The ‘Letter from the Editor’ series features exclusive insight and opinion-driven analysis from Tearsheet editor Sara Khairi.The focus is on linking ideas, questioning assumptions, and tracking shifts across both mature and emerging trends in financial services.
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Issue # 11
Financial services is an industry built around knowledge, language, and decision-making. If any industry was ready for AI and generative AI, surely it was banking. So, companies moved quickly. They announced partnerships with OpenAI. They rolled out ChatGPT Enterprise. They built ChatGPT-like AI assistants. And gave employees access to large language models.
But two years into this experiment, the industry is now asking: What needs to be in place around AI before we can actually trust it?
The beginning of it all: The ChatGPT timeline
2023: “We have ChatGPT”
In 2023, the focus was access. Financial institutions rushed to experiment with the tech after ChatGPT demonstrated something that felt almost impossible at the time: a machine capable of understanding and generating human-like language.
The first wave was about discovery. The excitement was understandable, but it also created unrealistic expectations. Because the assumption was that if AI could understand language, it could eventually understand finance, which isn’t exactly true.
2024: “We have AI copilots”
In 2024, the industry’s language started changing. The idea of AI replacing workers became less prominent. The idea of AI assisting workers became more realistic.
Morgan Stanley’s OpenAI partnership became one of the most visible examples. The firm integrated GPT-4 into tools designed to help financial advisors search through its research and access information more efficiently.
The interesting part was what the model was not asked to do. It was not managing client relationships. It was not making investment decisions. It was not replacing financial judgment. It was just helping advisors spend less time searching and more time advising. The technology became valuable when it supported expertise, not when it attempted to replace it.
Around the same time, banks and fintechs across the industry began launching their own ChatGPT-like assistants, copilots, and enterprise LLM deployments, first for employees, then for customers, to search information, draft content, answer questions, and streamline everyday work.
Again, the biggest opportunity was removing friction from everyday work. Finding information, drafting documents, helping employees move faster. In general, the most successful AI implementations were asking LLMs to make the bank work better.
2025/2026: “We need governance, data and ROI”
By late 2025 and into 2026, the conversation had shifted again. Institutions began building AI agents designed to execute specific financial tasks like underwriting, compliance, servicing, and other financial workflows on top of proprietary data.
As the AI novelty disappeared, the industry then moved from experimentation to accountability. Investors became less interested in hearing that companies had AI initiatives; they wanted evidence around productivity gains and revenue opportunities.
Those points exposed a reality that was easy to overlook during the excitement. The model was never the hardest part.
AI is moving from a promising capability to a core layer of financial services infrastructure, with banks, fintechs, and technology providers racing to turn experimentation into meaningful applications.
The Tearsheet AI Innovation Awards recognize the organizations using AI to rethink products, processes, customer interactions, and the broader future of finance.
This year’s winners represent the companies moving beyond the hype — applying AI in ways that create tangible value and shape where financial services go next.
2026 Winners of the AI Innovation Awards
Best Chatbot: Fifth Third Bank
Fifth Third Bank earns the Best Chatbot Award for transforming its AI assistant from a traditional support bot into a conversational entry point for digital banking. Jeanie, embedded within the bank’s mobile app used by more than 2.4 million monthly customers, helps users complete more than 150 banking tasks through natural-language interactions, from replacing a debit card and disputing transactions to sending money and finding a banker. The results have been measurable: intent recognition has improved from roughly 20% to 90%, while self-service resolution has climbed from 3% to 42%, enabling more customers to resolve issues without changing channels. Fifth Third has also expanded Jeanie’s Spanish-language self-service capabilities, making the experience more accessible to a broader customer base. Rather than treating AI as a standalone feature, the bank has woven it into the core customer journey, creating a simpler, more intuitive digital banking experience while laying the groundwork for more agentic interactions in the future.
Data Innovation Award: Plaid
Plaid wins the Data Innovation Award for redefining how financial data is transformed into actionable intelligence across lending, fraud prevention, and financial decision-making. The company has built AI foundation models and network intelligence that interpret real-time financial behaviour across its ecosystem of more than 12,000 financial institutions and 9,000 apps, enabling more accurate credit, fraud, and payment risk decisions. Its transaction foundation model improved income classification accuracy by 48%, its sequential model reduced credit default risk by 13.6% at the same approval rate, while LendScore, Plaid’s real-time cash flow-based credit risk score, reduced lending risk by 41% without sacrificing approvals. By building an intelligence layer on top of financial data, Plaid is enabling institutions to make faster, fairer, and more accurate decisions.
