge financial products and services? Apparently, you might have missed some AI in fintech examples that showcase the importance of artificial intelligence for fintech. Fintech and artificial intelligence work in unison to develop innovative solutions that empower the domain of fintech. As a matter of fact, the Cambridge Centre for Alternative Finance claims that almost 90% of companies in fintech use artificial intelligence.
Artificial intelligence introduced a wide assortment of benefits in the domain of fintech, including faster fraud detection, personalized customer service, improved accuracy, and better productivity. For example, AI-powered data entry ensures an 80% improvement in accuracy and speed. According to a research report by McKinsey, around 56% of businesses use AI in some form of business function. Therefore, you could notice how AI could serve promising value-based improvements in the fintech sector.
Notable Use Cases of AI in Fintech
Before you dive into the details of fintech companies using AI, it is important to learn about the practical methods for implementing AI in fintech. The most common use cases of artificial intelligence in fintech include,
- Financial reporting
- Credit scoring and loan assessment
- Robotic Process Automation
- Algorithmic trading
- Fraud detection
- Data Analytics
Each use case of artificial intelligence in fintech could offer viable improvements over traditional financial systems. For example, AI could utilize massive volumes of data to determine the ideal credit score for loan application assessment. The best AI fintech startups powered by AI would have a clear roadmap for the type of use case of AI they want in their operations.
In the loan application assessment, AI could account for many other factors, such as financial health and previous loans. Furthermore, AI could also help in understanding customer data better with the value advantages of sentiment analysis.
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Top Fintech Startups Using AI
The discussions about questions such as “How are fintech companies using AI?” would involve references to the different use cases of AI in fintech. However, you would need a practical impression of how fintech startups use AI. It would help you understand the best practices for the adoption of artificial intelligence in the domain of fintech.
The operating models of such startups could serve as AI in fintech examples for understanding how artificial intelligence delivers business value to fintech startups. Here is a list of the top ten fintech startups that leverage AI in different ways to their advantage.
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ZestFinance is one of the first additions among fintech startups that leverage AI. It could help financial service providers in implementing better credit modeling and risk profiling. The effective use of machine learning helps ZestFinance ensure that companies can cut credit losses, have better efficiency in underwriting processes, and increase approval rates. It is one of the most popular AI fintech startups with the primary goal of building an equitable financial system. ZestFinance aims to offer transparent and fair credit access to users.
The fintech startup has created a Zest Automated Machine Learning (ZAML) platform. It serves as an AI-based underwriting system that could support businesses in evaluating borrowers with little or no credit information. On the other hand, it could utilize machine learning for the analysis of multiple data points, including traditional as well as non-traditional data. Therefore, it could ensure accurate predictions for credit risk.
SESAMm is one of the pioneers in fintech startups that utilize AI. It utilizes artificial intelligence and big data to allow investment that could provide organizations with the ability to make timely decisions. SESAMm is one of the top AI fintech startups that can use AI for tracking ESG, positive events, and risk controversies. The most striking feature of SESAMm is the off-the-shelf platform, TextReveal. It helps empower users to generate AI insights through web-based data on millions of companies within a minute.
SESAMm also offers sentiment analysis algorithms that use deep learning techniques. It also utilizes Named Entity Recognition or NER and disambiguation techniques for detecting the relevant companies in different languages.
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The next prominent addition among the fintech startups that use AI is Kasisto. It has developed a conversational AI platform known as KAI, which has made significant developments for improving customer experiences within the domain of fintech. KAI is one of the interesting examples of fintech companies using AI in an innovative approach. It helps banks and financial institutions reduce contact center traffic by offering self-service options and solutions to customers.
With the help of KAI, Kasisto offers access to account information alongside making payments and performing other financial transactions without any human intervention. AI-powered chatbots could help with comprehensive analysis of customer data. In addition, they could also offer tailored recommendations for helping customers in making informed decisions.
HighRadius is also an emerging player among fintech companies that leverage AI to their interest. It is a SaaS fintech startup that utilizes AI-based autonomous systems to ensure automation of the Treasury and Accounts Receivable functions. The list of best AI fintech startups powered by AI would be incomplete without HighRadius. It serves as a cloud-based Autonomous Software solution for the CFO office. The solution has changed the conventional approaches followed for order cash treasury processes and the documentation-to-reporting processes.
