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00:00IN THE KLAMA RETAIL REPORT. THE CEO JOINS US NOW FOR US -- ON THIS. YOU LOOK AHEAD TO HELP PEOPLE WILL OPEN THEIR POCKETBOOKS HOW WILL AI SHOW ITSELF IN TERMS OF HOW PEOPLE ARE SPENDING IT RETAIL. GUEST: FIRST OF ALL, I TRIED THIS IN NOVEMBER, WHEN IT STARTED TRENDING IN TWITTER. I SAID WHAT IS THIS THING? IT WAS MAGIC TO ME. I FELT LIKE WHEN I OPENED UP THE INTERNET THE FIRST TIME 20 YEARS AGO. IT FELT SUPER IMPRESSIVE. WE INSTANTLY GOT IN TOUCH WITH SAM AND I SAID LOOK I WANT KLAMA TO BE YOUR FAVORITE GUINEA PIG OVER AT OPENAI, THAT IS THE WAY TO DO THESE THINGS WE SEE DRAMATIC SHIFT THIS. I CODED MYSELF, WHEN MY BIGGEST REGRETS IS I NEVER BECAME AN ENGINEER. WITH THAT SAID, WHAT IS CLEAR, THE TOOLS OUT THERE, THE APPLICATIONS THAT ARE CHANGING ANGST ARE NOT YET. THEY WILL COME IN NEXT SIX TO 12 MONTHS WE WILL ALL SEE BETTER SHOPPING EXPERIENCES. SHOPPING ASSISTANCE, PROVIDING YOU A HIGH CONVERSION RATE FOR RETAILERS. ASSISTING CONSUMERS TO FIND BETTER PRICES, BETTER OFFERS, ETC., I EXPECT TO SEE A EXPLOSION OF NEW TOOLS AND SOURCES, NEXT 12 MONTHS TO UTILIZE THE TECHNOLOGY TO PROVIDE A MUCH RICHER AND MUCH MORE ACCURATE EXPERIENCE FOR CONSUMERS. SUPER SUPER INTERESTING TO FOLLOW. ALSO THERE SEEMS TO BE, THE STUDIES OF OUR SHOW, A HUGE BIG OPENING ON CONSUMERS. THEY ARE WILLING TO TRY AND TEST THESE THINGS, THEY BELIEVE CAN MAKE A DIFFERENCE. ALEX: WHEN I THINK ABOUT THE EVOLUTION OF RETAIL WE HAD THE MALL START TO BRING THINGS TOGETHER ON A REGIONAL BASIS OR A TOWN-BASED BASIS. THEN WE HAD ONLINE SHOPPING WE CAN BUY ANYTHING FROM ANYWHERE. E-COMMERCE PLAYERS SHOWED UP. IT HAS EVOLVED TO WHERE YOU HAVE ALMOST TOO MUCH CHOICE. IF YOU LOG ONTO AN E-COMMERCE PLATFORM IT IS HARD TO NARROW DOWN IF YOU DO NOT KNOW EXACTLY WHAT YOU'RE LOOKING FOR. IS THAT A PROBLEM YOU EXPECT? SOME OF THE EARLY APPLICATIONS MIGHT BE A LOW HANGING FRUIT TO SOLVE WHEN IT COMES TO BRINGING AI IN. PERHAPS TO HELP FOLKS DISCOVER THINGS ON THEIR PREFERENCES MORE EASILY. GUEST: YOU ARE SPOT ON. REMEMBER WHEN YOU WERE LIVING IN A SMALL CITY? THERE WAS ONE DEPARTMENT STORE. THEY HAD NICELY CURATED EVERYTHING NEEDED TO BUY FOR US. EVERYTHING WAS THERE, YOU DON'T NEED TO LOOK ELSEWHERE. NOW YOU ARE OVER WALKED -- OVERWATCH WITH EVERYTHING. YOU THINK ABOUT THE PRODUCTS, THE DURATION COMING THING ABOUT THE TECHNOLOGY, THE LOGISTICS