Klarna Takes full Advantage of the Power of AI

According to Fintech, Klarna, the Swedish e-commerce giant known for its "Buy Now, Pay Later" payment solutions, is leveraging AI to transform multiple aspects of its operations.

On one front, Klarna’s use of AI in advertising is revolutionizing the traditional process of creating prototypes, storyboards, and test campaigns.

On another, the company introduced an AI-powered chatbot, launched last January, which handled two-thirds of customer service inquiries - including returns, refunds, cancellations, and payments - in its first month. This chatbot facilitated 2.3 million conversations, reducing the average resolution time from seven minutes to just two, while cutting repeat inquiries by 25%.

The AI agent, which operates in 35 languages, is said to perform the equivalent work of 700 full-time employees. As a result, Klarna has reduced its workforce from 5,000 to 3,800 and aims to further rationalise to 2,000 employees, with AI playing a central role in its operational efficiency.

These changes have reportedly increased annual revenue per employee from $400,000 to $700,000.

In the third quarter of 2024, Klarna posted a net profit of 216 million Swedish kronor (around $20 million), showcasing a remarkable turnaround from prior losses. This highlights the transformative power of current AI tools in driving both cost savings and profitability.

Klarna may be big, but the benefits of AI suit the smaller guy as well !