In the dynamic world of fintech, generative AI (Gen AI) is quietly revolutionizing the industry. Unlike dramatic overhauls, Gen AI is subtly integrating into existing systems, addressing systemic inefficiencies in financial services across emerging markets. Monica Brand Engel of Quona Capital emphasizes that the focus isn’t on creating Gen AI-centric startups, but on enhancing current models with AI to outperform traditional finance.
Quona Capital, managing $800 million and supporting 70 companies in regions like Latin America and Southeast Asia, uses Gen AI for practical applications, not hype. The technology enhances workflow automation, as seen with Sunday, an insurtech firm in Southeast Asia that automates claims processing. It also enables hyper-personalized customer engagement, demonstrated by Clark, a Mexican bank that uses AI to guide customers toward better financial choices. Additionally, Gen AI aids in risk management, with companies like Vertel using it for anti-money laundering monitoring.
Adoption of Gen AI in historically paper-based markets requires overcoming skepticism. Engel notes that once users experience the personalized benefits of AI, they quickly embrace it. Trust is built by integrating AI into trusted products, enhancing services for underserved populations.
Internally, companies are reallocating employees from mundane tasks to more impactful roles. This transition is managed through targeted pilots and education, ensuring successful integration and employee buy-in. The benefits include increased efficiency, more engaging work, and improved financial outcomes, with employees often having a stake in the company’s success.
Challenges remain, such as data integrity and bias. However, human oversight complements AI, and robust privacy and governance measures are in place. Quona fosters innovation by sharing insights across its portfolio, accelerating advancements.
Looking ahead, Engel envisions deeper use of Gen AI for product innovation and operational efficiency. The future may see startups with Gen AI as their core infrastructure, leading to transformative business models. As fintechs harness Gen AI, they are not merely catching up to traditional finance but surpassing it, paving the way for inclusive, intelligent financial services.
