Klarna’s AI Assistant Increases Annual Profit By $40 Million

What Is The Future Of AI Strategies?

Klarna has announced the release of its internal AI Assistant which has reportedly been able to replace 700 of its customer service employees. After spending the last two years and millions of dollars invested into training, this new internal automation tool, designed as an AI business assistant, is expected to drive over $40 million in additional profit for Klarna in 2024.

AI is poised to drive efficiency across different business functionalities and provide serious cost savings capabilities. While few companies are going to be able to match the scale of Klarna’s AI investments, which is reported to be in the tens of millions, their approach offers valuable lessons for businesses looking to harness AI strategically.

However, building automations is not the only AI strategy to consider. Instead, thinking about how to augment your current employees with AI tools for customer service can be another way to increase productivity and lower costs.

Klarna’s Approach

Handling over 2.3 million customer interactions in its first month alone, Klarna’s AI Assistant is already capable of supporting two-thirds of Klarna’s customer service chats. Additionally, it has reduced repeat inquiries by 25% and slashed the average query resolution time from 11 minutes to just 2. These numbers are impressive on their own and show us that Klarna’s approach to creating the best AI chatbot can be successful.

Through a licensing agreement, Klarna was able to customize the fine-tuning of OpenAI’s GPT models to build their AI Assistant. Given the advantages that early adopters of AI are expected to experience, it will be no surprise if we see this partnership continue to grow in the future.

2023 was the year that showed us the capabilities of AI, but 2024 will show us the true value it can create. While they are one of the first companies to announce the deployment of internal automation through AI, they are not going to be the last.

Using A Workforce Augmentation Strategy

Anyone who can fully automate tasks using AI is going to see large productivity gains that lead to increased profits. However, given the extremely high costs of developing proprietary AI tools, not everyone is going to be able to benefit from AI the way Klarna has, often with the help of specialized AI agencies.

By focusing on the most important questions and building tools that address specific pain points, companies can augment their current workforce with AI capabilities. On top of this, the percentage of tasks that AI can augment is five to six times larger than those that can be automated. With a bigger audience, tools that augment labor are going to be able to have a much wider influence.

When developing new tools that augment labor, AI should be leveraged to handle routine, repetitive tasks and queries. Instead of replacing all of your customer service representatives, let AI handle routine customer interactions that are easy to resolve. This in turn will free up your customer service representatives to focus on high-value customers with more complex issues.

The benefits of humans working alongside AI are plentiful. Employees are likely to experience upskilling and current talent will be able to move upward within companies. This is essential because having and keeping the right talent to work alongside these technologies will determine their impact.

Source: Accenture Insurance

What Can We Build Using This Strategy?

Focusing on building augmentations instead of full automations, companies can leverage AI to enhance productivity and efficiency. This is especially true in areas that have already benefited from other forms of technological change.

• Customer Service: Chatbots and voice assistants can handle routine questions, freeing up human agents to tackle more complex issues.
• Sales: AI enhanced sales efforts allow for scoring leads and prioritized communications, ensuring sales teams focus on the most promising prospects.
• Marketing: From ideation to drafting outlines, AI tools allow marketers to focus on content creation that drives increased engagement and conversion rates.
• PR/Investor Relations: By analyzing market trends and public sentiment, AI enables tailored communications and more engaging investor updates.
• Product Development: AI helps in identifying emerging trends, optimizing product features, and reducing time-to-market for new innovations.

As increased competition within the AI industry drives costs down, more stories about AI’s positive influence will begin to appear. The only question is what will you build and what will its impact be?

Source: LinkedIn

Roadmap For Adoption

Whether you are already planning on investing in AI or are on the fence, it is important to understand how to build these tools for your business. There are many approaches to overcoming the challenges your business faces and AI is going to be a powerful new addition to your arsenal.

Begin by identifying the types of challenges your businesses face and your current strategy for addressing these obstacles. Using this, your marketers can build custom CATs for target audiences that maximize conversions and sales teams can focus on acquiring new high yield clients.

Before beginning development, it is important to recognize that not every problem is suited for AI. The ability to generate value from AI heavily relies on the quality of the data that you have available and your employees’ readiness to use AI. Without the right data and a lack of trained employees, you risk building AI solutions that don’t reach their full potential.

The Goal

To unlock the most value from AI, it is important to acknowledge the advantages that different development strategies present. On one hand, automation can create big savings but requires large investments. On the other, augmentation presents a way to build AI solutions quickly that have a wide impact for a lower price.

History has already shown us the power that technologies that augment labor have had to drive new profits. Given its proven track record of success, increased productivity, and cost-saving abilities in the long run, there has never been a better time to start planning your AI strategy for the future.