Building a Legitimate, Profitable FinTech Unicorn Using AI: Cynthia Chen, Founder of Kikoff (Part 6)

Sramana Mitra: Okay. Now, on this timeline, we are in 2022. This is also when AI is starting to hit the popular consciousness and the venture capital industry in a big way. What impact did that have on your product strategy, go-to-market strategy, et cetera? So, tell me more about what’s your AI strategy and how are you playing this game?

Cynthia Chen: A lot. So, AI is fundamentally changing the way we are approaching some very complex, difficult problems in consumer finance. For example, we offer something called the AI debt negotiator. Americans are facing a debt crisis. The average household has a debt of $100K. It is a very stressful experience to have a debt that you are struggling with and have debt collectors call you. Your debt collectors or lenders’ attorneys harass you and threaten to sue or force you to think about bankruptcy filings.

So, we created this debt negotiator so that we can help you get relief from your debt collectors or lenders by accounting them and directly negotiating the debt amount on your behalf. For example, if you owe Capital One $5000, and you’re struggling to pay because the debt amount is increasing with a very high revolving APR on the outstanding balance, we can call Capital One on behalf of you and say, “Hey, I really want to make this work, but I do not have the financial resources to keep paying you on the current schedule. But if you can reduce the amount I owe you by half, then I will be able to pay back over a longer period of time, let’s say three to five years with a smaller monthly payment that is a fixed amount.”

So that’s how it works. Then if Capital One has an offer, we will take the offer back to our customer, and the customer can decide whether they want to take this offer or not. So, they do not have to get harassed by debt collectors anymore if they settle. They can also avoid other heat on their credit report and credit score if they can avoid further delinquencies or even charge offs on that account.

Sramana Mitra: All this negotiation is being done by AI?

Cynthia Chen: Yes, by an AI agent. We trained our AI agent for a long time by collecting data from human agents. We have a sizeable team of human agents that we trained to do debt negotiations with various lenders and debt collectors. They did a good job. Then we used the data to train an AI model so that an AI voice agent can do exactly the same job that the human debt negotiation experts can do. Our AI agent success rate in getting a debt settlement offer from the debt collectors and lenders in our network is on par with the human expert and sometimes even slightly higher.

So, that way we can bring down the cost of debt negotiation significantly. Traditionally, that negotiation and settlement companies would charge consumers thousands of dollars to help them settle that. But with AI, this is going to cause a tiny fraction of that. And that’s why we can afford to offer this to our members as a complimentary feature and help everyone get relief.

Sramana Mitra: When did you start the human version of this agent to do debt negotiation? What year did you start that?

Cynthia Chen: We started the debt negotiation product at least two years ago, and we had human debt negotiation experts working on this last year or 2024.

Sramana Mitra: Then the AI agent is new?

Cynthia Chen: AI agent is new. Yes.

Sramana Mitra: Is it being adopted?

Cynthia Chen: Yes, it’s already been adopted. It’s already assisting customers, so we’ve got real results already. It’s very nice because some of our customers are disabled. They cannot hear or they cannot speak.

The testimonial we got from our customers is that this is life changing because otherwise they would never be able to interact with a call center and get a debt relief offer.

Sramana Mitra: What is the business model? Did you say you were offering this as a complimentary service?

Cynthia Chen: Yes. We’re offering this as a complimentary service to our credit building members.

Sramana Mitra: So, they are on the subscription credit building program.

Cynthia Chen: They don’t necessarily have to be. Say if you’re on a subscription, then you’re eligible. But even if you’re not on a subscription or if your subscription has already ended, but if we still have your credit report, we can do that for you.

If we have access to credit report information, we can do this for them without any additional charge, because we do need the credit report information to identify and analyze your debt and see how we can negotiate for you.

Sramana Mitra: But isn’t that unprofitable because there’s a cost to AI?

Cynthia Chen: Yes, there is. Yes, there is definitely a cost, but we are a very mission-driven company. We do not necessarily have to make a profit from every single feature we offer. We have some other products where we are not really making money, but we are offering it to help consumers.

Sramana Mitra: Talk about your technical team. Some of the stuff that you’re doing is starting to be highly technical. So, talk about your technical team.

Cynthia Chen: Yes, I would love to because I’m very proud of our technical team, of very talented engineers, product managers, designers, and data scientists.

AI is a pretty new technology and training the AI model takes a lot of work and a lot of intelligence. We have a high caliber team. We have tons of engineers who all graduated from top schools with degrees in computer science, and many of them worked at places such as Google and Amazon previously.

Sramana Mitra: How did you find them?

Cynthia Chen: In the beginning, we sourced from our own network. My co-founder and CTO sourced a lot of his prior colleagues from his prior companies. But of course, as the company scaled, we had to rely on real recruiting. So, we have a team of recruiters.

Sramana Mitra: How do you know your co-founder CTO? How did you two come together?

Cynthia Chen: We got introduced by a mutual connection.

Sramana Mitra: I see. So not somebody you worked together with before.

Cynthia Chen: He worked with that friend previously on his acquired companies.

Sramana Mitra: You did not.

Cynthia Chen: Yes, I did not. I got introduced to this friend via another mutual connection. So, my co-founder was my third-degree connection before we had met. I got very, very lucky, because I found him very, very quickly.

This segment is part 6 in the series : Building a Legitimate, Profitable FinTech Unicorn Using AI: Cynthia Chen, Founder of Kikoff
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