TO BRING THE TECHNOLOGY TO THE CONSUMER. ON THE CURE RATION SIDE COME -- DURATION SIDE HAS GONE CRAZY. YOU HAVE SEEN INSTAGRAM PEOPLE TRYING TO INFLUENCE PEOPLE. INFLUENCERS RECOMMEND PRODUCTS. RETAILERS, THE BRANDS THEMSELVES TRYING TO CURATE. CURE RATION TO A POINT IS A HUGE OPPORTUNITY. WE LAUNCHED SEARCH IN THE U.S.. THERE HAS BEEN NO ONE LAUNCHING SEARCH IN THE U.S. AGAINST AMAZON FOR THE LAST 15 YEARS. WE SEE TREMENDOUS TRACTION TO REINVENT PRODUCT SEARCH. HOW DO YOU HAVE INTENT DRIVEN DISCOVERY AT THE RIGHT PRODUCT IN THE RIGHT PRICE, ETC., BUT ALSO THE INSPIRATIONAL. THAT IS THE AREA, CURE RATION IS CRITICAL. IN CHINA, IT USED TO BE 80% SEARCH, 20% RECOMMENDATION BY AI. 80% OF OUR PEOPLE BY ON TEEMU IS AI RECOMMENDATION, NOT SEARCH ANYMORE. THAT SHOWS YOU WHAT TECHNOLOGY CAN MEAN AS A SHIP. ALEX: GOOGLE CEO WROTE AN OP-ED RECENTLY THAT BUILDING AI RESPONSIBLY IS THE ONLY RACE THAT MATTERS INSTEAD OF BUILDING UP AI CHOPPED. HE BROUGHT IN REGULATION. WHAT DO YOU SEE AS THE POTENTIAL PROBLEMS OR PITFALLS FOR AREAS THAT MIGHT BE CONCERNING THAT RESULT FROM THE USER INTEGRATION OF AI IN SHOPPING IN YOUR WORLD? > > AS YOU ARE A PAYMENT COMPANY, FRAUD IS A BIG ASPECT, THERE IS INDICATIONS ON FRAUD PROTECTION. I THINK ON A SOCIETY LEVEL, AS A SOCIETY, I RESPECT THAT A LOT WHEN I SPEAK TO PEOPLE. TECH LEADERS. I AM HAPPY TO HEAR THEM PROMOTE THE AMAZING OPPORTUNITIES IT PRESENTS BUT ALSO HIGHLIGHT THE RISKS. THAT IS MORE FROM A SOCIETY PERSPECTIVE. IF I THINK MORE OF MY BUSINESS I THINK THERE IS ONE CRITICAL THING THAT COULD ACTUALLY MAKE A HUGE DIFFERENCE. IN SOME MARKETS IN EUROPE, SWEDEN IS A GOOD EXAMPLE, BASED CURRENTLY, WE HAVE ELECTRONIC IDENTIFICATION THAT IS AVAILABLE TO EVERYONE EVERYONE HAS IT ON THE PHONE. THAT MEANS THERE IS NO FRAUD. THERE IS NO PROBLEMS WITH PEOPLE PRETENDING TO BE SOMEONE ELSE. THERE IS MUCH LESS FRAUD THAN IN MANY OTHER MARKETS WE SEE. IT IS A CINCH -- SIMPLE THING, A DIGITAL PATH FOR JULY DEFECATION. AND NOT -- DIGITAL IDENTIFICATION. IF I CHAT WITH SOMETHING I NEED TO KNOW IF IT IS A HUMAN OR COMPUTER. YOU HAVE THE RESPONSIBILITY BE TRANSPARENT ABOUT THAT. THOSE JUICE OF THE THINGS THAT COULD MITIGATE SOME THE EARLY RISKS -- THOSE ARE TWO SIMPLE THINGS I COULD MITIGATE THE EARLY RISKS, CHANGES. SCARLET: THERE ARE PEOPLE OUT THERE SAYING KLARNA IS PIVOTING TO AI AND REGULATION TO AI AS REGULATION COMES FORTH TO BUY NOW PAY