Home » US business news » How The Bunq AI Strategy Is Shaping the Future Of Fintech
How The Bunq AI Strategy Is Shaping the Future Of Fintech
https://www.whatjobs.com/news/usa/us-business-news/how-the-bunq-ai-strategy-is-shaping-the-future-of-fintech
By Nagasunder in US business news, posted September 12, 2024
The operating landscape for fintech companies has become increasingly challenging as inflation weakens consumer confidence and rising interest rates make it more difficult for startups to secure funding.
Many prominent fintech firms have responded by cutting jobs and turning to artificial intelligence (AI) to streamline operations.
Fintechs Slash Jobs
Several fintech giants have been forced to downsize in response to the tougher economic environment.
In January 2023, cryptocurrency exchange Coinbase slashed 950 jobs.
This move was followed by PayPal, which reduced its global workforce by 2,000 employees in early 2023 and then cut an additional 2,500 jobs in 2024.
With inflation reducing spending and rising interest rates making it harder for startups to raise capital, the financial sector has had to adapt.
Many companies are turning to AI to drive efficiency and lower costs, with some even using the technology to significantly reduce headcount.
Klarna Leverages AI to Cut Workforce
Swedish buy now, pay later firm Klarna has seen significant operational efficiencies throughthe application of AI.
The company reduced its workforce from 5,000 to 3,800 over the past year through attrition alone. It aims to further reduce headcount to 2,000 by implementing AI in areas like marketing and customer service.
Klarna’s use of AI has driven operating expenses down and improved gross profits.
In its first-half earnings report, Klarna said its average revenue per employee had increased by 73 percent year-over-year. This highlights highlighting the significant impact AI has had on its internal operations.
The company credits AI for boosting its scale efficiencies and helping it weather the current economic storm.
Need Career Advice? Get employment skills advice at all levels of your career
AI as a Tool for Efficiency, Not Job Reductions
Despite this trend, not all fintech leaders see AI as a tool for reducing jobs. Ali Niknam, CEO of Bunq, a Dutch neobank, believes AI empowers employees rather than replacing them.
According to Niknam, AI helps employees work more efficiently and deliver better results for customers.
He said:
“We’ve been deploying AI systems and solutions years before they became mainstream, [but] in our experience AI empowers our employees to be able to do better by our users, more effectively and efficiently,”.
Bunq reported its first full year of profitability in 2023, generating a net profit of €53.1 million ($58.51 million).
The company, which was valued at €1.65 billion by investors, is a clear example of a fintech using AI to enhance rather than replace its workforce.
The Future of Fintech in a Changing Market
As inflation and interest rates continue to put pressure on the fintech sector, companies are increasingly relying on technology to stay competitive.
AI’s role in boosting efficiency and reducing costs has already proven invaluable for firms like Klarna, while others like Bunq see it as a way to empower employees rather than shrink the workforce.
In this challenging environment, fintech companies must strike a balance between cutting costs and maintaining their capacity for innovation.
Whether through AI or other strategies, the industry will likely continue evolving to meet the demands of a rapidly changing financial landscape.
Follow us on YouTube, X, LinkedIn, and Facebook
