The novelty of artificial intelligence as a game-changer may have cooled, but it continues to be a sought-after element among startups graduating this year from Fintech Innovation Lab New York.

The recent demo day involved nine companies that developed ideas that included Defender of reality cybersecurity resources to detect AI-generated content used by malicious actors to commit fraud and Qumis with its AI-assistance platform for insurance policy analysis.

You can find a list of companies that perform demonstrations Here.

While not all startups in this year’s class focused on AI, the technology’s greater impact was to be expected, as demonstrated by the 2023 class of the laboratory diving into this space and the general attention that artificial intelligence receives nowadays.

In a separate interview after the demo day, Maria Gotsch, co-chair of the FinTech Innovation Lab, said conversations with institutional partners in the fall help shape how each candidate class takes shape. “It’s no surprise that in almost every conversation we had with the 40 financial institution partners, AI came up as something they were interested in,” Gotsch said. “So when we went to market, we set out to target those types of companies because it was a high priority for everyone.” Those priorities include looking at potential AI tools that could help financial institutions meet regulatory demands, she said, such as spotting deepfakes and building resources to protect against emerging risks.

Related:Accenture Report: Cloud and Edge Can Drive Reinvention with AI

Gotsch is also president and CEO of the Partnership Fund for the City of New York, one of the co-founding organizations, along with Accenture, of the New York lab.

“What we heard from financial institutions was definitely also a theme of wanting to learn from the startups that are out there at the forefront of these different perspectives,” said Steven Murphy, senior managing director, Financial Services Industry Solutions Lead at Accenture. Murphy is also the lab’s executive sponsor.

Accenture is no stranger to artificial intelligence, having created a series of deep investments in this space in recent years, keeping an eye on the potential that foresees.

Murphy said about 90 percent of the companies in this year’s class of finalists for the lab were either direct AI players or using AI as part of their solution, which fits well with the needs of incumbents in the financial industry. “While there was an element of financial institutions learning what was going on and just exploring, understanding the technologies better and how they could fit into the regulated environment, we saw an interesting event as we were wrapping up this year’s class,” Murphy said. “One of the companies was actually acquired by a financial institution.”

Related:Artificial Intelligence, Data and Cryptocurrencies in Play at Fintech Innovation Lab Demo Day

Acquired by NuBank for undisclosed terms, Hyperplanewhich did not demo, developed a platform that uses specialized LLMs to enable financial institutions to deliver personalized experiences to consumers. “There was definitely interest in bringing that capability and talent in-house,” Murphy said.

The financial industry can tend to be reticent to adopt new technologies or methodologies, especially given the regulatory scrutiny that many financial institutions may face. While AI may open up new frontiers that do not have deeply entrenched security barriers, it seems that financial institutions cannot ignore the possibilities that the technology could offer, especially as AI is rapidly increasing in usage and adoption compared to other emerging technologies.

“It’s a boom versus a gradual ramp,” Gotsch said. “I guess the two technologies, for the 14 years or so that we’ve been in business, I would contrast them with digital currency and cloud, and they’ve both had interesting journeys.”

Digital currency, he said, started with cryptocurrency, which went through phases where financial institutions felt they couldn’t touch it, but then had to learn about it. Then financial institutions wanted to know what would be a compelling use case for them. As for the cloud, Gotsch said financial institutions have also taken a phased approach, first with a few early adopters, followed by a mix of adoption over a decade-long effort.

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“In the early days of the lab,” he said, “the common question for these early-stage companies was … ‘Where are you building your solution?’ And the answer was, ‘On the Amazon cloud, of course.’” That may not work well, however, for institutions that require on-prem solutions. Gotsch said much of the financial industry has been looking at a dual strategy that includes private cloud within a third-party provider while some continue to operate data rooms.

The lightning-fast spread of AI, however, seems to have prompted the financial world to pay attention and become interested in how they could leverage these tools. “It’s generative AI and getting it into the hands of the average person that has accelerated dramatically, which is why I call it kind of a boom factor,” Gotsch said. “It wasn’t a gradual increase in interest. It was, ‘Yeah, we’re doing stuff with AI,’ to, ‘We’re doing stuff with AI! We want to learn about AI.’”

For Accenture’s perspective, Murphy agreed with the AI ​​boom’s description. “We see it as a pervasive technology that will provide value and leverage across the value chain of all of our industries,” he said. “One of the things that we’ve started to see some good examples of in this year’s class and I think, and I hope we’ll see in the next year and beyond is that now, beyond companies that are looking to help financial institutions execute on base camp use cases well… We see there’s a lot of opportunity and a lot of impact and value to be had.” That could include customer service and sales, marketing and content creation, or even roles like co-pilots for regulatory compliance or underwriters, he said.

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