CALGARY — With high interest rates and rising living costs pushing more consumers into delinquency, Calgary entrepreneur Hanif Joshaghani wants to harness the “analytic horsepower” of AI to ensure businesses are getting paid. 

To get there, the co-founder and CEO of Symend is taking a gentler approach to the historically bellicose world of debt collection. 

The startup, which Joshaghani founded in 2016 alongside Symend’s chief impact officer Tiffany Kaminsky, has developed an AI-driven platform to guide large companies in their interactions with customers that are behind on their payments. The company has become one of Calgary’s most prominent tech startups, raising a total of US$150 million from investors Inovia Capital, Thin Air Labs, BDC Capital and others. It counts major companies like BMO, Verizon and Telus among its clients. 

Its efforts to help big corporations collect overdue payments comes as financially-strained consumers increasingly struggle to make ends meet. Among large corporations like credit card issuers, telcos and power utilities, Joshaghani said, about 10 to 20 per cent of their customers are typically behind on payments at any given time, often translating into sizable chunks of lost revenue. 

While those individuals are feeling the pinch, so, too, are the businesses they owe.

Rising interest rates sent Canada’s consumer debt levels soaring to $2.4 trillion in 2023, rising $80.9 billion on the year. Resulting loan defaults are taking a bite out of company earnings, including from major banks like BMO and Scotiabank. U.S. wireless carrier AT&T is cutting cash flow estimates as more customers fail to pay their bills. 

“Companies are feeling tremendous pressure to tackle this problem,” Joshaghani said. 

Symend aims to minimize businesses’ losses from uncollected payments using data—a process that begins by determining why people fall behind on payments in the first place. 

The company’s software gathers customer information like age, what services they use, or whether they’ve missed payments in the past. It then uses AI to integrate reams of behavioural science research—drawing from existing data, white papers and even insights from Symend’s internal team of PhDs—to generate assumptions about the customer and pinpoint the best way to communicate with them. 

“All of those things factor into the kind of archetype [the customer is] in that particular moment,” he said.

In most cases, delinquent customers have simply forgotten to pay their bills, Joshaghani said. Others might be struggling with deeper financial strains that fundamentally limit their ability to pay. 

Companies use Symend’s technology to communicate with those customers primarily via email or text. By learning customers’ specific circumstances, the software can better generate a “playbook” that determines the tone or contents of a company’s communications with them, he said. The playbook “evolves very, very rapidly” as the AI accepts feedback from its interactions with customers, analyzes them and, if needed, alters its approach. 

Over time, Joshaghani claims, the AI continues to learn and expand its base of knowledge, which in turn “enriches your understanding of the customers.” 

“You build a really acute understanding of what behavioural tactics work, how they work, what kind of response they elicit.” 

While companies often seek payment by sending harsh legal language or repeated warnings about late payments, Joshaghani said a more compassionate response can often get better results. People facing intense financial pressures might get overwhelmed and freeze up, for example. In such cases a softer approach can generate a more positive response. 

“Nudging them to action is really what you’re trying to achieve,” he said.

Rather than a threat, the software might generate a more mild-mannered text message prompting them to update their accounts or make sure they’re caught up on payments. 

“You don’t have to harass them,” Joshaghani said. “You don’t have to have it hit them over the head and spam them. That has a pretty profound impact not only on the customer experience, but the impact from a psychological perspective on a customer at a time where they’re already under pressure and feeling vulnerable.”

In his interview with The Logic, Joshaghani addressed a range of other subjects, including:

Symend’s recent layoffs: The company has halved its workforce since 2022, cutting staff from just under 300 to about 155. The reductions were in large part a natural function of the company needing fewer engineers after it completed its software development, Joshaghani said. “Once we launched the new platform we right-sized the R&D significantly.” 

International expansion plans: Symend is already established in Canada and the U.S., but is seeking new markets as it looks to move beyond the development phase and into full-scale commercialization. “You make the best bets you can and you try to fail fast if it doesn’t work, but we’ve landed a couple of customers in both Latin America and the U.K. So, so far so good, knock on wood.” 

Raising more money: The company last closed a financing round at the end of 2022—a US$40-million Series C deal led by Inovia. It was a fraction of the size of Symend’s previous US$100-million Series B, which Joshaghani says is largely a reflection of a broader market chill. “In a capital constrained world, it usually forces prioritization more so than the last couple years where money was free.” 

Basing Symend’s operations in Calgary: Joshaghani says Calgary possesses a spirit of free enterprise while maintaining a kind of “small town culture” that can encourage tighter business relationships. “If a Wall Street guy had a baby with a redneck, you’d get Calgary.”