Posted In:

Payments, Banking, Lending

Chatbot Alpha (or Horror)


May 18, 2024


Sarah Parsons Wolter

Posted In:

Payments, Banking, Lending


May 18, 2024


Sarah Parsons Wolter


As AI continues to revolutionize customer service, it's clear that not all AI solutions are created equal.

For example, a clear disparity exists between the success of Klarna’s customer-facing AI assistant and the reported struggles of the UK's HMRC (HM & Revenue Customs) customer service AI assistant. Klarna's AI, powered by OpenAI, has been a game-changer: efficiently handling 2.3m conversations in just one month and maintaining high customer satisfaction levels. This AI solution has cut average resolution times from 11 minutes to just 2 minutes.

Unfortunately, these efficiency gains aren’t guaranteed alongside every chatbot implementation. HMRC's efforts to cut costs by reducing helpline staff and promoting digital services have come up short, with a recent National Audit Office (NAO) report revealing that HMRC’s new AI customer service tool could resolve just half of the queries it sampled.

The recent 9% reduction in human staff and the under-achieving HMRC AI assistant have left many taxpayers without the support they need. In fact, the same NAO report found that across the country, the average wait time per caller amounted to a total of 798 years(!) spent waiting on the phone (up from 365 years three years prior). It's almost as if we've replaced friendly advisors with automated agony.

Implemented well though, AI-powered customer support can have an enormous positive impact. Klarna expects an additional $40m in annual revenue. Who knew a chatbot could be such a cash cow?

The contrasting outcomes of AI-driven customer service are a powerful reminder that merely implementing AI solutions is insufficient. The success of these solutions depends on their technological nuances and how they are practically applied. After all, who knew that going from “human touch” to “helpline horror” could be so taxing?


Portfolio News

Flutterwave earns prestigious spot on CNBC's 2024 Disruptor 50 list - Congratulations to portfolio company Flutterwave for this recognition, alongside companies like OpenAI, Stripe, Monzo. This recognition underscores its innovation and expansion, achieved amidst challenging market conditions and economic downturns. Read more

WheeKeep closes $8m Series A round - WheeKeep, a Saudi-based company specializing in self-storage solutions, has announced the closure of its series A investment round, led by Fintech Collective, with participation from both domestic and international investors. The new capital infusion will fuel WheeKeep's expansion plans in the Saudi market and beyond. Read more

MoneyLion: On a mission to become the Expedia of financial services - MoneyLion has invested in a broad line of products and solutions that now include embedded finance. Traditional banking customers are looking outside of their banking networks and gravitating toward platforms to gain access to financial services. Read more

CapIntel and BMO private wealth working together to strengthen advisor-client relationships - The partnership will provide investment professionals with more capacity to focus on strategic decision-making and client interactions, and increases productivity for professionals in serving clients more effectively. Read more

Embroker: Transforming the digital insurance-buying experience - In an interview with Pulse 2.0, Embroker CEO Ben Jennings discusses a variety of topics, including how the company was founded, its products, the evolution of its technology, and future plans, amongst other things. Read more

Mexican startup Mattilda expands to Colombia, targets school financing - With $53.2m in total capital, including $24m in debt from and $29.2m from seed and Series A funding rounds, Mattilda is poised for significant growth. The company’s goal is to reach about 10% of Colombian educational institutions, translating to roughly 400 schools. Read more

Five African startups redefining transport, e-commerce and logistics - Congratulations to FTC portfolio company Matta, for being recognized by The Africa Report as a top startup redefining their industry. Matta, a Nigerian startup set up two years ago as a digital marketplace for chemicals and materials, has expanded its footprint to three other African countries and is poised for its Series A funding this year. Read more

1inch joins Mastercard blockchain program - MasterCard and 1inch aligned to create a unique debit card that enables it to invest in cryptocurrencies easily. For the owners of cryptocurrencies, this performs the function of a debit card to exchange their virtual assets for money to make physical purchases at retail stores and withdraw their cash at points where standard debit cards are accepted. Read more

Empowering people to make the best financial decisions with Dee Choubey of MoneyLion - On this podcast Dee talks about his journey from Wall Street to fintech entrepreneur and the transformative impact of technology, specifically AI, in business and how it has propelled MoneyLion to new heights, all without sacrificing the human touch required to be customer-centric. Read more

Chatbot Alpha (or Horror)

Klarna's new AI tool does the work of 700 customer service reps - Klarna says that its AI Assistant is "more accurate" in "errand" (ticket) resolution and has contributed to a 25 percent drop in repeat inquiries. Tickets are now completed in less than two minutes, compared to 11 minutes previously. The tool is now available in 23 markets and communicates in more than 35 languages. Read more

Britons spend total of 800 years waiting to speak to the taxman - HMRC has cut its helpline staff while promoting digital services that do not provide like-for-like replacement to save money, the spending watchdog has revealed. Read more

Industry News

Judge blocks new U.S. rule limiting credit card late fees - Set to take effect on Tuesday, the rule would save households $10b a year in “junk fees,” the Consumer Financial Protection Bureau said. Read more

Apple touts stopping $1.8b in App Store fraud last year in latest pitch to developers - Apple released new data about anti-fraud measures related to its operation of the iOS App Store, trumpeting a claim that it stopped over $7b in “potentially fraudulent transactions” across the four years between 2020 and 2023. It also said it blocked over 14m stolen credit cards and more than 3.3m accounts from transacting again between 2020 and 2023. Read more

