Rulebase: AI Co-worker for Fintech - Y Combinator

Rulebase: Automating Financial Services Back-Office Operations

Rulebase, a company emerging from the Y Combinator program, is concentrating its efforts on automating traditionally manual processes within the financial services sector. Rather than focusing on customer-facing AI, they are targeting the often-overlooked area of back-office compliance.

Seed Funding and Founding

The startup, established in 2024 by Gideon Ebose and Chidi Williams – both engineers originally from Nigeria who connected while in London – has secured $2.1 million in a pre-seed funding round. Bowery Capital spearheaded the investment, with additional participation from Y Combinator, Commerce Ventures, Transpose Platform VC, and various angel investors.

Addressing Inefficiencies in Financial Services

Financial institutions dedicate substantial resources to handling support requests, resolving disputes, ensuring quality control, and maintaining regulatory adherence. Rulebase’s agent co-worker software is designed to alleviate much of the manual effort associated with these tasks.

The AI agent is capable of assessing customer communications, identifying potential regulatory concerns, and initiating appropriate actions across platforms such as Zendesk, Jira, and Slack. Crucially, this is achieved while preserving essential human oversight, a requirement for many financial firms.

How the 'Coworker' Tool Functions

“Our ‘Coworker’ tool seamlessly integrates with existing systems and collaborates with both human agents and back-office teams,” explains CTO Williams. “It provides complete management of the dispute lifecycle, resulting in time savings, reduced errors, and consistent compliance.”

Currently, Rulebase is being utilized by clients including U.S. business banking platform Rho and a major, yet unnamed, Fortune 50 financial institution.

From Previous Ventures to Rulebase

Rulebase represents the latest endeavor for Ebose and Williams. Ebose, previously a product lead at Microsoft, and Williams, a former back-end engineer at Goldman Sachs, collaborated on several projects, including an AI-powered customer feedback tool, before focusing on Rulebase.

The concept for Rulebase arose from observing the inefficiencies prevalent in back-office operations within both small and large financial organizations, particularly concerning regulatory processes.

Focus on Quality Assurance and Cost Reduction

The startup’s initial focus is on workflows initiated by customer service interactions, specifically quality assurance. Traditionally, financial institutions manually review between 3% and 5% of support interactions to verify adherence to compliance standards.

Rulebase now evaluates 100% of these interactions, reportedly reducing costs by as much as 70%. For example, the company has assisted Rho in decreasing escalations by up to 30%.

Expanding Capabilities and Long-Term Vision

“We automate workflows that begin with a customer interaction, and we excel at managing these processes from start to finish,” states CEO Ebose. “While our current strengths lie in QA, compliance, and dispute resolution related to customer communications, our ultimate goal is to automate as many manual back-office tasks as possible.”

This will involve consolidating fragmented steps and disparate systems into a single, coordinated workflow.

Future Development and Funding Allocation

The recently acquired funding will be used to bolster the engineering team and introduce new features to the AI Coworker. These additions will include functionalities for fraud investigation, audit preparation, and regulatory reporting.

A Domain-Specific Approach

Rulebase is initially concentrating on the financial services industry due to the critical need for precision in automation. “A thorough understanding of regulations, such as those from Mastercard and the CFPB, is essential. This specialized domain knowledge is a key competitive advantage,” Ebose emphasizes.

Target Markets and Potential Expansion

The company is targeting business banks, neobanks, and card issuers across Africa, Europe, and the United States. However, the roadmap may eventually include expansion into related sectors like insurance, where similar workflow challenges exist.

Growth and Business Model

Rulebase is experiencing rapid revenue growth, with “double-digit” month-over-month increases since participating in Y Combinator’s Fall 2024 program. The company employs a usage-based pricing model, charging clients based on the number of interactions reviewed or workflows automated.

Advice for Founders

As African founders who successfully gained acceptance into Y Combinator while developing AI tools, Ebose and Williams advise aspiring founders to adopt a global mindset from the outset.

“Small teams are now capable of delivering significant value more quickly than ever before,” Williams observes. “Therefore, limiting your focus to ‘X for Y’ or a narrow vertical can be a missed opportunity. With AI, it’s crucial to pursue a large-scale vision. Anything less ambitious may not be sufficient.”

Williams, who previously created Buzz, an open-source speech-to-text tool with over 300,000 downloads and 12,000 GitHub stars, further emphasizes the importance of ambition.