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F.Rocio Wu-.vtt

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So I'm Rocio.

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I'm with F-Prime Capital.

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We are early stage global VC firm.

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We actually have an office in London.

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We manage about 11 billion assets

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globally and in primarily investing

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FinTech and enterprise software.

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I think maybe a better question to ask

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is how we can maintain level-headed as we

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continue to explore the potential of ai.

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I think human beings, we are naturally

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stay very alert whenever there is a new

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like, change or transformation, but, I

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think right now there's so much AI hasn't

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been fully explored and I think there is

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a lot way to go for a regulator to step

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up to combat misinformation and also

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to mitigate some of the risks from ai.

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So I think, yeah, we should look

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forward and figure out how we

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can keep our like a levelheaded.

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Yeah.

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Yeah.

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To be honest, ai, this is not the

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first wave that has come into ventures

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and back in the days, you know, in

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20 2014, Jamie Dimon actually wrote

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in the annual shareholder letter

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that, oh, Silicon Valley is coming.

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Because at that time, people are

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leveraging big data to better

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underwrite the models and provide

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proprietary access to some consumers.

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And then back in 2019

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and 18 had applied ai.

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Now it's generative ai.

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So the fintechs and also the banks

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have been using AI for a while.

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It's not new, and they have been using

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it primarily for underwriting, for

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regulation checks, aml, bsa, and ofac.

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And I think what's new about this wave

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of generative AI is I think there are

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three main categories of innovations.

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First of all, I think some traders

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hedge funds, they're starting to

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notice the power of generative ai.

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They start to analyze the new headline,

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trying to figure out the sentiment

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of consumer and try to predict

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the market and make stock trades.

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And the second category

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is customer journey.

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I would say it's beyond customer service.

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So think of like, you know, because

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financial products is so complicated,

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especially in the US, like 401k,

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retirement product and also different

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health insurance have different coverage.

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So I do think there's a lot of things that

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can be done to assist cut consumers to

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select the product that's best for them,

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like the tax implication, and also manage

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a very personalized client relationship.

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So that's the customer front.

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And I think the third category, which I'm

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most excited about, I would say is The

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vertically integrated workflow management.

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So right now a lot of the generative AI

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application I've seen is still kind of

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stay on the customer support layer, but

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I would love to see more companies that

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that does like documents verification

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that does like data processing as well

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as write up like reports and summary,

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like when you file a claim to the

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insurance company, they can tell you, oh,

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whether this is within coverage or not.

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And also they can write up the

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report for you and the process like

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automatically rather than like a human

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comparing the tax code against

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your policy, et cetera?

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That's a good question.

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To be honest, I think both banks and

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also FinTech are  in the early innings

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of AI and even for the enterprise

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world,  employing AI and machine

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learning talent is relatively new.

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So I would say the banks, they have

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to first of all realize, you know,

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they actually have abundant data.

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They have the data supremacy and that

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they can attract a lot of talent to , the

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proprietary and also private data that's

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not captured by the large language

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models that only capture public data.

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And the second I think there has to

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happen this organizational willingness

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because AI alone is not enough.

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You need to have a superior UX, like a

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whole journey, like the product discovery

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to support the whole product experience.

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So how can you encourage a

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cross-functional collaboration within

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the banks, you know, which they are

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not known for collaboration or like

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information sharing, et cetera.

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So how can you instill this

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collaboration and openness culture

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inside the traditional banks?

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I think that would be key to, to observe.

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That's a great question.

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I think back in the days, you know,

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I think a lot of entrepreneurs, when

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they're chasing the AI wave, I feel

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like they are finding problems to suit

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a solution because oftentimes they

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have this amazing algorithm and I think

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they reverse the sequence a little bit.

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They want to find a problem to solve.

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This is the most common

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mistake that we observe among

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founders who want to adopt ai.

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I think you have to really focus

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on what are the business problem

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you are trying to solve, and is

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AI really the right solution?

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To make it 10 x better or it's not really.

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And because, you know, I think the

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cost, the benefit of AI is still way

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to be seen because you require a large

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compute and a large infrastructure cost.

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So what is the kind of like

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economic benefits of ai?

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Interesting.

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I think definitely there are

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more AI is posing more and more

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risks to both regulators and also

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banks and financial institutions.

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I think we already saw some cases

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where in underwriting some maybe

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minority or women actually get  a

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lower credit limit than their male

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counterparts, even with the same amount

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of job history and and income level.

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So I think definitely AI subject,

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the banks and the lenders to

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more scrutiny towards that.

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And I think with generative ai,

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because they're generating new

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content, but not necessarily true.

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So how can you make sure the accuracy and

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also combat the misinformation, how can

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you prevent the bad actors from taking

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advantages of those new technology because

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you know, these days we get so many

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spams phishing emails and with generative

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ai, it's going to be even faster and

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more scalable and more personalized.

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So there's definitely a lot of ethical

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questions and I hope you know, regulators

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and the financial institutions can

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come together and figure out ways that

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we can prevent those from happening.

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In the space in the 12 months, I think

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definitely there's continue going

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to be this a lot of venture funding

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going to ai, but I think what we

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are going to look for is definitely

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applications that provide real utility.

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So that sorts streamline the workflow for

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either insurance company or accounting

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services where there's large data sets

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and also a lot of text information.

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How can you help them automate,

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how can you help them underwrite,

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as well as the pro like claim

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processing that I mentioned earlier,

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as well as like summary reporting,

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writing, investment memo, et cetera.

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So I think that would be really important.

is how we can maintain level-headed as we

think right now there's so much AI hasn't

I would say it's beyond customer service.

health insurance have different coverage.

So I do think there's a lot of things that

like the tax implication, and also manage

And I think the third category, which I'm

vertically integrated workflow management.

insurance company, they can tell you, oh,

they can attract a lot of talent to , the

Rocio Wu, Principal at F-Prime Capital, lists the key areas of innovation she is seeing Generative AI insitigate in financial services, plus predicts how this space will change over the next year. The venture capitalist also tells financial institutions how they can attract AI talent, but says “AI alone is not enough” - watch to find out what else FIs must action to get ahead in this race! 