A former Westpac banker has launched an artificial intelligence-driven startup aimed at transforming the recovery of low-value debts that typically evade traditional collection methods. Norman Yan, who spent 15 years in banking including leading data and AI initiatives at Westpac and Citibank China, founded OpenDebt in August 2025 with the goal of reducing the costs associated with pursuing debts such as buy now, pay later defaults, payday lending, utility bills, and medical expenses.

OpenDebt recently secured $2 million in seed funding from Blackbird, Australia’s largest venture capital firm, and early-stage investor Antler. The startup uses advanced GPT-based models to support debt collection agencies by either coaching human collectors to engage more effectively with debtors or deploying AI-powered bots that simulate human voice and speech patterns, including Australian accents, to make calls autonomously.

Yan explained the approach as focused on finding sustainable repayment solutions rather than simply maximizing debt recovery. He emphasized the importance of understanding a debtor’s income and expenses to tailor manageable payment plans. “People often owe debt because they face financial distress and cannot resolve their situations immediately but might be able to in time,” Yan said.

The AI system discloses its use at the start of calls, allowing debtors to opt for speaking with a human collector. About half of those contacted choose to transition to a human agent, yet Yan noted that even partial automation has significantly reduced recovery costs. The technology also addresses industry-wide labor shortages and high staff turnover caused by the emotional challenges of debt collection, an environment Yan described as difficult to staff.

OpenDebt’s technology stands out for its ability to detect subtle indicators of financial distress that human collectors may miss, which potentially enables more sensitive handling of cases such as domestic violence. Yan suggested the system can pick up on nuanced cues during conversations, aiding in crafting more appropriate and customized recovery plans.

Yan co-founded OpenDebt with Jonas Tischer, who previously developed AI technology for health-tech company Lyrebird Health. Tischer highlighted the importance of integrating compliance and quality controls into the AI framework, ensuring that conversations stay within approved terms, handle disputes correctly, and enable smooth handover to human specialists when necessary.

Blackbird partner Samantha Wong praised the founders’ combination of industry expertise and technical innovation, noting their commitment to building compliance into the product before developing the AI itself. Wong said their solution targets a segment of debt accounts often “quietly written off” because traditional collection costs exceed recoverable amounts, offering a novel AI application in a sector where technological advancement has been challenging.