3 things Klarna: AI strategy reversal, credit losses, and banking move

Klarna is a bit of a rebel in the financial services space. Its branding, tone, and products often place it opposite the serious and overly-formal traditional financial institutions.

But Klarna’s subversive and non-conformist attitude goes deeper than branding.

In the past, the firm has moved aggressively on Gen AI, incorporating the tech in its customer-facing touchpoints when the majority of industry players were only workshopping ideas for the back office. And just as the industry was warming up to BNPL, Klarna had already moved past its original value proposition as a BNPL provider towards becoming a shopping platform.

In this article, we explore three mini stories that show how Klarna is finetuning its internal policies, product mix, and partner network to grow beyond its BNPL roots.

The great customer service reversal

In 2022, Klarna laid off 700 customer service employees on the heels of launching a digital assistant through its partnership with OpenAI. The headcount reduction continued with the firm reducing its headcount by 2105 employees in 2022 and 2024, driven in large part by CEO Sebastian Siemiatkowski’s aim to integrate Gen AI for productivity gains across the company.

The move was near-radical, positioning Klarna at the helm of Gen AI adoption in an industry that is known for moving slowly on new tech.

But it wasn’t enduring. The Gen AI-fueled customer service overhaul negatively impacted customer experience, triggering a reversal in policy this year.

Recently, the firm announced that it is now looking for human customer service agents to rejoin the company in “an Uber type of setup” according to Siemiatkowski. The new team would be composed primarily of remote workers like students and power Klarna users.

Siemiatkowski insists that this doesn’t mean that the firm is pulling back from its AI push in general, but rather it’s a realignment based on the learning that humans will ultimately prioritize talking to humans. “From a brand perspective… I just think it’s so critical that you are clear to your customer that there will always be a human if you want,” he said.

Tearsheet Take: Going fast and breaking things generally carries the risk of things… you know.. actually breaking. But Klarna’s pivot is a signal to all Gen AI pundits: In an industry where firms are the custodians of people’s money and in charge of moving it, useful and reliable customer service shouldn’t be the first thing to go in tech-fueled strategies. Infrastructure improvements are game, but what touches the customer should move with the customer.

The growth and the losses