A Y Combinator-backed startup called Cambio is bringing AI to the banking world in a surprising way: It’s putting AI bots on the phone with corporations and consumers. The startup began by offering an AI-powered service that negotiated debt collections on behalf of consumers, which helped around 70% of shoppers resolve their collections and lift their credit rating, it says. Now, Cambio is taking that technology to banks and credit unions as an API that may assist them with sales calls.

Cambio hails from Blesson Abraham (CEO), an entrepreneur with a background in banking. Previously, Abraham was the co-founder and CEO of SavvyIntel, a SaaS analytics solution for credit unions, which was acquired in 2017 by TruStage. After the exit, Abraham got here up with the concept to assist individuals who were struggling to enhance their funds with a banking app — something he understood personally, as he went into debt when initially founding his last startup.

“I got here out of it on top, but there’s one in three U.S. adults who’ve struggles like that,” he explains. “So we built Cambio with that premise.”

When it was created in 2021, Cambio was envisioned as a neobank aimed toward this underserved market. Nonetheless, Abraham found that Cambio’s users were more considering its tools for constructing higher credit habits. After the startup was accepted into the Y Combinator accelerator in 2022, the team decided to rebuild the app and pivot to reflect its recent focus of helping consumers get out of debt.

Over the past 12 months, Cambio’s service has reached nearly 90,000 users and the app’s business model shifted from freemium to paid.

One among its newer features was prompted by the recognition of ChatGPT. Customers were asking Cambio if it could help them resolve their collections debt.

“With ChatGPT, one among the cool things was we could actually coach people in real-time as they were talking to their collectors,” says Abraham. “So we got here out with an answer inside our app where you’d call your collector, our bots would eavesdrop on the decision, and let you know in real-time what to say back to them.”

The founder says this was permitted since the calls were already being recorded by the debt collectors, so it was not an issue for an AI to “listen in.”

That have then led to customers asking Cambio if it could just handle the calls on their behalf and negotiate the debt down for them. The corporate realized it could achieve this by first getting a signed power of attorney after which calling the collectors using AI.

“We began off very, very secure — individuals who desired to repay their full amount [of debt] — who wanted the item to come back off their collection report,” Abraham says.

Cambio found initial success going this route, as seven out of 10 customers improved their credit scores inside 60 days of placing the decision with the AI bots.

Cambio’s AI bots will tell the collector who they’re calling on behalf of and when the collector asks for proof, they send out the ability of attorney paperwork via email. Since the calls focused on a straightforward use case — paying off the debt in full — it was relatively easy to maintain the conversation inside the guardrails of that negotiation.

That’s to not say there weren’t struggles at first. Abraham says that, initially, Cambio needed to cope with AI hallucinations, but this got higher over time as more calls were made.

Cambio’s ability to administer debt collection calls soon led the corporate to its next idea: an AI, called AviaryAI, that may be utilized by banks and credit unions to call their customers. This technology puts AI to make use of to assist with the sales and outreach calls that banks use to assist cross-sell products to their customers, like alerting them to a recent checking account product, bank card, debt protection service and more.

Although the FCC recently declared AI-initiated robocalls illegal, Cambio believes its AI bots shall be permitted. The corporate also consults with legal counsel on the character of its bots and the applicable laws.

“Banks, credit unions and even our first set of clients are literally insurance firms — I picked the trifecta of highly regulated industries,” Abraham points out. He says the corporate can also be attempting to work with regulators by proactively presenting its technology to them and explaining the way it’s built, how the bots reach out and what the bots can and can’t do.

“Once we make these phone calls, we let people know you’re talking to a virtual assistant,” he says. “It’s not so simple as just…putting a voice over an LLM and individuals are listening to it.”

The calls can start the conversation with the client, but also can bounce out to an actual person, if desired. The AI-driven calls have just as much success as calls placed by the sales teams, where around 5-10% of calls are picked up, Cambio claims.

“If you happen to were to check it to a human being, we’re actually matching that or, if not, in certain use cases, even higher,” Abraham says.

The experience today involves three different bots: one which places the decision, one other observing that bot to be certain there’s no escalation needed and a 3rd bot that monitors everything of the decision, to investigate things just like the tonality, what the client said and so forth — essentially offering a top quality control perspective on the decision’s effectiveness.

The technology is being trialed by a handful of early adopters, including Envisant, Encurage Financial Network, Agenium and Skyla Credit Union.

With the move into the B2B space, the Cambio app for consumers isn’t going away, but the corporate may focus its monetization efforts on the API.

To support its growth, Cambio has also raised a $3 million seed round of funding from Builders, DVC, EGR Partners, Envisant, Encurage Financial Network, Goodwater Capital, Leonis Investissement, Sandhill Capital, YC and other angel investors.

“We at DVC are excited to back Cambio’s team on their mission to introduce much-needed technology into consumer financial products, aiming to create transparency and empower individuals to raised manage debt and rebuild their credit scores,” said DVC Managing Partner Marina Davidova. “They reveal not only a transparent vision but additionally the power to relentlessly execute on it, constructing user-friendly solutions powered by sophisticated AI.”