LATER IN AUSTRALIA AND THE U.K.. HOW WOULD YOU RESPOND TO THAT? GUEST: FORGET IT. BY NOW PAY LATER IS A FANTASTIC CREDIT PRODUCT FOR CONSUMERS. EVERYONE SHOULD WATCH, HIM EXPLAIN ON NETFLIX. YOU GET A 25 MINUTE SUMMARY OF ALL THE BAD PRACTICES. ALL THINGS ANGST DO WITH CREDIT CARDS, THE BUILDUP THE -- BANKS DO WITH CREDIT, TO BUILD UP THE BIGGEST ALLEN'S -- BALANCE. IT IS INTEREST-FREE, IT IS FIXED INSTALLMENTS, WE DO NOT PUSH IT IN YOUR FACE TO MAKE YOU BELIEVE YOU CAN SPEND MORE THAN YOU HAVE. WE ARE TRYING TO BUILD A RESPONSIBLE CREDIT CARD. IT IS STILL CREDIT. ALL CREDIT HAS RISKS AND NEEDS TO BE OFFERED IN A RESPONSIBLE WAY. AS A CREDIT FORM IT IS SUPERIOR TO THE CREDIT CARDS. IT IS BETTER FOR US IN AN UNCERTAIN ECONOMIC ENVIRONMENT. WE UNDERWRITE EVERY TRANSACTION. WE SEE 40% BELOW CREDIT CARD TRANSACTION LOSSES. HALF MY BALANCE SHEET IS UNDERWRITING THE NEW METHODOLOGY. I CAN QUICKLY CHANGE TO AN ECONOMIC ENVIRONMENT LIKE THIS ONE. BANKS WILL WAIT TWO YEARS BEFORE THEY SEE A SHIFT IN THE BALANCE SHEET DUE TO CHANGES IN UNDERWRITING. ALEX: ONE MORE QUICK WHEN ON AI BECAUSE WE HAVE BEEN TALKING ABOUT THAT. THE RACE IS ON, THE RACE IS ON FOR TALENT. YOU JUMPED IN QUICKLY TO WORK WITH OPENAI. WHAT DOES HIRING LOOK LIKE INTERNALLY AT KLARNA? WHERE YOU FIND THE INDIVIDUALS TO MAKE SURE THAT TYPE OF TECHNOLOGY CAN BE SEAMLESSLY TESTED, INTEGRATED INTO WHAT YOU ARE WORK -- ROLLING OUT FOR CONSUMERS. > > I THINK IT IS OBVIOUSLY AN IMPORTANT QUESTION, OBVIOUSLY DATA SCIENTISTS ARE IN HIGHER DEMAND. I WANT TO GET AGAIN HOW MUCH THIS IS JUST ABOUT CURIOSITY. ENCOURAGING PEOPLE WITHIN YOUR CULTURE TO INNOVATE AND TRY AND TEST. ONE WAY I MEASURE RIGHT NOW, KLARNA'S AI INVOLVEMENT. WE OFFER THEM A CHAT GDP FOR -- 4 AI POWERED ACCOUNT. WE ARE AT -- I WANT TO GET THE 5000. I WANT EACH ONE OF THEM TO EXPERIMENT AND LEARN TO UTILIZE THE TECHNOLOGY. IT TOOK YEARS FOR PEOPLE TO DISCOVER THE POWER OF GOOGLE 20 YEARS AGO HOW IT CAN SAVE YOU TIME, MORE PRODUCTIVE.

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Klarna CEO on the Future of AI-Powered Shopping

Klarna CEO Sebastian Siemiatkowski joins Bloomberg's Scarlet Fu and Alex Barinka to discuss the company's latest Future of Retail report and what it says about how consumers are thinking about how AI might impact their shopping experience. (Source: Bloomberg)

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