‘Businesses can no longer overlook advantages of AI’ – GO Ventures Head of Investment Paul Grech

The potential of artificial intelligence (AI) to increase efficiency and improve business activities may finally be living up to the hype, with a major European company declaring a major turnaround powered, in part, by AI.

Swedish Buy Now Pay Later (BNPL) firm Klarna recently released its results for the first half of 2024, declaring a €59 million profit for the period after having posted a €40 million loss one year prior.

The €99 million turnaround for the fintech company can be attributed to several reasons, including its continuing success in breaking into the US market. However, one major story to come out of the results is Klarna’s striking return on its investment in AI.

Its AI customer service assistant, Kiki, helped revenue for employee jump by 73 per cent, with each Klarna employee generating over €589,000 in revenue over the past year.

“This efficiency helped us grow revenue while keeping operating expenses flat,” said the company.

Impressive results, certainly. But can they be replicated in Malta?

MaltaCEOs.mt spoke to Head of Investments at GO Ventures Paul Grech to see whether AI solutions can have business potential in the local context.

“Tools like these will eventually become the standard, even in smaller markets like Malta,” he replies.

“While it may take slightly longer due to the market size and the unique challenges of the Maltese language, I am confident the adoption will happen and much sooner than many expect.”

Mr Grech expects that when it does, Maltese companies “will have the opportunity to elevate customer engagement to entirely new levels.”

He notes that what Klarna has achieved with Kiki is “particularly impressive, especially given that they only began working on it in 2022.”

He adds: “To fully understand its impact, you need to look beyond the surface. Kiki, which handles over 35 languages and has facilitated more than 2 million conversations, has reduced average ticket resolution time from 11 minutes to under two minutes. This has resulted in a 25 per cent decrease in repeat inquiries.

“Such improvements in customer service are nothing short of transformative.”

Mr Grech, who also serves as Senior Manager in charge of Strategy and Investments at GO plc, had previously taken to LinkedIn to encourage “those who still think that tangible AI impact still lies in the future” to take a look at Klarna’s results.

He referred to a comment from the CEO, where he revealed that the AI assistant now performs the work of 700 employees.

“In other words, AI is now handling the workload of 700 employees,” he said.

But while Klarna is the most recent example of a company leveraging AI to enhance results, it is far from the only one, he tells MaltaCEOs.mt: “Industry leaders like Amazon and Alibaba have been developing their own AI models for years, enabling them to offer more personalised and seamless services to customers.”

Another noteworthy case, shares the investment strategist, is Mondelēz International, the American multinational formerly known as Kraft Foods Inc.

“They are using AI to support their sales teams by improving pitches, suggesting tailored offerings, and optimising order quantities. This AI-driven approach has had a direct impact on improving sales performance by providing tailored recommendations, streamlining order processing with pre-suggested orders, and highlighting opportunities for upselling.”

Concluding, Mr Grech shares his sentiment that businesses “can no longer overlook the advantages of AI.”

Meanwhile, societies must “begin preparing for the significant changes on the horizon.”