The fintech startup could ensure measurable business outcomes, which serve as a clear impression of how your investments in fintech AI are performing. HighRadius serves promising value-based improvements such as reducing DSO, improving productivity, and optimization of working capital. Furthermore, it also ensures reduction of month-close timelines as well as the bad debts. HighRadius could help in using AI for automation and optimization of complex financial processes.
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Vectra AI is another dominant startup in fintech that has a close relationship with artificial intelligence. Interestingly, Vectra AI is a cybersecurity startup that utilizes the power of AI for detecting and preventing threats of cybersecurity risks to financial institutions. You can find Vectra AI among the ranks of most popular AI fintech startups for its cyber-threat detection platform, Cognito.
The platform helps in the automation of threat detection for revealing hidden malicious agents for financial institutions. It could ensure faster investigations in response to security breaches in fintech. On top of it, Cognito could also identify the information which has been compromised.
The most valuable advantage of Vectra AI is the facility for identifying hidden attackers. It shows an interesting example for understanding responses to “How are fintech companies using AI?” with the use of advanced machine learning algorithms. Vectra AI leverages the same approach as Cognito for detecting subtle changes in the patterns of user behavior and network traffic.
Most important of all, the benefit of automated threat detection could empower fintech companies to deal with security threats in real-time. As a result, it could help in reducing the response time by significant margins alongside improving the effectiveness of cybersecurity.
Enova is one of the leading fintech platforms that could offer advanced financial analytics alongside credit assessment. The startup has developed the Colossus platform, which utilizes artificial intelligence and machine learning. Colossus is one of the notable examples of AI in fintech examples for understanding the impact of AI in fintech with advanced analytics.
It helps in leveraging AI and advanced analytics to support banks, consumers, and businesses in ensuring responsible lending. Enova has the vision of providing credit to the people who have stayed out of the reach of traditional banks alongside financial institutions.
Artificial intelligence and machine learning can help Enova in analyzing the creditworthiness of a borrower according to different data points. The important data points considered by Enova include employment status, income, and credit history. It could ensure faster and more efficient processing of loan applications, which could reduce the time required for approval of loans.
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The list of top fintech startups using AI would also point to Bud Financial. It has created an open banking platform that helps users in accessing data from desired financial products. The company is one of the top AI fintech startups that could ensure data security alongside leveraging advanced encryption techniques for safeguarding user information.
Furthermore, Bud Financial has been developed with privacy as one of the important highlights. It utilizes anonymous data only for training the machine learning models. Bud Financial also emphasizes accountability and transparency. The fintech startup is committed to a vision of responsible innovation in banking and fintech. Therefore, it complies with all standards for communicating the ways they use client data to the clients.
The reputation of Upstart as one of the top additions among AI fintech startups relies on the facility of transparent, fairer, and inclusive lending practices. It aims at offering easier access to credit required for achieving desired financial goals. Upstart is one of the most popular AI fintech startups that could help in encouraging the use of AI in fintech.
Upstart does not focus only on the years of credit and credit score. It also uses other data points such as the area of study, schools attended by the users, and job roles in the past for creating credit profiles. As a result, it could offer more accurate and personalized credit scores.
Signifyd also specializes in the generation of customer risk profiles for eliminating concerns of fraud alongside reducing customer abuse. It utilizes the Commerce Network for combining data from more than ten thousand merchants.
As a result, it could leverage big data and machine learning to offer a 100% financial guarantee against fraud on approved orders. The fintech startup could easily identify high-risk transactions by leveraging the power of AI and could fight against fraud in real time.
The final addition to the list of fintech companies using AI would be Affirm. It is a consumer application that offers loans for making purchases at different retailers. However, it presents a unique advantage by using multiple machine learning algorithms to facilitate credit underwriting. Comprehensive analysis of large volumes of data would ensure that Affirm provides faster and more accurate credit decisions.
Most important of all, it has become the BNPL (Buy Now, Pay Later) partner of Amazon, which allows customers to split their payments into multiple installments. In addition, Affirm also brings many other features for improving customer experience, such as no hidden fees and transparent pricing.
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The outline of the best AI fintech startups powered by AI shows that artificial intelligence is a mandatory tool for pushing fintech to the next stage. Customers want faster, secure, and personalized access to fintech services. At the same time, artificial intelligence applications have been evolving to fit the needs of clients. Learn more about the benefits of artificial intelligence in fintech and different use cases of AI in fintech now.
*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!