The AY Combinator-backed startup Cambio brings AI to the banking world in a surprising way: it puts AI bots on the phone with companies and consumers. The startup began offering an AI-powered service that negotiated collections on behalf of consumers, helping about 70% of customers resolve their collections and boost their credit scores, the company said. Now Cambio is bringing that technology to banks and credit unions as an API that can help them with sales calls.
Cambio comes from Blesson Abraham (CEO), an entrepreneur with a background in banking. Previously, Abraham was co-founder and CEO of SavvyIntel, a SaaS analytics solution for credit unions, which was acquired by TruStage in 2017. After the exit, Abraham came up with the idea of helping people struggling to improve their finances with a banking app – something he personally understood, as he went into debt when he initially launched his last startup.
“I came out on top, but one in three American adults have such problems,” he explains. “So we built Cambio with that premise.”
When it was founded in 2021, Cambio was seen as a neobank targeting this underserved market. However, Abraham found that Cambio users were more interested in the tools to build better credit habits. After the startup was accepted into the Y Combinator accelerator in 2022, the team decided to rebuild and pivot the app to reflect its new focus: helping consumers get out of debt.
Over the past year, Cambio’s service has reached nearly 90,000 users and the app’s business model has shifted from freemium to paid.
One of the newer features was prompted by the popularity of ChatGPT. Customers asked Cambio if it could help them resolve their debt collection.
“One of the cool things about ChatGPT was that we could coach people in real time as they talked to their collectors,” says Abraham. “So we came up with a solution within our app where you would call your collector, our bots would listen in and tell you what to say to them in real time.”
The founder says this was allowed because the calls were already being recorded by the collection agencies, so it wasn’t a problem for an AI to ‘listen in’.
That experience then led customers to ask Cambio if it could handle the calls on their behalf and negotiate the debt for them. The company realized this could be done by first obtaining a signed power of attorney and then calling the collectors using AI.
“We started very, very safely: people wanting to pay off their full amount [of debt] – who wanted the item to come from their collection report,” says Abraham.
Cambio found initial success in this route, as 7 out of 10 customers improved their credit scores within 60 days of calling the AI bots.
Cambio’s AI bots tell the collector who they are calling on behalf of and when the collector asks for proof, they send the power of attorney paper via email. Because the conversations focused on a simple use case – paying off the debt in full – it was relatively easy to keep the conversation within the guardrails of those negotiations.
That is not to say that there was no struggle initially. Abraham says Cambio initially experienced AI hallucinations, but this improved over time as more calls were made.
Cambio’s ability to manage collection calls quickly led the company to its next idea: an AI, called AviaryAI, that can be used by banks and credit unions to call their customers. This technology uses AI to assist with the sales and outreach calls that banks use to sell products to their customers, such as alerting them to a new checking account product, a credit card, a debt protection service and more.
Although the FCC recently declared AI-initiated robocalls illegal, Cambio believes its AI bots will be allowed. The company is also consulting with legal advisors on the nature of its bots and applicable law.
“Banks, credit unions and even our first group of customers are actually insurance companies – I picked the trifecta of highly regulated industries,” Abraham points out. He says the company is also trying to work with regulators by proactively presenting their technology to them and explaining how it is built, how the bots contact them and what the bots can and cannot do.
“When we make these calls, we’re letting people know you’re talking to a virtual assistant,” he says. “It’s not as simple as just… putting a vote on an LLM and people listening to it.”
The calls can initiate the conversation with the customer, but can also flow to a real person if desired. The AI-driven calls are as successful as the sales teams’ calls, with around 5-10% of calls answered, Cambio claims.
“If you were to compare it to a human, we’re actually on par with that, or if not, even better in certain use cases,” Abraham says.
Today’s experience includes three different bots: one that places the call, another that observes the bot to make sure no escalation is needed, and a third bot that monitors the entire conversation to determine things like tonality. analyze, what the customer said, and so on – essentially providing a quality control perspective on the effectiveness of the conversation.
The technology is being tested by a handful of early adopters, including Envisant, Encurage Financial Network, Agenium and Skyla Credit Union.
The move into the B2B space won’t make Cambio’s consumer app disappear, but the company could focus its monetization efforts on the API.
To support its growth, Cambio has also raised a $3 million seed funding round 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 support Cambio’s team in their mission to introduce much-needed technology to consumer financial products, with the aim of creating transparency and empowering individuals to better manage their debt and rebuild their credit scores,” said DVC Managing Partner, Marina Davidova. “They demonstrate not only a clear vision, but also the ability to execute it relentlessly and build easy-to-use solutions powered by cutting-edge AI.”