Greensill was heralded as a star of UK fintech.

The £3.5bn Softbank-backed startup represented a new era for supply chain finance, seemingly driven by technological prowess in AI and machine learning.

But over the last few weeks, the foundations on which Greensill perched have begun to unravel, spurred by an investigation by the FT. With Greensill entering administration, potential buyers are now asking — was Greensill really a ‘fintech’?

When creditors looked under the bonnet, they found no first-class tech platform, the FT reported. Indeed, there was little sign of the “fully integrated technology and funding solutions” that Greensill’s investors had once boasted about.

Far from building a ‘proprietary’ invoicing platform underpinned by AI, Greensill seems to have largely leveraged external software.

This raises a serious question — are other fintechs overstating their ‘tech’ abilities?

According to Dealroom, 811 fintechs in Europe use one or more of the following terms in their descriptions: AI, machine learning, deep learning and computer vision. Between them, they have raised over $4bn, including several heavily-funded unicorns in their ranks.

That’s a lot of fintechs with AI expertise.

That isn’t to say that these fintechs are hiding behind a false veil. Indeed, it’s not unusual to outsource core ‘tech’, with a view to building new capabilities on top.

Yet Greensill’s downfall does raise the issue of whether claims of elite technology have been stretched for the sake of hype and to propel valuations.

Much touted fintech discovered to have not much tech. #Greensillhttps://t.co/bLDeGuvuAd

— Arash Massoudi (@ArashMassoudi) March 10, 2021

Techless fintech?

Terms like AI and machine learning carry a special allure, despite being loosely understood, and have been generously used by startups. A report in 2019 found that 40% of European startups who claim to use AI don’t use it in a “material” way.

This may be particularly extreme in the fintech sector, given its entire premise is pinned on the use of new technology to elevate and modernise financial services.

Disgraced German fintech Wirecard also made broad claims of AI-driven systems before its web of financial fraud was uncovered.

There are now calls for entrepreneurs and businesses to be more specific in what they are doing in this area, moving from just using blanket terms like AI into understanding what specific capabilities they have.

“The fintech title is overplayed, honestly.”

Still, cynics warn that more ‘Greensills’ could be in the wings, triggering a sharp valuation correction.

“How many [fintechs] have genuinely proprietary IP?” a senior fintech consultant, who asked not to be named, told Sifted. “I could name on one hand the number of companies that aren’t building on the usual rails, and are demonstratively different…It’s mostly nonsense.”

He added: “The fintech title is overplayed, honestly.”

‘Greensillgate’ could now prompt investors to push founders further about their tech, who owns it and how sophisticated it really is.

Isabel Woodford is Sifted’s fintech correspondent. She tweets from @i_woodford and coauthors our new fintech-focused newsletter. Sign up here.