AI Startup of the Year: Titan
Titan wins the AI Startup of the Year Award for building AI specifically for the realities of regulated banking. The company has developed a banking-native AI platform that combines domain-specific models, a proprietary banking context layer, and governed AI agents to automate workflows across risk, compliance, underwriting, and operations while maintaining auditability and regulatory oversight. Since emerging from stealth in late 2025, Titan has tripled its annual recurring revenue as financial institutions increasingly replace ungoverned AI tools with a platform designed to be explainable, traceable, and examiner-ready, demonstrating that AI adoption in banking requires not just intelligence, but governance.
AI Company of the Year: Casap
Casap takes home the AI Company of the YearAward for applying agentic AI to one of the most operationally complex challenges in financial services: payment disputes and first-party fraud. Rather than simply routing cases, the platform automates the entire dispute lifecycle – from claim intake and evidence gathering to fraud detection, chargeback filing, and customer communications – while maintaining regulatory compliance and a fully auditable record of every decision. At Chartway Federal Credit Union, average dispute resolution times dropped from up to 90 days to 12 days, per-claim costs fell nearly 90%, write-offs declined 72%, and chargeback win rates improved 95%. Founded in 2023 by former Robinhood and Chime product leaders, Casap has brought advanced, enterprise-grade AI capabilities to credit unions, regional banks, and fintechs, showing how agentic AI can fundamentally modernize complex banking operations.
Best Alternative Data Provider: Carpe
Carpe wins the Best Alternative Data ProviderAward for helping insurers make faster, more informed underwriting decisions with AI-driven intelligence built specifically for small commercial insurance. The platform continuously analyzes signals from company websites, review platforms, social media, and commercial sources to build a real-time view of more than 50 million businesses, covering roughly 90% of insurable U.S. small businesses. Insurers have reduced underwriting touches by 20%, cut review times by 15-30 minutes per application, lowered adverse selection by 40%, and improved loss ratios by 1.5 points. By embedding real-time alternative data directly into underwriting workflows, Carpe gives carriers a more accurate picture of business risk, helping them quote faster, segment more precisely, and improve underwriting performance without compromising risk discipline.
Best Use of Agentic AI: Intuit
Intuit wins the Best Use of Agentic AI Award for turning QuickBooks into a connected intelligence layer that functions as an autonomous financial operating system for small businesses. Powered by Intuit Intelligence, embedded AI agents work across accounting, payroll, payments, invoicing, cash flow, and tax to proactively execute end-to-end workflows, helping businesses get paid faster, simplify compliance, and reduce manual work, all while human experts ensure quality. Users save an average of 13 hours per month; AI-powered invoicing helps businesses get paid four days faster, and the Accounting Agent cuts reconciliation time by 66% while improving accuracy. By embedding autonomous AI across core financial workflows, Intuit has shown that agentic AI is evolving from a productivity tool into an operating layer that gives businesses the clarity, control, and confidence to run and grow, with the ability to run parts of a business actively.
AI Product of the Year: Cascading AI
Cascading AI (Casca) wins the AI Product of the YearAward for reimagining small business lending with an AI-native loan origination platform. The platform embeds AI agents across the lending process, automating more than 100 manual steps, analyzing thousands of pages of financial documents in minutes, and performing over 40 credit and KYB checks while keeping humans in the loop. As a result, banks have automated up to 90% of lending workflows, reduced loan processing times from months to as little as one to four days, and increased lead conversions. By transforming one of banking’s most manual and time-intensive processes, Casca is making small business lending faster, more scalable, and more accessible.
Best AI Fraud & Risk Management Solution: SEON
SEON wins the Best AI Fraud & Risk Management Solution Award for rethinking fraud prevention around unified intelligence. Instead of layering AI onto fragmented systems, SEON brings together more than 900 real-time risk signals, explainable AI, fraud and AML workflows, and an open MCP architecture into a single platform, giving risk teams the context to catch AI-generated fraud and support both human and agentic risk decisions without adding friction to the customer experience. Its explainable AI cuts fraud investigations by more than 50%, while customers like TurboTenant have reduced payment fraud alerts requiring manual review by 80% while uncovering account takeover patterns their previous systems missed. By creating a shared intelligence layer for fraud and compliance, SEON is helping fintechs, eCommerce, and betting and gaming organizations make faster, more informed risk decisions in an increasingly AI-driven landscape.
