Last updated: Generative AI and customer experience: The power and risks

Generative AI and customer experience: The power and risks

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No generative artificial intelligence (AI) was involved in producing this article, but could you tell the difference if it had? With the development of generative AI systems like ChatGPT, many of us are asking important questions about the integrity of our systems and what AI means for the future of work and humanity as a whole.

AI has come a long way in just a few short years. From simple chatbots to complicated neural networks, AI is becoming more advanced every day. As a result, things that were once unimaginable—like generating human-like text on a massive scale—are now possible.

These compelling advancements have made an investment in AI appealing.

In fact, 91% of top businesses report having an ongoing investment in AI—and they’re hoping to increase that investment.

But while generative AI offers incredible opportunities to improve the quality of life, work, and customer experiences, many are concerned about the potential power of these tools.

So, what does the future hold for AI and customer experience? The answer isn’t straightforward. Along with the benefits come risks that must be managed.

Power and potential of AI for customer experience

Between virtual assistants, chatbots, and self-driving cars, AI is transforming not only industries, but also our daily lives.

One of the most significant benefits of artificial intelligence is its ability to improve operational efficiency. For example, healthcare organizations have already started to invest in AI-powered medical diagnosis systems, which drive faster diagnoses than a human doctor.

Similarly, AI has enabled e-commerce companies to hyper-target their customers with goods by recommending products uniquely suited to individual shoppers.

By streamlining processes, AI has also made it easier for organizations to channel their talent into proactive, analytical responsibilities rather than administrative duties. For many, AI has freed their teams from mundane tasks, transforming employee experiences to improve long-term retention and revenue.

When developed and used carefully, AI has the potential to drastically improve job satisfaction and performance for better customer experiences and outcomes.

Tread carefully: AI risks require governance

AI offers a lot of opportunities to improve the way we live and work, but we also need to be aware of its potential negative consequences so we can prepare for them.

Worries about job loss are widespread, but fear of unregulated AI goes much further. Some AI leaders have sounded the alarm about the risk to humanity of malicious actors using AI for destructive purposes, and the long-term risks of giving up too much control to AI.

Consumer privacy, biased programming, physical safety, and murky regulations are all potential risks that we need to watch closely as we forge the path for AI. Relying on AI with blind confidence could lead to machinery malfunctions, discrimination, privacy violations, and undermine civil liberties.

Clearly, AI development needs moral governance in order to set us on a path for good. Moreover, the human element must remain integral, with AI empowering people to maximize their potential, not supplant them.

4 ways AI improves customer experience

According to Google CEO Sundar Pichai, artificial intelligence will be more capable than anything humankind has seen before, with an impact even more profound than the discovery of fire or electricity.

AI holds the potential for significant advancements throughout industries and our everyday lives. Here are the developments to watch on the customer experience front:

  1. Personalization: AI helps businesses gain a better understanding of their customers’ behavior and preferences in order to provide personalized product recommendations and offers. By identifying what’s most relevant to customers, brands can provide the right content at the right time for better engagement and results.
  2. Predictive analytics: Beyond offering personalized recommendations, AI will also be able to analyze large amounts of data, empowering companies to anticipate customer needs and inform product development and business strategy. Companies already use AI to identify customers that are at high risk of churning, enabling them to prioritize inventory for their most valuable customers. By connecting operational data from ERP and other systems to contextual customer data, brands can deliver intelligent CX.
  3. Better customer service: The impact of AI on customer service will go beyond super-smart chatbots. AI and connected systems helps agents to quickly find the right data to provide fast resolutions and highly personalized service. With AI insights, service becomes proactive instead of reactive.
  4. Guided selling: AI and machine learning can help B2B sellers focus on the best opportunities by providing data-driven insights. Sellers can respond to buyer-driven signals for better engagement and optimal outcomes.

Altogether, AI promises to help businesses boost efficiency of their marketing, sales and commerce operations and improve CX to increase retention and conversion rates.

Ethical AI: Protecting data privacy

As we look forward to these powerful opportunities for customer experience, we also need to take steps to mitigate AI risks.

At SAP, we’re committed to ethical and transparent development of AI. Our approach upholds the United Nations guiding principles on business and human rights and follows our own seven guiding principles, including placing data protection at the core of every product and service.

For example, our enterprise-ready partner agreements are designed to protect customer data privacy and security. While customer data and context are required to receive meaningful prediction results, we ensure that customer data isn’t used by third-party vendors to train foundation models.

Artificial intelligence offers an opportunity for us to offer customers incredible experiences and outcomes. From automation and streamlined processes to greater efficiency, all of us can benefit from its capabilities. With the right governance, AI promises a better future for us all.

Better.
Faster.
Amazing every time.

A CX that drives loyalty + bottom lines starts HERE.

Frequently asked questions (FAQs):

Artificial intelligence, as highlighted by Sundar Pichai, is set to redefine the landscape of customer experience. Through AI, businesses can offer unparalleled personalization, harness predictive analytics for forward-thinking strategies, elevate customer service beyond traditional means, and employ data-driven insights for optimal B2B engagements. Essentially, AI stands as a game-changer for businesses aiming to refine or even redefine their operations and enhance customer satisfaction.

Generative AI is an artificial intelligence technology that is adept at crafting novel and realistic artifacts, which spans a gamut from text and images to audio and synthetic data. Drawing inspiration from vast datasets, gen AI mirrors the characteristics of its training data, producing content that, while reflective of the original, is distinctively unique.

Generative AI, as showcased by systems like ChatGPT, has the ability to profoundly transform customer experience. It enables unparalleled personalization and predictive insights, reshaping how businesses engage with customers. However, with its vast potential comes inherent risks, from consumer privacy to ethical considerations. As we harness the potential of AI, it is crucial to adopt a balanced approach along with an appropriate regulatory framework to ensure a cohesive blend of humans and machines.

To ensure ethical use of generative AI in personalization, businesses should:

  • establish a clear and transparent AI ethics policy detailing data collection, usage, and protection.
  • prioritize unbiased data for training and continuously monitor and rectify models for potential biases.
  • empower customers with control over their data, including visibility into its usage, ability to limit usage, or delete data.
  • clearly communicate to customers how generative AI influences their experience.
  • stay informed on AI advancements and emerging ethical considerations to ensure responsible use of generative AI technologies

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