How AI is reshaping financial services
By Ritchie Cotton, Co-Founder and CEO, Valiant Finance
Artificial intelligence (AI) is fundamentally transforming the financial services industry, but not in the ways most people expect. While much of the focus has been on flashy consumer applications, the real revolution is happening behind the scenes in three critical areas that are reshaping how lenders operate and serve customers.
From administrative burden to strategic asset
The first area where AI is making significant inroads is documentation and compliance. Financial services is notoriously “paper-heavy”, requiring extensive record-keeping for regulatory reviews, audits, and compliance obligations. This administrative burden traditionally pulls valuable resources away from customer-facing activities.
AI is changing this dynamic by automating the synthesis and preparation of documentation, allowing finance professionals to focus on what they do best, advising customers and building relationships. At Valiant, our team wants to be talking to customers all day, not filling in forms or copying and pasting data between systems.
By removing process friction, AI enables faster response times and more personalised service delivery, but it’s not perfect. AI makes mistakes. Therefore, it’s essential to have the appropriate guardrails in place for quality assurance. Practically this means all AI-generated loan documents, customer communications, or risk assessments for example must be reviewed by qualified staff.
Turning data into decisions
The second transformative area is analytics. Financial institutions are sitting on vast datasets that can reveal important insights about portfolio performance, industry trends, and customer behaviour patterns. AI’s ability to process and interpret this information at scale is unlocking new levels of understanding.
For a platform like Valiant, which connects small businesses with capital across 90+ lenders, AI analytics help us better understand how to serve our customers and identify emerging trends in loan product types and industry sectors. This portfolio view enables more targeted solutions and proactive support for businesses before they encounter difficulties.
The analytics revolution isn’t just about historical insights, it’s about predictive capabilities that allow lenders to anticipate customer needs and market movements, positioning them to offer more relevant products at precisely the right moment.
Accelerating innovation
Perhaps the most subtle but significant impact is how AI is transforming the development of financial technology itself. The ability of AI to assist in coding and application development is shifting the velocity at which new solutions can be created.
This acceleration means we’re likely to see more sophisticated, tailored financial products emerge more rapidly than ever before. It also democratises innovation, allowing smaller fintech companies to compete with established institutions by building powerful applications without massive development resources.
Interestingly, while many assume AI will revolutionise credit models and risk assessment, these traditional methodologies have evolved over hundreds of years and aren’t necessarily broken. AI’s strength lies in its probabilistic nature and dynamic capabilities, but something requiring a strict yes or no decision, like credit approval, isn’t where AI excels just yet.
The future – embedded finance everywhere
Looking ahead, AI will enable financial solutions to be embedded everywhere customers make purchasing decisions. Agentic AI – systems that can operate autonomously in the background – will allow financial processes to run 24/7, removing the constraints of business hours and specific contexts.
This means a customer worrying about financing won’t have to wait until morning. AI agents can begin processing their needs immediately, providing peace of mind and maintaining momentum in business decisions. For business owners who shouldn’t be lying awake at 2am worrying about funding, this round-the-clock capability represents a fundamental shift in service delivery.
The implications for embedded finance are profound. There’s no reason why purchasing any business asset shouldn’t include immediate financing options, creating seamless experiences that remove traditional friction points.
Navigating the regulatory landscape
Of course, this transformation comes with challenges. Regulation typically lags behind technology by several generations, and AI’s rapid evolution presents unique compliance considerations. Questions around AI-generated documentation, disclosure requirements for AI-driven communications, and new governance frameworks will need addressing.
The probabilistic nature of AI models creates particular compliance challenges for financial services. Large language models can occasionally generate plausible but incorrect information, what the industry calls “hallucinations”, which poses risks in regulated environments where accuracy is paramount.
This necessitates robust guardrails such as human oversight for all AI-generated content, structured outputs using templates and constraints, source verification requirements, and comprehensive audit trails. For compliance-critical applications, organisations should consider domain-specific training with verified regulatory content and retrieval-augmented generation using authorised policy documents.
The key is maintaining the right balance between innovation and responsibility. At Valiant, we’re taking an experimental approach, testing hypotheses rapidly, iterating quickly, and making swift decisions about what works.
The open-source opportunity
Looking forward, I believe the real opportunity lies in open-source AI movements. As foundation models become commoditised, organisations will be able to deploy sophisticated AI solutions in-house without massive capital investments. This democratisation of AI technology will level the playing field and accelerate innovation across the entire financial services sector.
The rising tide will lift all boats, and those who contribute to making the technology better for everyone will benefit most. AI is here to stay, and its integration into financial services is just beginning to reveal its potential.
