Fintech leader PhonePe has made impressive advancements by incorporating Artificial Intelligence (AI) into its operations, achieving a significant reduction in its customer support workforce. As detailed in the company’s latest annual report filed on October 21, the number of support agents decreased from around 1,100 to just over 400 over the past five years. This transformation, covering fiscal years 2019 to 2024 (FY19 to FY24), highlights how AI adoption has reshaped the company’s customer service processes.
During this five-year span, PhonePe saw a remarkable 40-fold increase in transaction volumes. This exponential growth demonstrates the company’s successful strategy of scaling operations through AI-driven efficiency. Despite the rapid rise in transactions, PhonePe managed to reduce its workforce significantly, illustrating the power of automation in optimizing business processes.
One of the report’s key highlights is that over 90% of customer service inquiries are now resolved by AI-powered chatbots. This shift to automated systems has enhanced PhonePe’s operational efficiency, allowing it to handle large-scale operations with a leaner workforce. The company attributes this transformation to its focus on AI and automation, which has improved its cost structure and unit economics.
Job Creation Amid Workforce Reduction: 22,000 New Jobs in India
Despite the reduction in customer support staff, PhonePe’s AI-driven innovations have not resulted in overall job losses within the fintech sector. On the contrary, the company has helped create more than 22,000 new jobs across India, particularly in areas focused on strengthening the country’s digital payments ecosystem. PhonePe’s workforce now includes over 1,500 engineers dedicated to advancing its technological capabilities, highlighting its commitment to innovation and job growth.
AI-driven automation has had a substantial financial impact on PhonePe’s performance. In the past year, the company reported a 74% increase in revenue, along with a positive net profit. This growth underscores how AI has not only streamlined operations but also boosted efficiency in tasks that were previously done manually. By leveraging AI, PhonePe has been able to scale its business while maintaining profitability.
While concerns about AI-driven job displacement persist, experts argue that automation does not necessarily lead to widespread unemployment. In PhonePe’s case, AI has both streamlined operations and created new job opportunities, balancing the potential downsides of automation with positive employment outcomes. This suggests that technological advancements, when used strategically, can contribute to economic growth and job creation.