How PhonePe Leveraged AI To Reduce Customer Support Teams By 60%

Fintech giant PhonePe has slashed its customer support staff by 60% over the past five years, from around 1,100 agents to just over 400, while tapping artificial intelligence, according to its annual report filed today (October 21).

The company also claims to have logged a 40X growth in transactions between FY18-19 and FY23-24.

It said that the sharp reduction in its staff has been driven by adoption of AI-driven automation, with over 90% of customer issues now resolved through chatbots. 

“From FY18-19 to FY23-24, transactions surged over 40X, while our customer service team has reduced by 60% from approximately 1,100 to 400+ agents,” the report said. 

Despite cutting its team, PhonePe has improved customer satisfaction, as reflected in a growing Net Promoter Score (NPS) over the same period.

NPS is a market research metric that is based on a survey question asking respondents to rate the likelihood that they would recommend a company, product, or a service to a friend or colleague. 

“This efficiency was achieved by increasing automated customer service issue resolutions powered by AI-driven chatbots, to over 90%,” the company further added. 

This comes as an increasing number of companies are adapting AI to reduce cost and increase efficiency. Last year in December, fintech major Paytm reportedly laid off 1,000 employees due to the increasing usage of AI in its operations. 

In January, it was reported that adtech unicorn InMobi was realigning its business operations across technology, organisational structure, people and skills by deploying AI– with a likely result of job losses for 125 staff or around 5% of its then workforce of 2,500. 

While earlier this year, Tata Consultancy Services (TCS) chairman N Chandrasekaran said that GenAI will lead to job losses in certain sectors undergoing automation, resulting in higher productivity. 

Meanwhile, in FY24, PhonePe reported a 73% jump in revenue, reaching INR 5,064 Cr, compared to INR 2,914 Cr in FY23. 

The company also achieved a positive Adjusted Profit After Tax (PAT) of INR 197 Cr, a sharp turnaround from the INR 738 Cr loss recorded last year.