Deep learning models for financial firms that can better predict customer behavior; Generative AI solutions that help ensure the safety and privacy of customer data; and technology that can quickly identify online counterfeits generated by AI and thereby help protect banks and their customers from fraud;
These are among the cutting-edge opportunities offered by fintech firms selected to participate in the 2024 Fintech Innovation Lab program. The 12-week program is based in New York, attracts participants from around the world, and launches this month (April).
The 10 fintech firms selected this year represent the types of fintech services and technologies that major financial, insurance and capital markets firms currently desire, are interested in integrating into their operations and want to see succeed.
“The cohort of selected firms presents a very interesting window into what the priorities are for the financial services industry in 2024,” said Maria Goch, co-founder of the Lab and president and CEO of the Partnership Fund for New York.
She adds that “This year’s participating firms are very strong in AI and how to use AI in different ways, which is indicative of where the financial industry is at right now, whether it’s how to best manage large language models, to reduce claims processing costs in insurance or to develop shields against deep counterfeiting.”
Overseen and funded by Accenture, the global consulting firm, and the New York Partnership Fund, a civic organization founded by private equity pioneer Henry Kravis, the Fintech Innovation Lab is an annual program in its 14th year, which aims to help 10 fintech companies achieve different goals:
- Get thoughtful and targeted feedback about their product
- Gain a better understanding of how best to serve the ongoing needs of large, highly regulated financial firms
- Participate in relevant networks with top level decision makers
- Ultimately, improve their pitch to venture capitalists and potential clients
“The program isn’t about fundraising, it’s an opportunity for founders to come in, listen and refine their pitch and value,” said Steve Murphy, Accenture’s head of financial services industry solutions and executive sponsor of the Fintech Innovation Lab. He adds, “However, (participation in the Lab) often results in a good funding outcome after the program.”
Adds Gotsch: “The goal of the Fintech Lab is to help entrepreneurs with the constant challenge of trying to engage the right people and then sell their services to large, regulated financial institutions.” That includes making sure they meet the right level of executives, but also receive feedback to fine-tune their product so that it solves relevant problems. “The lab addresses these two aspects of the challenge,” Gotch said.
Eligibility criteria are based on current technology needs and industry challenges faced by the more than 40 financial, insurance and capital markets firms whose executives participate in the program. They include representatives from AIG, Bank of America, Citi, Fidelity, JP Morgan and Prudential, as well as representatives from venture capital firms including Bain Capital, Canaan Partners and Oak HC/FT.
The program achieves this by inviting executives from large financial firms to discuss which topics or challenges are of greatest interest several months before the lab launches. Closer to March, the pool of applicants – which this year numbers more than 250 early-stage and growth-stage fintech firms – is then assessed for relevance and whittled down to no more than ten.
This year’s list of participants includes Hyperplane, a company that offers a data intelligence platform that enables financial companies to develop predictive models and personalized experiences through large language models; DynamoFL, a company that enables enterprises to build privacy, security and compliance into generative AI applications; and Reality Defender, a cybersecurity company that can detect fake audio, video and text that can be used by bad actors to defraud banking, insurance and government organizations.
A full list of this year’s Fintech Lab participants can be found here.
The Lab pairs fintech firms with senior-level executives from participating institutions who will help them develop and improve their technology and business strategies through a series of one-on-one meetings, panel discussions, user group sessions and networking opportunities with top executives and technologists in large companies. There are also opportunities to network with fintech founders who have completed the program.
Of course, there are also benefits for the large institutions involved.
According to Murphy, the fact that the lab curates a shortlist of startups that are best suited to the interests of large firms is a big advantage. “Instead of sending one-off calls from a large pool of fintechs, they can focus on a curated list. It’s much more efficient that way,” he said.
They also appreciate that these are fintech firms “on the leading edge” using deep learning and generative AI, allowing large financial firms to continue to build their own knowledge as they seek to compete on the AI front.
Finally, participating in the program offers a civic benefit, Murphy said, as it contributes to New York’s development as a hub for fintech and insurance firms.
After 12 weeks, the program culminates in a Demo Day where participating founders make their pitches to an audience of venture capitalists and corporate executives. At this point, Murphy says, fintech firms “have got their idea, they’re up and running, and they’ve got a tailwind in fundraising.”
He adds that “the magic moment of the lab process is when a connection is made and a click happens between one of the fintech firms and a financial services institution and the FSI guy says, we want to do a proof of concept with you. It’s always a beautiful moment.”
To date, the Fintech Innovation Lab, founded in 2010, has helped entrepreneurs from 270 fintech companies. Graduates of the program have created more than 3,000 jobs and raised more than $2.7 billion in venture funding. Twenty-six of them have been acquired. More information about the program can be found here.
