Connect Spotlight: Ophelos

Founded by Amon Ghaiumy, Paul Chong, and Prof. Qingchen Wang, London-based Ophelos is bringing a new energy into the archaic $24 billion debt collection industry. We love how they’re using AI and behavioural science to boost the financial health of consumers and enterprises, and are proud to have backed them in their $2.3 million pre-seed investment round alongside Fly Ventures.

Rory sat down with Ophelos’ CEO, Amon, to learn more about how the company began, how their intrinsic blend of social impact and product focus sets them apart, and how they plan on eradicating the debt collection process for good. Want to learn more? Read on…

Amon Ghaiumy: My co-founder, Paul, and I used to work for an AI company where we did comprehensive call centre transformation for large financial institutions. During our time in those call centres, we saw firsthand how broken the debt collection process was.

Not only were the processes terrible and the technology stack outdated, but the customer experience was also shocking. Typically, organisations would outsource the process to debt collection agencies which had not invested in tech or their people. Add to that the fact that these customers are often vulnerable, with severe financial difficulties and challenging social situations, and you get poor outcomes all around. We felt there had to be a better way to approach this, both operationally and ethically.

Then the pandemic hit, and the economy almost collapsed. The demand for these types of services skyrocketed, which opportunistically is good, but it’s also unfortunate in that many, many people are experiencing extreme financial problems. With Ophelos, we reimagine the approach to debt collection for the modern world — while always keeping the customer in mind.

AG: In a very simple sentence — we want to bring lasting financial health to both consumers and businesses. We talk a lot about physical health, and more recently mental health, but when it comes to the concept of financial health, there’s so much that has yet to be addressed.

We started with collections because we think it’s severely broken. Short-term, we believe we can have an immediate impact on enterprises and consumers. Long term, we see a huge opportunity to improve overall financial health for consumers in need.

That manifests itself through these questions: What happens after someone has paid off their debts? How can we make sure that person doesn’t fall into debt again? How can we help that person find products that are better suited to them?

Similarly, we encourage enterprises to ask: How can I make sure that a customer who has poor financial health doesn’t fall into the debt collection process again? What can I do as a business to identify vulnerable customers early, so they can avoid falling into the collections process?

AG: It’s a relentless optimisation for the customer, which is unheard of in collections. If you go to any debt collector website in the world, you’ll see that they are optimised for and addressed to the enterprise first, not the customer. On top of that, all they sell is a service — never a product. Their investment goes into their operational model rather than their product and engineering teams, which doesn’t allow for much ROI because margins are too low.

For us, everything revolves around customers with debt and how we can get them help quickly and easily — whether it’s to pay off a debt, set up a repayment plan, or ask for breathing space. The best way to do that is to create a scalable product. We’re constantly thinking about what we can automate and how we can use machine learning and AI to eliminate manual processes and inefficiencies.

In a nutshell: it’s a front-end focus on customers and a back-end focus on automation. That’s what makes us stand out in this space.

AG: The product is everything to us. And while we replace traditional debt collection agencies, if you ask anybody in our team what we are, we would never say ‘a debt collection agency.’ We are a software company that builds products in the debt collection and financial health space.

Furthermore, our product team is laser-focused on building a better customer experience. That might be a payment plan, a pay-in-full option, or the ability to pay later. We advise customers in an automated fashion based on their financial situation, which we can quickly assess thanks to integrated open banking. For us, the product is geared towards giving our customers the most flexibility possible.

AG: It’s super important.

As I mentioned, we don’t see ourselves as a debt collection agency. We see ourselves as a software and AI company.

One of our co-founders, Qingchen, is a professor at the University of Hong Kong, specialising in machine learning. When Paul and I started looking more deeply at the debt collection industry, we did some research within academic literature on how machine learning has been applied in this domain. To our surprise, there have only been two academically reviewed research papers published over the past 20 years on applying machine learning in debt collection — one of which was written by Qingchen.

Machine learning is key for us because a lot of today’s debt collection agencies don’t have the resources to be smart about who to contact, when to contact them, how to contact them, and most importantly, what message to contact them with. They basically take a one-size-fits-all approach: on day one, send the letter; on day three, send an SMS; on day five, make a phone call; on day seven, make another phone call… and so on.

The reality is that every person is different, and every person’s debt situation is different. While one person might simply be forgetful, another might have a dispute. One might be in severe financial difficulty, while another might have a disability. By using machine learning, we can build bespoke strategies for every single customer segment we detect and automatically find a strategy that works for them.

Not only that, we can test and trial. Our machine learning models use reinforcement learning. Over time, as we see more data, we A/B test, we test and trial, and as we notice certain outcomes performing better, we optimise our approach so that over time, our engagement improves as well. That’s something most companies just don’t do in this space.

AG: That was actually one of the first things we discussed, for a number of reasons.

It was partly for our own sanity. We’re hyper cognizant about the space we’re in — it’s not all sunshine and butterflies. We encounter very harsh situations: people have lost their job or experienced a tragic event, they have no savings, they have to pay out-of-pocket, and they are in debt.

By having a social purpose, we can focus on doing the right thing and making the right decisions without having a strictly commercial outcome in mind. It helps us build a better product.

It also allows us to attract the best talent. Having a social impact or purpose is becoming more and more important to the best talent in the world. And we’re confident we’ve hired the best talent for the company that we are. I truly believe one of the reasons debt collection has been so predatory and hostile as an industry is because most debt collection agencies just don’t have the right cultural mindset. It inevitably trickles down into the organisation, where it opens the door for bad behaviour.

Ultimately, our purpose is written in our DNA: “Ophelos” is Greek and it means ‘to help.’

AG: It’s all about financial health. We have this very large vision statement that says, “We believe in a world where everyone is financially educated, empowered, and equal.” For us, debt collection is just a starting point.

The reason it’s such a good starting point is that it allows us to understand why someone is in debt; how they’re in debt; if they’re actually recovering and rehabilitating; if, when and how they’re repaying their debts; and if they fall into the cycle again. By analysing and understanding the data of all these different inflection points, we can build more products and better products around preventing these cycles. How can we rehabilitate someone? How can we build the right financial and educational tools to improve their financial education and wellbeing?

Ultimately, we want to prevent people from falling into debt in the first place. By combining the data with our ideas, we see a future where people don’t fall into the collections cycle at all and debt collection agencies are no longer needed. I believe we can achieve that in the next 10–20 years.

AG: Obviously, getting funding by Connect! 😄

But really, it’s the team we built. It may have taken a bit of time, but our patience paid off because we’ve hired the best people for what we’re trying to do. From engineering to product, operations to content, machine learning to data science, our team is young, hungry, and diverse across the board. And over 40% of our team are women! For a young software company, that’s pretty good.

When I look at my team, I see people who are much smarter than me, and that makes me feel confident in what we’re trying to achieve.

AG: I’m still making mistakes, and still learning a lot, but I’d say the biggest lesson is letting go a little bit. It’s probably a very founder-like, generic answer, but you know, you tend to start micromanaging at times — because you care so much. You want to be involved with as much as possible, but it’s not humanly possible. I’d have to clone myself a hundred times to be everywhere. Saying “You just go, and you do” can be hard, but you have to trust the team. I think that will get easier over time.

AG: I’d say it’s my co-founder, Paul, just because he’s so much more experienced than I am. He has this level of Zen about him that I think you only get once you’ve been around the block for a while. While I have this natural anxiety and desire to constantly move, Paul’s good at keeping me grounded.

RS: Thanks so much for your time and candour, Amon. We’re honoured to be part of this journey with you and can’t wait to see you take on the debt collection world with the innovation and care you so clearly exude.