As WRAL TechWire reports elsewhere today, IBM Watson is demonstrating the growing power of artificial intelligence by helping save a life in Japan. AI is also emerging as a force for startups and emerging companies, too, as several entrepreneurial ventures in North Carolina are demonstrating in “fintech.”

Financial technology, better known as fintech, startups account for 10 percent of the some 90 companies chosen to present at the upcoming Council for Entrepreneurial Development’s annual venture conference.

Why so many?

A new report cites the plunging costs and advances of artificial intelligence as key drivers.

AI’s impact alone in one sector of fintech shows its potential.

According to Juniper Research, fintech platforms are being used for review and approval/disapproval of unsecured consumer loans at a remarkable rate. By 2021, Juniper forecasts that some $17 billion a year in loans will be approved by AI in the year 2021, an incredible growth rate of 960 percent from 2016.

By the way, The Wall Street Journal offers an interesting report today about the spread of “robo advisors” at financial services firms.

“Demitry Estrin, a managing director of research firm MARU/VCR&C in New York, expects customers in the future will want a brokerage firm or adviser that offers any combination of three services levels—self-directed, automated advice and professional input—as well as some amount of financial planning and even insurance offerings,” The Journal reports.

More than FICO scores

Why is AI important in this area?

It’s “particularly useful for risk-assessment purposes, where variables from numerous financial and non-financial datapoints are assessed by algorithms to approve loans,” Juniper explains.

“This widens the addressable market for financial institutions considerably over traditional FICO credit scoring, where lack of credit history may mean loan rejection despite a real low risk for the lender.”

And cloud computing is a major reason for AI’s growth as well as increasing affordability.

“Presently, the ability to use GPU (graphics processing unit) hardware for processing massive and highly available data sets, along with unlimited affordable computing power in the form of distributed architecture has opened the market to a swathe of disruptive new players,” Juniper explains.

North Carolina connections

Two Charlotte fintech firms will be featured presents at the CED event:

  • Payzer
  • Passport

Seven others will participate in “lightning round” presentations or the demo room:

  • Pass The Plate, Winston Salem
  • MoneyComb, Durham
  • Honeyfi, Huntersville
  • Divvy Investments, Cary
  • Spreedly, Durham
  • RewardStock, Raleigh
  • Malartu, Raleigh

Hot investment sector

Venture capitalists and other investors are being drawn to the fintech sector, and entrepreneurs sense an opportunity as the North Carolina list shows. But the state is hardly alone.

“Fintech start-ups, Kabbage and ZestFinance, have collectively raised $500 million in funding alone,” Juniper notes.

Read more about the Juniper findings “AI & Machine Learning: Fintech Dynamics, Disruption & Future Opportunities 2016-2021” at: