A startup called Cambio, backed by AY Combinator, is bringing AI to the banking world in surprising ways. Connecting AI bots to businesses and consumers on the phone. The startup started by offering an AI-powered service that negotiates debt collections on behalf of consumers, which it says has helped nearly 70% of its customers resolve collection issues and improve their credit scores. Now Cambio is offering its technology to banks and credit unions as an API that can support sales calls.
Cambio comes from Blesson Abraham (CEO), an entrepreneur with banking experience. Previously, Abraham was co-founder and CEO of SavvyIntel, a SaaS analytics solution for credit unions, which was acquired by TruStage in 2017. After his retirement, Abraham came up with the idea to help people struggling to improve their financial situation with a banking app. This was something he understood personally because he was in debt when he first founded his last startup.
“I tried my best, but one in three adults in America struggles with it,” he explains. “So we created Cambio based on that premise.”
When founded in 2021, Cambio was envisioned as a neobank targeting this underserved market. But Abraham found that Cambio’s users were more interested in tools for building better credit habits. After the startup was accepted into the Y Combinator accelerator in 2022, the team decided to rebuild the app and reflect its new focus on helping consumers get out of debt.
Over the past year, Cambio’s service has grown to nearly 90,000 users, and the app’s business model has shifted from freemium to paid.
Image Credits: change
One of the new features was prompted by the popularity of ChatGPT. Customers were asking if Cambio could help them resolve their collection debts.
“With ChatGPT, we really liked being able to coach people in real time while they were talking to their collectors,” Abraham said. “So we came up with a solution within the app where you call a collector and a bot listens to the call and tells you in real time what to respond to.”
The founder said it wasn’t a problem for the AI to ‘listen’ because debt collectors were already recording calls and this was allowed.
That experience led the client to ask whether Cambio could handle calls and negotiate debt on his behalf. The company realized it could do so by first obtaining a signed power of attorney and then using AI to call debt collectors.
“We started very, very safely. People wanted their money paid back in full. [of debt] — who wanted that item excluded from the collection report,” says Abraham.
Cambio has seen early success along this path, with 7 out of 10 customers improving their credit scores within 60 days of calling an AI bot.
Cambio’s AI bot tells the debt collector on whose behalf you are calling and sends power of attorney documents via email when the debt collector requests proof. Because the call focused on the simple use case of paying off the debt in full, it was relatively easy to keep the conversation within the guardrails of that negotiation.
However, this does not mean that there were no difficulties from the beginning. Abraham says that at first Cambio had to deal with AI hallucinations, but things got better over time as more calls were made.
Cambio’s ability to manage debt collection calls soon led the company to its next idea. The AI, called AviaryAI, can be used by banks and credit unions to call customers. The technology uses AI to power sales and promotional calls that banks use to cross-sell products to customers, such as informing them about new checking account products, credit cards, debt protection services, and more.
The FCC recently declared AI-initiated robocalls illegal, but Cambio believes its AI bots will be allowed. The Company also consults with legal counsel regarding the nature of bots and applicable laws.
“Banks, credit unions, and even our first customers are actually insurance companies. I chose three that are highly regulated industries,” Abraham points out. He also said the company is trying to work with regulators by proactively presenting its technology to them and explaining how it’s built, how the bots will approach it, and what the bots can and can’t do.
“When we make a call, we let people know that you’re talking to a virtual assistant,” he says. “It’s not as simple as just putting your voice out there in LLM and having people listen to it.”
The call can start a conversation with the customer, but can also be bounced to a real person if desired. AI-based calls have been as successful as those from sales teams, with Cambio claiming that about 5 to 10 percent of sales calls are received.
“If we compare it to humans, we can actually match it, or if not, in certain use cases we can get much better results,” Abraham said.
Today’s experience includes three different bots: One makes the call, another watches that bot to see if escalation is necessary, and a third bot monitors the entire call, analyzing the tone of voice, what the customer said, etc. on – essentially provides a quality control perspective on currency effects.
The technology is being tested by a small number of early adopters, including Envisant, Encurage Financial Network, Agenium, and Skyla Credit Union.
As it moves into the B2B space, Cambio’s apps for consumers won’t go away, but it will allow the company to focus its monetization efforts on its APIs.
To support growth, Cambio raised $3 million in seed funding from Builders, DVC, EGR Partners, Envisant, Encurage Financial Network, Goodwater Capital, Leonis Investissement, Sandhill Capital, YC, and other angel investors.
“At DVC, Cambio is bringing much-needed technology to consumer financial products with the goal of creating transparency and helping individuals better manage their debt and rebuild their credit scores,” said DVC Managing Partner Marina Davidova. “We are excited to support the team’s mission.” “They demonstrate not only a clear vision, but also the ability to execute it tirelessly and build user-friendly solutions powered by sophisticated AI,” she said.