Expert Voices: Investing to preserve Western democracy

Former FDIC innovation chief Sultan Meghji has a dark fear that drives his investing thesis: Western democracy's ability to survive the next century.

Of note: Meghji was the FDIC's first innovation chief. He left just over a year ago, publishing an Op-Ed on his departure that railed against the government's reluctance to embrace needed technological changes.

Details: Meghji now invests his own capital across various sectors (fintech included) and advises venture capital firms like America's Frontier Fund and Reciprocal Ventures.

This conversation has been edited for clarity.

What's your framework for investing?

• I worry about our civilization — Western democracy — surviving in the next century. There's a huge autocratic push around the world, and here in this U.S., we've seen some populism and proto-fascism.
• I'm investing in three different areas all under the umbrella of operationalizing our emerging technology to the betterment of democratic populations around the world: bringing advanced manufacturing (like semiconductors) back to the U.S.; next generation health care (like lengthening lifespans); and the next generation of financial infrastructure.

Tell me more about your fintech thesis.

• So much of America's soft and diplomatic power over the last century has been based on our ability to control markets from the global reserve currency to the energy markets to the actual financial technology people use to run their banks, to run their payment systems.
• But we are in a moment where American tech is not representative of what the world wants.
• So I think about how much of our financial systems run on terrible legacy technology — and using artificial intelligence to remove friction in those environments. I also think about investing to fix the huge discrepancy between different racial and gender categories in the U.S.

What applications do you see for generative A.I. in fintech? Several big banks notably have cracked down on its use.

• Right now, there's a huge amount of energy and paperwork put into solving fraudulent banking transactions. We have A.I. that will identify suspicious activity, but then a bunch of people run around to confirm and have to manually submit a suspicious activity report (SAR) to the government.
• Just imagine if generative A.I. gets to a point where it can see a risk that's happened, and it can reach out to the customer and say, "Hey, did you do this?" Then it creates the SAR and communicates with regulators.
• I'm waiting for somebody to pitch that company. I'd invest in it.

Would you consider re-entering government?

• Absolutely. I currently do advise parts of the federal government.