Fintech's Future: Beyond the Hype and into Practical AI and Blockchain Applications

Sheel Mohnot, co-founder and general partner of Better Tomorrow Ventures (BTV), recently shared his insights on the fintech landscape, the role of social media in venture capital, and the realities of AI in startups. This provides a valuable opportunity to examine the intersection of fintech, AI, and blockchain, areas where Encorp.io specializes. Mohnot's interview highlights both the opportunities and the pitfalls in these rapidly evolving sectors, offering relevant lessons and perspectives for Encorp.io's audience.

The Broadening Definition of Fintech

Mohnot's perspective on fintech is expansive. He includes vertical SaaS and B2B marketplaces, arguing that companies like Toast and Shopify, where over 80% of revenue comes from financial services, are fundamentally fintech entities. (Source: TechCrunch Article). This broadened definition has significant implications.

• Implication for Encorp.io: This suggests that Encorp.io's potential client base is larger than traditionally defined fintech companies. Businesses in various sectors are increasingly integrating financial services, creating opportunities for Encorp.io's fintech innovation and custom software development services.

The Power (and Limits) of Social Media in Venture Capital

Mohnot's significant social media presence (150,000+ followers on X) demonstrates the potential for building brand awareness and attracting opportunities. He emphasizes, however, that his primary motivation is genuine engagement and learning, not lead generation. (Source: TechCrunch Article).

• Actionable Insight: A strong, authentic social media presence can enhance credibility and visibility, but should be driven by genuine interaction rather than solely promotional goals. This resonates with Encorp.io's potential to leverage platforms like X and LinkedIn to connect with potential clients and talent.

AI in Fintech: Separating Reality from Hype

Mohnot's comments on AI are particularly relevant. He points out that many companies claim to be "AI companies" with little substance behind the claim. He distinguishes between genuine AI companies and those leveraging AI for operational efficiency. (Source: TechCrunch Article). He also notes the price war among foundational model providers (like DeepSeek), which benefits companies building on AI. (Source: TechCrunch Article).

• Implication for Encorp.io: This underscores the importance of Encorp.io's focus on custom AI development. The market needs solutions tailored to specific business needs, not just generic AI branding. The decreasing cost of AI inference, as highlighted by DeepSeek, makes sophisticated AI solutions more accessible, expanding Encorp.io's market opportunity.

Deep Dive: Specific Opportunities for Encorp.io

Based on Mohnot's interview and current industry trends, several areas present significant opportunities for Encorp.io:

1. AI-Driven Accounting Solutions

Mohnot highlights the "big shortage of accountants" and BTV's investment in companies addressing this challenge. (Source: TechCrunch Article). This is a prime area for Encorp.io's AI expertise.

• Actionable Insight: Develop AI-powered solutions that automate accounting tasks, improve accuracy, and reduce reliance on scarce human resources. This could include:
  • Automated invoice processing and reconciliation.
  • AI-powered fraud detection.
  • Predictive analytics for financial forecasting.
  • Smart contract-based auditing (leveraging blockchain expertise).

2. Enabling Vertical SaaS and B2B Marketplaces

Given BTV's view of vertical SaaS and B2B marketplaces as fintech, Encorp.io can provide solutions that integrate financial services into these platforms.

• Actionable Insight: Offer custom software development services to help these businesses:
  • Embed payment processing.
  • Develop lending and financing options for their users.
  • Create loyalty and rewards programs.
  • Offer data-driven financial insights to their customers.
  • Build secure and scalable infrastructure using blockchain technology.

3. Blockchain for Enhanced Security and Transparency

While not explicitly mentioned in the interview, blockchain's role in fintech is undeniable. Encorp.io's blockchain development expertise can address critical needs in the industry.

• Actionable Insight: Position blockchain solutions for:
  • Secure and transparent payment systems.
  • Supply chain finance optimization.
  • Digital identity verification (KYC/AML compliance).
  • Tokenization of assets.
  • Decentralized finance (DeFi) applications (with careful consideration of regulatory landscape). According to Grand View Research, the global blockchain technology market size was valued at USD 36.98 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 87.8% from 2024 to 2030. (Source: Grand View Research)

4. Build-Operate-Transfer (BOT) for Fintech Startups

Encorp.io's BOT model is particularly relevant in the dynamic fintech landscape. Startups often need to scale quickly and efficiently.

• Actionable Insight: Market BOT services to fintech companies, highlighting the benefits of:
  • Rapid team scaling.
  • Access to specialized expertise (AI, blockchain, fintech).
  • Reduced operational overhead.
  • Ownership transfer at a defined milestone.

5. AI-Driven Hiring in Fintech

The competition for talent in fintech, especially with AI and blockchain skills, is fierce. Encorp.io's AI-driven hiring tools can provide a competitive advantage.

• Actionable insight: The shortage of skilled workers impacts many businesses. Encorp.io could provide AI-driven hiring tools for:
• Fintech Companies
• Vertical SaaS
• B2B Marketplaces

6. Cautionary Note: Bench Accounting's Case

Mohnot's discussion of Bench Accounting, which struggled despite significant funding, serves as a reminder. (Source: TechCrunch Article). He attributes Bench's difficulties to its reliance on a human-heavy, non-scalable model.

• Lesson Learned: Scalability and automation are crucial for success in the fintech space. Encorp.io's focus on AI and software solutions aligns with this need, differentiating it from traditional service-based models.

Conclusion: Embracing the Future of Fintech

Sheel Mohnot's insights provide a valuable lens through which to view the evolving fintech landscape. The key takeaways for Encorp.io are:

1. Embrace a Broad Definition of Fintech: Recognize the expanding opportunities beyond traditional financial institutions.
2. Prioritize Authentic Engagement: Build relationships through genuine interaction, both online and offline.
3. Focus on Practical AI Applications: Develop custom AI solutions that address specific business needs, rather than relying on hype.
4. Leverage Blockchain for Security and Efficiency: Position blockchain as a core technology for enhancing fintech solutions.
5. Offer Scalable Solutions: Provide BOT and custom software development services that enable rapid growth and automation.
6. Use AI to streamline the hiring process.

By focusing on these areas, Encorp.io can solidify its position as a leader in the next generation of fintech innovation, capitalizing on the opportunities presented by the convergence of AI, blockchain, and the ever-expanding definition of financial technology.

The global fintech market is expected to reach $698.48 billion by 2030, growing at a CAGR of 19.8% from 2024 to 2030. ( Source: Statista). Encorp.io, it's important to be prepared.

Another external source confirms AI is the future of Fintech: Artificial intelligence (AI) is expected to have a transformative impact on the financial services industry, with the potential to generate $1 trillion in additional value for the banking sector annually.(Source: McKinsey).

Finally, another report shows how AI will affect the accounting industry: The introduction of artificial intelligence (AI) in accounting is expected to automate up to 94% of traditional accounting tasks, including data entry, reconciliation, and reporting. (Source: ACCA Global).