AI-driven Solutions for the Leading Global Payments and Shopping Service

Summary:

AI is reducing operational expenses, which has led to the company planning to cut its workforce by 50%.

Client: 

Klarna is a top global payments and shopping platform, delivering smarter and more flexible shopping experiences to over 150 million active users worldwide. Partnering with more than 575,000 merchants across 45 countries, Klarna provides various payment options, including direct payments, pay-after-delivery, and installment plans, all within a seamless one-click purchase system that allows consumers to choose when and how to pay. Founded in 2005 in Stockholm, Sweden, Klarna has become a leader in the industry.

Problem Statement: 

Online shopping can often feel overwhelming, as it requires sifting through countless products to find the right one and comparing prices across multiple stores. Klarna aimed to improve this experience by leveraging AI technology to tackle these challenges, making the shopping process smoother and more efficient for consumers.

Results: 

• The AI assistant has engaged in 2.3 million conversations, handling two-thirds of the company’s customer service chats.
• The AI assistant is performing the equivalent work of 700 full-time customer service agents.
• The AI assistant matches human agents in terms of customer satisfaction scores.
• The AI assistant is more accurate in resolving issues, resulting in a 25% decrease in repeat inquiries.
• Customers now resolve their issues in under 2 minutes, a significant improvement from the previous average of 11 minutes.
• The AI assistant is available 24/7 across 23 markets and supports communication in over 35 languages.
• The AI assistant will contribute $40 million USD to Klarna’s profit improvement in 2024.
• 90% of Klarna’s employees use generative AI tools powered by OpenAI on a daily basis.
• The company has already reduced its workforce from 5,000 to 3,800 over the past year and aims to further cut it to 2,000 employees by leveraging AI in marketing and customer service.
• AI integration encompasses all teams, with non-technical departments such as Communications, Marketing, and Legal experiencing adoption rates of 93%, 88%, and 86%, respectively.
• A 27% increase in revenue during the first half of 2024.
• The average revenue per employee increased by 73% year-over-year.

AI Solution Overview:

Klarna has introduced an AI assistant powered by OpenAI, becoming the first European company and the first fintech firm globally to launch a ChatGPT plugin. This AI assistant is designed to improve the shopping and payment experiences for Klarna’s 150 million global users, handling tasks from multilingual customer service to managing refunds, returns, and promoting sound financial habits.

Beyond enhancing its products, Klarna’s AI integration extends throughout the company. All employees worldwide now have access to ChatGPT Enterprise, which utilizes OpenAI’s technology within a secure and user-friendly interface, while safeguarding company data.

A major element of Klarna’s internal AI strategy is Kiki, a custom-built AI assistant using OpenAI’s Large Language Models (LLMs). Handling 2,000 questions daily, Kiki supports internal knowledge management and fosters transparency. It delivers answers on various topics in 1 to 5 seconds, with responses tailored to the context of each query.

References: 

1. Klarna AI assistant handles two-thirds of customer service chats in its first month. https://www.klarna.com/international/press/klarna-ai-assistant-handles-two-thirds-of-customer-service-chats-in-its-first-month/
2. Klarna is using AI to revolutionize personal shopping, customer service, and employee productivity. https://openai.com/index/klarna/
3. Klarna: AI lets us cut thousands of jobs – but pay more. https://www.bbc.com/news/articles/c80e1gp9m9zo
4. 90% of Klarna staff are using AI daily – game changer for productivity. https://www.klarna.com/international/press/90-of-klarna-staff-are-using-ai-daily-game-changer-for-productivity/
5. Klarna Cuts 50% of Workforce, Ends Partnerships with Salesforce and Workday Amid Generative AI Overhaul. https://analyticsindiamag.com/ai-news-updates/klarna-cuts-50-of-workforce-ends-partnerships-with-salesforce-and-workday-amid-generative-ai-overhaul/
6. Klarna is All in on AI, Plans to Slash Workforce in Half. https://www.cxtoday.com/speech-analytics/klarna-is-all-in-on-ai-plans-to-slash-workforce-in-half/

Industry: Shopping Service

Vendor: OpenAI

Client: Klarna

Publication Date: 2024