AI, trade shifts and SME squeeze: How fintechs see the next phase of financial services

Artificial intelligence is rapidly transforming financial services, moving beyond efficiency gains to fundamentally reshape risk management, customer experience and operational discipline, according to fintech leaders from OakNorth Bank and Drip Capital. At the same time, global trade disruptions and higher tariffs are exerting sustained pressure on small and medium enterprises (SMEs), particularly export-oriented businesses.

Speaking to Business Today at Davos 2026, Rishi Khosla, Co-Founder and CEO of UK-based digital bank OakNorth, said AI is increasingly central to how financial institutions think about their businesses. “The impact of AI is not only about driving efficiency within your organisation but also about changing the customer experience and being more rigorous in your processes,” he said. OakNorth Bank has been investing in machine learning and artificial intelligence for several years, with more agentic infrastructure deployed over the past 12 months. According to Khosla, this has transformed how the bank services customers and makes credit decisions, enabling greater consistency and scalability without compromising oversight.

For Drip Capital, AI adoption has been concentrated on risk management and operational efficiency. Pushkar Mukewar, Co-Founder and CEO of Drip Capital, said strengthening fraud detection capabilities has been a priority. “AI is enabling us to significantly enhance our ability to detect fraud and lower loss rates, which allows us to expand our market and price customers better,” he said.

The second major use case has been efficiency across document-heavy trade finance operations. AI-driven digitisation of trade documents and deployment in customer support functions have allowed Drip Capital to scale volumes without increasing headcount. Mukewar noted that despite strong growth over the past two years, the company has been able to maintain its manpower, underscoring the productivity gains from AI-led automation.

Beyond technology, Mukewar highlighted the uneven impact of recent trade disruptions on Indian SMEs. Sectors such as textiles and frozen seafood, which are heavily dependent on US buyers, have been hit hard by higher tariffs introduced last year. While larger companies have been able to shift production or value addition to other geographies, SMEs have absorbed a disproportionate share of the shock. “We saw a volume drop, and that decline now appears largely permanent,” he said, adding that many SMEs are actively diversifying into domestic, European and Asian markets.

Khosla echoed these concerns, noting that trade shocks tend to cascade down supply chains. “The smallest entities within the supply chain are the weakest parties, and they end up absorbing more than others,” he said, warning of potential structural damage if disruptions persist.

Together, the executives said AI can help financial institutions respond more rigorously and efficiently to such challenges, but technology alone cannot offset the broader economic and policy-driven pressures facing SMEs.