Klarna’s AI Assistant: Game-Changer or Risky Bet?

Klarna, the renowned financial service company, has embarked on a groundbreaking journey by teaming up with OpenAI to introduce its first virtual assistant. One month into its launch, the results have exceeded expectations, with the assistant handling two-thirds of customer service chats and performing tasks equivalent to the work of 700 employees. Notably, Klarna reports a significant reduction in query resolution time, from 11 minutes to just two minutes, while maintaining steady customer satisfaction scores. This innovation is projected to drive a remarkable $40 million USD improvement in profits for Klarna in 2024.

Sebastian Siemiatkowski, Co-Founder and CEO of Klarna, hailed this AI breakthrough as a means to deliver superior customer experiences, optimise costs, and enhance returns for investors. The assistant, integrated into Klarna’s app, aims to revolutionise both the shopping and payment experiences of its global consumers. Positioned as the first step towards Klarna’s vision of a fully AI-powered financial assistant, the partnership with OpenAI is expected to streamline processes, saving users time, worry, and money.

The Klarna AI assistant offers three key features: 

1. 24/7 Support: Providing round-the-clock customer service support for a range of issues, including refunds, returns, payments, cancellations, disputes, and invoice discrepancies.

2. Personal Financial Support: Offering real-time updates on payment schedules, spending limits, and purchase power, catering to Klarna’s buy-now-pay-later model.

3. Multilingual Chat Support: With the capacity to handle queries in 35 languages, Klarna’s assistant ensures effective communication with its diverse global customer base across 23 markets.

Despite the success of the virtual assistant, Klarna’s strategic shift towards AI has raised eyebrows. Following Siemiatkowski’s announcement in December 2023 of freezing hiring to pursue AI alternatives, Klarna witnessed a significant reduction in its workforce. The company’s commitment to AI, while promising in the short term, has drawn scrutiny from experts cautioning against the risks of relying solely on digital customer service solutions.

Gartner, in particular, warns against the pitfalls of replacing human agents with generative-AI-powered chatbots, advocating for a hybrid approach that leverages AI in a supportive capacity. This recommendation comes amid predictions that the EU may enact legislation granting consumers the right to interact with human agents, emphasising the enduring importance of human touchpoints in customer service.

As Klarna presses forward with its AI-centric strategy, the reception from customers and the evolving regulatory landscape will determine the wisdom of its decision. While the potential benefits are evident, Klarna must tread cautiously to strike the right balance between technological innovation and human-centric service delivery, ensuring long-term success in an ever-evolving fintech landscape.

Pan Finance is a print journal and news website providing worldwide intelligence on finance, economics and global commerce. Known for our in-depth analysis and opinion pieces from esteemed academics and celebrated professionals; our readership consists of senior decision makers from across the globe.

Contact us