Congratulations to this year’s finalists across the AI Innovation Awards categories:
Best Alternative Data Provider: Plaid
AI Startup of the Year: F2
Best Use of Agentic AI: nCino and Lili
AI Product of the Year: Intuit and Lili
Best AI Fraud & Risk Management Solution: Plaid and Carpe
Data Innovation Award: Teachers Federal Credit Union and Shield Financial Compliance
As the financial world evolves, open banking and digital transformation are opening up new opportunities. This comes with several challenges for banks and fintechs. In today’s episode, I sit down with Alessandro Hatami. He is a managing partner of Pacemakers, a consulting firm that offers a systematic approach that allows its clients to find the partner that is right for them.
Today we discuss some of these seismic shifts in the fintech industry.
Hatami has a unique background in financial services, spanning both upstart tech companies like PayPal and traditional institutions like Lloyds Bank. His background offers a compelling perspective on the future of financial services. “Financial services is the ideal digital product,” Hatami asserts. “because there isn’t a real tangible exchange,” he says. Yet, despite this potential, many institutions are struggling to embrace digital transformation.
I’ve been saying for years on this podcast that the ability for both larger and smaller institutions to partner – to partner well, at scale, quickly, and deeply – can be a differentiated, defensible model moving forward.
Hatami explains, “They have gone through an evolution. But they haven’t gone through a transformation.” The challenge facing the industry today lies in balancing adaptation with true transformation. from legacy systems to cultural barriers.
Through Pacemakers, Hatami aims to bridge this gap. He wants to improve partnerships between established financial institutions and agile fintech innovators.
Here’s my conversation with Pacemakers’ Alessandro Hatami.
Three stages of financial services innovation
Hatami outlines a three-stage model of innovation in financial services:
Adapting – Banks begin by adapting existing capabilities to digital platforms.
Evolving – Institutions develop new digital-only services not possible in traditional branch settings.
Transforming – The toughest stage is rethinking financial services with a customer-centric perspective.
“What’s on the other side is a financial services proposition. It is not designed to sell a product to an individual. But it’s designed at understanding what the individual needs,” Hatami explains.
Overcoming challenges in fintech partnerships
Successful collaborations between incumbents and fintech face several hurdles:
Timing mismatches between fast-moving startups and slower corporate processes
Difficulty in translating innovative propositions into terms that resonate with traditional banks
Identifying the right internal champion with P&L responsibility
Hatami advises, “You have to explain to the big company what you could do for them. But you have to explain to them in their terms.”
Rise of open banking and banking as a platform
The concept of open banking is transforming the consumption and delivery of financial services. Hatami predicts, “The future in banking will be. The banks will become the gatekeeper of my financial relationship. The bank may or may not deliver the services and products I receive.
“Banking as a platform” is a major shift from the old model where banks made all their products themselves. Now, banks collaborate with others to offer a wider range of services.
Role of AI in reshaping financial services
Artificial Intelligence presents enormous opportunities for the financial sector. Particularly in data processing and pattern recognition. AI will likely support, not replace, human interaction in customer service roles.
“The way I think about AI is about it as an efficient, effective, interesting way of capturing data. Through the new visualization techniques. And also processing gigantic amounts of data,” Hatami explains.
Cultural Transformation: From product-centric to customer-centric
The biggest challenge is shifting from a product-centric to a customer-centric approach. This requires a cultural change. It needs banks to completely reorganize their operations. And change how they measure success.
Hatami notes, “In a customer-centric world, banks must use customer segmentation for their profits and losses. Not just product-based metrics. This requires a complete transformation of how banks operate.”
The Big Ideas
Digital transformation in financial services is vital.“They have gone through an evolution. But they haven’t gone through a transformation,” Hatami observes. Banks must move beyond adapting existing services. They must reimagine their role in customers’ financial lives.
Hatami highlights the importance of cultural alignment in partnerships.“You have to explain to the big company what you could do for them, but you have to explain to them in their terms,” he advises. Successful collaborations need mutual understanding and clear communication.
Open Banking is the future of fintech. “The future in banking will be. The banks will become the gatekeeper of my financial relationship,” Hatami predicts. This shift will change the delivery of financial services.
Hatami focuses on the role of AI in financial services. “The way I think about AI is as an efficient, effective, interesting way of capturing data,” Hatami explains. While AI offers significant opportunities, human interaction remains crucial in financial services.
Hatami highlights the shift to customer-centric banking.“In a world where the customer is centric, they go through the segmentation P&L, not the product P&L,” he notes. This fundamental shift requires completely transforming how banks operate and measure success.
