AI Transforms Klarna Revolutionizing Financial Services

Klarna, the Swedish fintech powerhouse, has embraced generative AI to transform its operations and redefine the "buy now, pay later" landscape. This AI-driven revolution touches every aspect of Klarna's massive ecosystem, which serves over 150 million active users and processes an astounding two million daily transactions. The company's bold commitment to AI is evident in its workforce, with 90% of its 5,000+ employees harnessing generative AI daily. This widespread AI adoption has catapulted Klarna to new heights of efficiency and customer service excellence, setting a new standard in the fintech industry for AI integration and innovation.

Executive Summary

• Klarna has achieved remarkable AI adoption, with 90% of its workforce actively utilizing generative AI in their daily operations.
• The company's AI Assistant has revolutionized customer service, managing two-thirds of customer chats and effectively performing the work of 700 human agents.
• Klarna's custom-built internal AI assistant, Kiki, handles over 2,000 employee inquiries daily, significantly boosting productivity and streamlining knowledge management.
• These AI initiatives have resulted in substantial cost savings for Klarna, exceeding $40 million annually through enhanced operational efficiency and improved customer service.

Problem

Klarna embarked on its AI journey in 2022 by licensing OpenAI's models, recognizing the immense potential to boost profits and operational efficiency. The company's vision was clear: to leverage AI to revolutionize customer service and enhance internal operations. This led to the development of two groundbreaking AI solutions: an AI Assistant for customer service automation and Kiki, an internal AI assistant designed to support employees across various departments. Klarna's challenge was to seamlessly integrate these AI tools into its existing infrastructure while ensuring they delivered tangible benefits in terms of efficiency, cost-savings, and improved user experience.

Solution

Klarna's customer service AI Assistant was engineered to handle a diverse range of queries, including refunds, returns, payments, cancellations, disputes, and invoice inaccuracies. This sophisticated AI operates 24/7, offering support in over 35 languages, truly globalizing Klarna's customer service capabilities. Since its deployment, the AI Assistant has managed an impressive 2.3 million conversations annually, effectively handling two-thirds of all customer service interactions. This comprehensive integration has dramatically streamlined Klarna's customer service operations, providing real-time updates on balances, payment schedules, and spending limits, thus significantly enhancing the overall customer experience.

Kiki, Klarna's bespoke internal AI assistant, has been transformative in managing and distributing internal knowledge. Launched in June 2023, Kiki handles over 2,000 employee inquiries daily, covering a wide spectrum of topics from project statuses to procedural guidelines. The AI assistant has fostered a self-service culture, empowering employees to swiftly find answers and resolve issues independently. The high adoption rate, particularly in non-technical teams like Communications (93%), Marketing (88%), and Legal (86%), has substantially boosted productivity and reduced time spent on administrative tasks, allowing employees to focus on strategic and creative work.

Impact

The impact of Klarna's AI initiatives has been profound, yielding significant improvements in both customer service and internal operations. The AI Assistant has dramatically reduced the average ticket resolution time from 11 minutes to under 2 minutes, leading to a 25% decrease in repeat inquiries and effectively handling the workload equivalent of 700 full-time agents. Internally, Kiki has become an indispensable tool, rapidly answering over 250,000 employee inquiries and fostering a culture of autonomy and self-service. This widespread adoption has substantially enhanced employee productivity, particularly in non-technical departments, contributing to annual savings exceeding $40 million by streamlining operations and reducing labor costs.

Change Management

Implementing AI at Klarna required a substantial initial investment, running into tens of millions of dollars, to develop and integrate sophisticated AI solutions. The company faced the challenge of ensuring that employees adapted to and effectively utilized the new AI tools, necessitating extensive training and a cultural shift towards embracing AI technology. Overcoming resistance to change and fostering an environment where AI is seen as a beneficial tool rather than a threat were critical hurdles that Klarna successfully navigated to achieve its impressive implementation results.

Roadmap

Klarna's success with AI paints a promising picture for broader AI adoption in the fintech sector. The company is poised to further enhance its AI capabilities, aiming to improve both employee performance and customer experiences. As AI technology becomes more accessible and affordable, Klarna's model suggests that even small and mid-sized businesses will likely adopt similar solutions, democratizing the benefits of AI across the financial industry. Klarna's journey serves as a blueprint for the future of AI integration in fintech, showcasing the transformative power of well-implemented AI solutions.

Publications:

Fintech firm Klarna says 90% of its employees are using generative AI daily

Klarna’s New AI Tool Does The Work Of 700 Customer Service Reps

90% of Klarna staff are using AI daily – game changer for productivity