HSBC Backs AI Start-up Model ML for Financial Services

Financial services continues its headwind toward AI as the investment in Model ML demonstrates.

The funding is aimed at enabling growth of Model ML, supporting its current services which include automation of complex workflows, due diligence, financial analysis and client-ready document creation.

Financial Technology Partners and QED Investors committed capital to the project.

The company is advised by multiple former bank CEOs, including ex-HSBC CEO Sir Noel Quinn, ex-UBS Chairman Axel Weber, ex-Western Union CEO Hikmet Ersek and ex-CEO of Julius Baer Philipp Rickenbacher.

More advisors covering a range of financial expertise include Former Tech Investment Banking Chairman at Barclays Keith Robinson, Former Chairman, Capital Markets at Morgan Stanley Saul Nathan, Former CEO and President of CPP Investments Mark Machin and Former Global Co-Head of Investment Banking at UBS and Nomura Jeff McDermott. 

Speaking to Finance Chief exclusively, Chaz Englander, CEO and Co-Founder of Model ML, says: “Financial services is moving quickly from experimenting with AI to embedding it into the workflows that underpin how institutions actually operate.

"HSBC Asset Management’s investment is another strong signal of that shift and of the scale of the opportunity ahead.

“We've built Model ML specifically for this industry, and our focus now is on reshaping how teams at the world's leading financial institutions work every day.”

The tasks are also done with governance at the forefront, ensuring that accuracy and consistency are maintained throughout. 

Investing in promise

Model ML launched in 2024, and has since raised US$100m.

Chaz continues: “We're delighted to welcome HSBC Asset Management as an investor."

"Their backing reflects growing confidence in vertical AI for financial services. Rather than a single model, the differentiator is increasingly the software that can orchestrate multiple models across complex financial workflows. That's exactly what we're building.”

HSBC’s flagship venture capital strategy invested in the specialist AI company that states it is “built for financial services”. It already works with asset managers and advisory firms as well as leading banks.

HSBC Asset Management’s flagship VC programme contains curated funds and is part of the bank’s US$81bn Alternatives platform. It makes co-investments in select, high-growth venture-backed companies such as Model ML.

Rise of AI in financial services: The new generation 

Financial services are investing heavily into AI as it not only tackles boardrooms and back-end spreadsheets but also the way that banks operate. 

Chris Andersen, CFO of Flexera, exclusively tells Finance Chief: “You can't manage what you can’t see.

"Traditional finance systems were built to track people costs, not technology spend.

"The rapid expansion of SaaS, data cloud and AI investments has created a blind spot for many finance teams, who now need visibility into spend and usage across disconnected systems, making it difficult to act on before costs show up in the P&L.

Leaders in the space include Lloyds Banking Group, which has positioned itself to be a leader in using AI in its new strategy and services to customers, despite being one of the oldest and largest banks in Britain.

AI in financial services is rapidly taking over, as investors display a renewed interest in companies with promise for an inevitable AI-future.

Chris concludes: “People costs run around 70% of the operating expenses in most businesses and are tracked closely.

"Technology spend is becoming the second largest cost, and organisations need a similar level of visibility and control.

“The CFOs seeing the greatest value from technology are the ones who use it to catch spend early enough to act on it. The real advantage is having a clear view of where money is going while it is still being spent and having the opportunity to do something about it before costs escalate.”