An AI phase shift in 1 month: How AI Transformed Klarna and What It Means for the Future of Business

There are not many phase shifts in technology, and I’ve been lucky enough to see several in my lifetime: First the Internet, then mobile, and now AI.

We’re starting to see some of the early results from AI now, and here’s an interesting example from this past week–a story that involves 2 different companies.

The first company: Klarna

Klarna is best known for offering financing on consumer products across eCommerce sites, you’ve probably seen them on checkout pages by now. This means they interact with a lot of end consumers and their support costs are significant. They just issued an interesting press release this week, after they’ve turned AI loose in this area for ONE MONTH. Here are the highlights:

  • The AI assistant has had 2.3 million conversations, two-thirds of Klarna’s customer service chats
  • It is doing the equivalent work of 700 full-time agents
  • It is on par with human agents in regard to customer satisfaction score
  • It is more accurate in errand resolution, leading to a 25% drop in repeat inquiries
  • Customers now resolve their errands in less than 2 mins compared to 11 mins previously
  • It’s available in 23 markets, 24/7 and communicates in more than 35 languages
  • It’s estimated to drive a $40 million USD in profit improvement to Klarna in 2024

These are some amazing numbers, and this is just the first public release of numbers like this that I’ve seen. And this happened in ONE MONTH. Not years, as I hear some people saying. A single month.

The other company: Teleperformance

Almost immediately there were ripple effects in related markets. Specifically, let’s look at another company Teleperformance, a publicly-traded call center company. They do exactly the type of work that Klarna just AI’d.

Let’s look at Teleperformance’s statement on AI:

"Teleperformance started 2023 with a strong push towards generative AI, announcing that 20% to 30% of its activities would be automated within the next three years, before downplaying expectations due to a limited response to the new technology from clients."

Here’s what happened to Teleperformance’s stock after the Klarna announcement came out:

Teleperformance chose the wrong magnitude of impact and time horizon–by an order of magnitude. 2-3 years is a cop-out by a company that doesn’t want to acknowledge reality because it’s threatening. 20-30% is simply uninformed, as evidenced by the results that Klarna published.

This is a moment that requires strong leadership. Companies with cultures that are not compatible with curiosity, optimism, and a driving desire to get the job done at all costs are going to struggle, at best. Conversely, companies that can pull it off are poised to reap incredible rewards.

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