QED’s Nigel Morris says AI will reshape fintech faster than past waves

Nigel Morris, co-founder and managing partner of QED Investors, says artificial intelligence is set to reshape financial services more deeply than branchless banking, the internet, mobile apps or cloud computing. For retail investors watching fintech and bank stocks, his argument is about cost structure: AI could make expensive work in lending, compliance and customer service far cheaper, forcing companies to rethink how they make money.

Morris has spent more than four decades in financial services and co-founded Capital One Financial Services in 1994. He says Capital One’s information-based strategy showed how consumer banking could be rebuilt around data, rather than a single standard product for every customer.

In Morris’s view, AI takes that idea across the full financial stack. He argues that wealth management, investment banking, tax filing, consumer banking, call centers, risk controls and back-office finance are already being changed by AI tools.

Where Morris sees AI entering finance

Morris pointed to Zocks in wealth management, saying tools like it can turn client conversations into organized information that advisers can use. He cited Rogo and Model ML in investment banking, where he says AI can reduce analytical work historically handled by junior bankers.

He also named April in tax filing, Chime and Albert in AI-driven consumer banking, and Decagon and Lorikeet in customer service. Morris said newer systems are aimed at regulated and complex customer questions that earlier chatbots struggled to resolve.

Beyond customer-facing products, Morris said financial “plumbing” is also changing. He cited Augustus as a company building clearing-bank infrastructure for an AI era, and Ramp and Payhawk as companies combining cards, expenses, procurement and accounting into more automated business systems.

He also highlighted Footprint and Sardine in risk and compliance. Those areas include identity checks, anti-money-laundering controls and know-your-customer processes, which banks use to confirm who they are dealing with and to monitor financial crime risks.

Several of the companies Morris named have ties to QED. According to the disclosure attached to his commentary, Zocks, Model JL, April, Albert, Lorikeet, PayHawk and Footprint are QED portfolio companies. Nubank was previously a QED portfolio company, is now public, and QED has exited its position.

Lower costs, new products

Morris’s central claim is that AI pushes the marginal cost of many finance tasks toward zero. Marginal cost means the extra cost of doing one more unit of work, such as reviewing one more loan application, answering one more customer question or clearing one more compliance check.

If that cost falls, Morris argues, financial companies can serve customers in more tailored ways. He said products could be matched more closely to a customer’s needs, credit could adjust with daily cash flow and insurance could be priced more individually rather than around broad actuarial averages.

He also described a future “agentic commerce” layer, meaning software that can transact on a person’s behalf. In his view, that could include tools that move idle deposits away from institutions offering weaker terms, though he framed that as a future development rather than a current market standard.

Banks have data, fintechs may move faster

Morris said fintech startups often benefit from new technology because they can make decisions quickly and change products faster. He also said large banks and insurers should not be written off because they hold proprietary data from decades of transactions, balances, defaults and recoveries.

That data advantage, he argued, only matters if institutions are willing and able to use it. Morris said some incumbents have missed earlier categories including earned-wage access, buy now, pay later, consumer-to-consumer remittances and digital brokerage.

He pointed to Robinhood, Revolut, Stripe and Nubank as examples of fintech companies that became centicorns, a term for private companies valued at $100 billion or more. Morris’s broader warning is that AI may reward the firms willing to rebuild around the technology, rather than those that merely own large customer bases or legacy systems.

This story draws on original reporting from Crunchbase News.