(MT Newswires) --
Fintech startups have built a reputation for shaking up the industry, but their latest moves aren't about eye-catching apps or flashy features. Instead, as CB Insights' "Fintech 100: The most promising fintech startups of 2025" report highlights, today's top private fintechs are driving change behind the scenes. They're using AI to power the back-end operations that keep financial systems running.
Instead of focusing on what end-users see on their screens, these companies are automating processes such as fraud detection, payroll, compliance checks, reconciliation and payments. Why? Because finance needs to run smoother and smarter behind the scenes, especially now that mistakes, slowdowns and manual routines aren't just hassles, they're also liabilities.
"In fintech, AI isn't a cosmetic upgrade: it's restructuring the operating system of the business," David Yin, partner at Informed Ventures, told MT Newswires in written comments. "AI is now absorbing the repetitive, high-touch tasks like reconciliation, underwriting prep, tax and reporting workflows, fraud review and customer onboarding."
Some of the startups included in the October CB Insights report are using AI to help with finance and operations. Their tools accelerate anti-money laundering reviews, automate global employment and payroll, detect fraud and prevent overpayments, according to the report.
"AI is eliminating some of the mundane, time-consuming tasks from each day," Joe Braier, president and CEO of Lake Country Advisors, told MT Newswires in emailed comments. "For example, reconciliation takes less time and filings are automatically updated as the data changes," he said. "Teams no longer waste time searching for small mistakes which can halt a team's daily workflow."
Transforming Teams and Roles
This kind of automation is changing the day-to-day work of some fintech employees, moving them away from routine data entry tasks and toward more strategic thinking and problem-solving.
Braier described the impact of AI automation on personnel structures as akin to a shift from repetition-based roles to judgment-based roles. "Companies now hire analysts that can understand how models behave and confidently adjust rule sets for better performance," he said.
Attracting Investor Interest
With AI playing a role in back-end automation, are fintech firms that use the technology attracting investors? The commentators that MT Newswires asked all had strong views.
"Investors today favor fintech companies that demonstrate shorter reporting cycles and consistent margins," Braier said. "Most importantly, it is the ability of AI-driven workflow processes to generate predictable results that becomes the signal investors are looking for, all while keeping payroll costs down," he added.
Michael Benoit, founder of California Contractor Bond & Insurance Services, indicated that a fintech firm that could automate its compliance and reconciliation work would be able to cut expenses and lower error rates.
"I have witnessed similar companies crawl up to 20-to-30% reduced operations expense as a function of using these tools," he wrote to MT Newswires in emailed comments. "That degree of efficiency and scalability is what makes a private company very appealing to investors right now."
Navigating Real Risks
But with so much change comes some real challenges. As AI handles more of the repetitive tasks, there's new pressure to ensure these automated systems are fair, don't introduce bias and comply with increasingly tough regulations.
Chad Silver, managing partner at Silver Tax Group, emphasized that relying on AI models alone can introduce new vulnerabilities. "No matter how good the features of AI can be, relying on AI models alone can result in the concentration of risk, error and bad models being used over an extended period," he told MT Newswires in written comments.
Yin was direct about the risks involved. "In fintech, the risks are higher because the consequences are higher," he said. "A hallucination in a chatbot is inconvenient; a hallucination in a lending or compliance workflow is a regulatory violation."
Jimmy Estrada, owner and co-founder at JELA Payments, offered a balanced perspective: "There's a big difference between relying on AI and using it as a tool," he told MT Newswires in emailed comments. "The safest approach is always a partnership between human oversight and intelligent automation."
Copyright © 2025 MT Newswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.