Jul 11, 2023
Charlotte's signature industry has dabbled in artificial intelligence — as have the city's new tech startups
Startups and big banks have been investing in AI for years — making Charlotte ripe to emerge as a leader at the intersection of AI and finance
In the beginning, Aru Anavekar wanted bots everywhere.
By 2017, the software developer had spent just over a decade working at some of Charlotte’s largest financial services companies. She’d also had an up-close look at the way that mortgage lenders reached out to prospective borrowers. It was a “chaotic” process, she described, that often relied on spamming potential clients with phone calls.
Anavekar thought she could make that process easier by automating pieces of it with artificial intelligence. She launched her company, Botsplash.
But the market wasn’t quite ready, she said.
“It’s easy to say ‘Hey, in 10 years, the world will look like this.’ But as a startup, it’s very hard to portray that picture and have (people adopt) that idea.”
Human labor was still cheap and plentiful in mortgage and auto loan offices. AI-powered chatbots needed large datasets Anavekar didn’t yet have. And she was funding her new firm with personal savings, not outside investment — meaning she needed to earn a profit, fast. She kept the Botsplash name, built a slightly different kind of software to sell and temporarily shelved her AI aspirations.
Until about three months ago.
It was “perfect timing,” Anavekar said of the recent explosive popularity of generative AI programs like ChatGPT. In the wake of all the hype, her company has launched two new AI-powered products. “We had everything already in place. It took just a quick few weeks.”
For several years, a number of leaders in Charlotte’s banking and fintech sector have been placing early bets on the power of artificial intelligence, sensing that the technology would eventually transform the field of financial services.
Now, the explosive popularity of consumer-facing programs like ChatGPT is catalyzing a new wave of AI inventions that could change the way we open a bank account, apply for a car loan or manage our retirement savings — paving the way for Charlotte to become a leader in the intersection of AI and finance.
“(The technology) has been there for some time. But now we are in a space where anybody can say, ‘OK, I can actually use AI to do this,’” said Pradeep Singh, head of fintech and digital assets at consulting firm Capgemini. “Everything is subject to change. Everything is possible.”
Developing over a decade
In the world of business and finance, AI is nothing new.
In fact, it’s been a buzzword for a little more than a decade, said Dan Roselli, co-founder of local startup incubator RevTech Labs.
He dates it back to the release of IBM Watson. That computer system — most famous for winning a game of “Jeopardy!” against two human all-time champions in 2011 — uses machine learning techniques to analyze language, generate hypotheses and evaluate evidence.
Machine learning — which describes computer systems that can use past data patterns to improve their performance, or “learn” — is now broadly considered a subset of AI technology.
But AI software also encompasses a number of products already prevalent today, Roselli said. That includes everything from the virtual assistant in your iPhone to the Google software that recognizes pictures of your pet.
“It’s not new,” Roselli said. “People in this space have been working on this their whole career.”
AI has also already found its way into the world of banking and finance. Bank of America, Wells Fargo and Truist all offer AI-powered virtual assistants that can answer common questions, check your account balance or search for past transactions. Some insurers use the technology to support underwriting processes.
But awareness of the technology, especially among consumers, has “skyrocketed” over the past couple of years, Roselli said.
Justin Adams, a Charlotte entrepreneur who co-founded the fintech firm Aiwyn, has seen that transformation up close. He co-founded his first company, Digitize.ai, in 2017 — the same year Anavekar launched Botsplash.
At that time, AI “wasn’t really understood” in the corporate world, he said. “There were a lot of companies … using it as a marketing gimmick.”
That changed radically over just the last several years, Adams said. Now, firms without significant investments in artificial intelligence have found themselves behind the curve.
That change reflects years of behind-the-scenes tinkering at startups and big banks alike, Roselli said.
“One of the best things that ChatGPT did is make a whole bunch of non-tech-y folks aware of what’s going on,” Roselli said. “But they all think it started two months ago. That is just not the case.”
‘A broad spectrum’
The exact impact that AI will have on financial services is hard to predict, experts admitted.
Like other industries, some jobs are at risk of being replaced or heavily assisted by AI — such as mortgage officers, customer service agents and tax preparers.
“Everything where there is no human factor required, from clerical operations to something as complicated as legal advice (could be impacted),” Singh said. “It’s a broad spectrum.”
JP Morgan is developing an AI-driven investment advising software called Index GPT that could fill the role of a wealth advisor. Business giant IBM announced in May that it is pausing hiring for roughly 7,800 jobs that could be automated with artificial intelligence in coming years.
“Wherever there is a human being replaced by a piece of code, there is a huge cost saving for everyone,” Singh said.
The finance sector could even be shaped indirectly by other ways that AI impacts consumer behavior, Singh said — he anticipates a world of virtual assistants that could order groceries, schedule a home repair or send a birthday gift without any interference from human users.
The growth of AI will likely have a local impact as well, Roselli said, with the city’s fledgling startup scene leading the way. Recent startup alumni of RevTech Lab’s incubator program have used the technology to analyze a home’s flood risk for insurance pricing and monitor spending behavior for signs of fraud, among other uses.
“What fintechs have been good at for the last 10 to 12 years is innovating where the mainline financial services institutions can’t or won’t,” Roselli said. Experimental uses of AI will likely come from those smaller players first, he said.
And while AI threatens some jobs, he foresees it creating some, too, as new companies form to monitor data privacy and regulatory concerns.
“There’s going to be a whole industry that pops up whose value add in the equation is being the human safeguard between AI and how it impacts our society,” he said.
Turning into a trend
At Botsplash, the new wave of hype has given Anavekar an opportunity she’d been waiting for.
The company has launched two new products in the last couple of months. The first, called Blurb, creates an AI-generated summary for loan agents or other Botsplash users that highlights all previous interactions with a particular customer. The second is a chatbot, powered by ChatGPT-like technology, that can engage directly with customers.
Anavekar doesn’t foresee a world in which her company’s AI features ever fully replace a human employee. Customers are always going to want a level of empathy and trust that a computer just can’t provide, she said.
But the last few months have changed something in her industry.
She compares all the buzz about AI to the health food craze surrounding chia seeds or quinoa: something with well-known benefits that’s already been around for a while, but that a lot of press has turned into a trend.
“It’s like the world understands what we have been pitching for years,” she said. “Let’s make it happen now.”
Hannah Lang is a freelance reporter based in Charlotte. Most recently, she covered banking and economic equity at The Charlotte Observer. Her work has also appeared in The Wall Street Journal, the Triangle Business Journal and the Greensboro News & Record.