The $50b consumer giant piling into insurance - JAB’s not like other conglomerates. It’s essentially a family office, managing the permanent capital of Germany’s billionaire and intensely private Reimann family. (Some $33b of the group’s total assets are attributed to them.) The pivot will certainly be a challenge. Although JAB has some exposure to the insurance business already — namely, through a stable of pet insurance companies — it’s limited. Read more

13F filings reveal incredible institutional investor buy-in to Bitcoin ETFs - Over 700 professional investment firms own a total of over $5b worth of bitcoin ETFs, which marks an unprecedented scale of institutional ownership base for a new ETF launch. Among the iconic asset managers holding one of the Bitcoin ETFs include Hightower Advisors, Cambridge Investment Research, Brown Advisory, and the State of Wisconsin Investment Board. Read more

Visa adds new way to share customer shopping data with retailers - The data will be shared via the payments giant’s proprietary “tokens,” which provide an added layer of security between a consumer’s bank information and a merchant. Shopping inclinations and other information based on past transactions will be shared via token with retailers with the consent of consumers. Read more

Supreme Court rules Consumer Financial Protection Bureau funding structure is legal - The ruling protects the CFPB from the existential threat that Republicans in a bitterly divided Congress would block annual appropriations for the agency, which currently is funded by the Federal Reserve system. Read more

GameStop, AMC shares soar as traders pounce on meme stocks - The latest rally erupted on Monday following the return to social media of Keith Gill, who drove the meme-stock mania of 2021 under the moniker “Roaring Kitty.” Gill shot to fame that year by rallying day traders on Reddit in an effort to squeeze GameStop short sellers. Read more

BlackRock closes in on crown of world’s largest bitcoin fund - BlackRock’s spot bitcoin exchange traded fund has garnered $16.7bn of assets since it launched four months ago, putting it less than $1bn behind market leader Grayscale, which enjoyed a 10-year and $28bn head start. Read more

Executives are bullish on GenAI use within finance and accounting despite low adoption rates - GenAI adoption in finance and accounting is growing, with 6.6% of organizations already implementing it, 27.8% planning future use, and 38.7% establishing governance strategies. Read more

Vanguard’s new chief plans to lure ‘millions and millions more’ clients - Vanguard’s newly named chief executive Salim Ramji, the first outsider to lead the $9.3t asset manager, has big plans to extend its reach well beyond the 50m people it serves. Read more

Futures exchange CME plans to launch bitcoin trading - The world’s largest futures exchange is planning to launch bitcoin trading, aiming to capitalize on surging demand this year among Wall Street money managers to gain exposure to the cryptocurrency sector. Read more

Milei targets labor law that’s set to hand banker $10m severance - A one-time Citibank employee who earned a $130k salary working in New York stands to collect a $10m severance award, thanks to Argentina’s pro-labor laws. Read more

Select Financings

AgriDex - London based platform for tokenizing agricultural commodities raised $5m in pre Seed funding led by Endeavour Ventures. Read more

Aplazo - Mexico based BNPL startup raised $45m in Series B funding led by QED Investors. Read more

Arch Labs - New York based Bitcoin-native application platform raised $7m in Seed funding led by Multicoin Capital. Read more

Arcium - Switzerland based on-chain confidential computing project raised $5.5m in Series A funding led by Greenfield Capital. Read more

Butter Payments - San Francisco based payments management platform designed to mitigate accidental payment failure raised $10m in new funding led by Atomic and Norwest. Read more

Cover Genius - New York based startup that embeds insurance into businesses raised $80m in Series E funding led by Spark Capital. Read more

CRMBonus - Brazil based marketing automation platform for retailers raised $75m in Series B funding led by Bond. Read more

Data Zoo - Sydney based global identity verification startup raised $22.7m in Series A funding led by Ellerston Jaade. Read more

Ekko - London based climate fintech raised $2.5m in Seed funding led by Fuel Ventures. Read more

Enspired - Vienna based power trading startup raised €25.5m in Series B funding led by Zouk Capital. Read more

FinLocker - St. Louis based white-label financial fitness and homeownership app raised $17m in Series B funding led by Radian Group. Read more

Fintech Farm - London based neobank-in-a-box startup raised $32m in Series B funding led by Nordstar and Bank of Georgia. Read more

Harbor Lab - Greece based maritime accounting software startup raised $16m in Series A funding led by Atomico. Read more

Humanity Protocol - US based blockchain identity verification startup raised $30m in Seed funding led by Kingsway Capital. Read more

Layer - San Francisco based embedded accounting platform raised $2.3m in pre Seed funding led by Better Tomorrow Ventures. Read more

PayHOA - Kentucky based homeowner's association management software provider raised $27.5m in Series A funding led by Elephant. Read more

Polymarket - New York based prediction market raised $45m in Series B funding led by Founders Fund. Read more

Purple Dot - London based preordering and waitlist platform raised $10m in Series A funding led by OpenOcean. Read more

Restaurant365 - California based provider of restaurant management software raised $175m in new funding led by Iconiq Growth. Read more

Roam - New York based assumable mortgage platform raised $3m in Seed funding led Founders Fund. Read more

Sesame - Spain based HR software company raised €23m in Series B funding led by GP Bullhound and PSG. Read more

SmarterDx - New York based revenue cycle management company raised $50m in Series B funding led by Transformation Capital. Read more

Sona - London based workforce management platform for frontline employees raised $27.5m in Series A funding led by Felicis. Read more

Veda - Germany based payroll as a service provider raised €17m in new funding led by CIBC Innovation Banking. Read more

Yendo - Dallas based startup providing vehicle-secured credit cards raised $15m in Series B funding led by FPV Ventures. Read more


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