Swedish fintech giant Klarna, famous for its Buy Now, Pay Later (BNPL) service, is turning back the clock. Having gone all out to use AI to handle customer support, the company is now hiring human agents again. This strategic change comes in the wake of increasing frustration among users, especially those who required subtle assistance or emotional comfort that a machine couldn’t deliver.
The AI Overdrive
In 2023, Klarna collaborated with OpenAI to revamp customer service. A ChatGPT-powered assistant assumed millions of customer interactions. It peaked at more than 2.3 million chats per month, which it was responsible for decreasing repetitive inquiries by 25%. It was perceived internally as a jump in operational productivity.
The company asserted that the move eradicated the requirement for around 700 positions and made news throughout the fintech sector.
Frustration Starts to Mount
But the statistics didn’t reveal the complete picture. Clients started complaining, particularly where they had to handle delicate or tricky situations. The AI helper was speedy, but not always useful.
CEO Sebastian Siemiatkowski subsequently conceded that the business might have overestimated the abilities of the technology. “AI still can’t get human emotions,” he explained. “There was a gap in experience, especially with VIP customers who need empathy, not merely efficiency.”
Why the U-Turn Now?
Klarna’s move isn’t simply a matter of customer opinion. The firm is gearing up for a highly awaited U.S. IPO, with its valuation put at between $15 and $20 billion. In such a high-risk game, trusty and sympathetic customer service has come to the fore.
The firm is now adopting a hybrid support model. Routine questions will remain the domain of AI, but human agents will intervene in complex or emotional scenarios. In-house, this change is being characterized as a shift toward “tech-enabled empathy.”
Industry Takeaways
Petra Lindström, a fintech analyst at Nordic Financial Insights, views Klarna’s change of course as a warning sign. “AI cannot be used as a one-size-fits-all solution,” she stated. “There’s only so much that machines can comprehend, particularly when it comes to something as sensitive as trust.”
This growth also brings back lively discussions regarding automation of work. Klarna was severely criticized in 2022 when it laid off several hundred workers in the interest of technological advancement. And now, with the firm actively recruiting staff once again, the conversation changes.
Growing Beyond BNPL
Klarna’s balancing act is not only at the customer service level. The company is also changing its bread-and-butter offerings. Beyond BNPL, it now offers such features as in-app budgeting applications and shop-able content to compete in a saturated U.S. marketplace. Its competitors are Affirm, Apple Pay Later, and PayPal.
Still, the company insists that innovation remains a core priority. “We’re not stepping away from innovation,” said Siemiatkowski. “We’re just learning to use it more responsibly. Customers want speed, yes, but they also want connection.”
Final Thoughts
As Klarna inches closer to its IPO and global expansion, its new approach sends a clear message: even in the age of AI, there’s no substitute for human connection.
At times, the best move is simply to bring people back into the conversation.