The future of CX blends AI and chatbots with the human experience

In the rush to adopt new technologies, organizations often repeat past mistakes by prioritizing efficiency and cost-cutting over delivering exceptional customer experiences (CX). The widespread implementation of chatbots serves as a prime example of this trend, writes Musa Hanhan, an executive and consultant specialized in CX strategies.

The implementation of chatbots is growing rapidly, but at the same time, it often in practice places CX on the backburner. While chatbots offer potential benefits, their misuse can lead to frustrated customers and damaged relationships.

Chatbots have become increasingly prevalent as part of the omnichannel experience. According to Gartner, by 2027, chatbots will become the primary customer service channel for roughly 25% of organizations. However, the focus on cost reduction often overshadows the potential for chatbots to create engaging experiences that build relationships and loyalty.

A real-life use case in effective chatbot implementation

Last month, I embarked on a mission to open a college fund for my niece, Jessie, who dreams of studying abroad. Little did I know, this simple task would showcase the remarkable potential of AI in banking.

As I logged into my bank's website, I was greeted by Sarah, an AI chatbot with a friendly avatar. When I mentioned “college fund account”, Sarah efficiently guided me to the relevant page and application process. Her prompt assistance saved me from navigating through countless menus.

Midway through the application, I hit a snag with potential tax implications. Sarah, recognizing the complexity of my query, gracefully admitted her limitations and seamlessly connected me with a human expert. This blend of AI efficiency and human expertise left me impressed.

Two days later, I noticed the funds hadn’t transferred. Sarah proactively offered help, quickly assessed the situation, and arranged for a human representative to call me. Noura from the advisor center resolved the issue in minutes, demonstrating how AI and human touch can work in harmony.

The real magic happened a month later. While checking Jessie’s account statement, Sarah not only recalled our previous interactions but also inquired about Jessie's academic progress. She even shared a college visit planner, adding a personal touch that went beyond mere transactions. This level of personalized engagement, powered by AI, truly wowed me.

This experience highlighted how thoughtfully deployed AI can transform customer relationships. By leveraging data intelligently, it can turn customer engagement into experiences that build trust and loyalty and create brand advocates.

To summarize the illustration of the potential of Gen AI-powered chatbots:

Initial Interaction: Sarah guides me as a customer to relevant information about opening a college fund account.

Seamless Handoff: When faced with a complex tax question, Sarah smoothly transfers the customer to a human agent.

Proactive Follow-up: Sarah initiates contact to resolve a fund transfer issue and arranges for a human representative to call.

Personalized Engagement: In a subsequent interaction, Sarah demonstrates knowledge of the customer's previous experience and offers relevant resources.

This journey with Sarah and the bank exemplifies the potential of AI in financial services where customer engagement is often prioritized over mere cost-cutting. It’s a testament to how technology, when used thoughtfully, can create meaningful connections in our increasingly digital world.

The future of customer experience

As AI technology advances, customer expectations for chatbot interactions are rising. A study by Emarketer forecasts that by the end of 2024, 33% of customers in the US will use AI-enabled banking chatbots. To meet these expectations, organizations must design experiences that connect and empathize with customers in digital environments.

From Cost-Cutting to Value Creation
In the past, organizations often prioritized cost reduction and efficiency in their CX strategies. This led to the widespread adoption of technologies like Interactive Voice Response (IVR) systems, which, while reducing operational costs, often resulted in frustrating customer experiences.

Today, the focus is shifting towards creating value through engaging and personalized interactions. By 2025, two-thirds of consumers are expected to engage with chatbots, increasing to 81% by 2030. This shift necessitates a reimagining of how we design customer experiences.

AI-Powered Human Understanding
Unlike the rigid, menu-driven IVR systems of the past, modern AI-powered chatbots like Sarah are capable of understanding context, anticipating customer needs, and providing personalized assistance. These advanced systems can seamlessly transition between automated responses and human intervention when necessary, creating a more natural and empathetic interaction.

Omnichannel Consistency
Unlike the siloed approach of the past, where each channel operated independently, the future of CX demands seamless integration across all touchpoints. Customers expect consistent experiences on a personal level whether they're interacting via chatbot, mobile app, website, or in-person, with their history and preferences recognized across all channels. This requires a deep understanding of customer preferences, behaviors, and emotions, leveraging data and AI to create experiences that resonate on a personal level.

Technology as a Complement, Not a Replacement
While past implementations often positioned technology as a cost-saving replacement for human interaction, the future of CX sees technology as a complement to human expertise. AI and chatbots should be integrated thoughtfully, enhancing rather than replacing the human touch that builds lasting customer relationships.

From Reactive to Proactive Engagement
Future CX strategies will move beyond simply responding to customer inquiries. Advanced AI systems will anticipate customer needs, offering proactive assistance and personalized recommendations. This shift from reactive to proactive engagement can significantly enhance customer satisfaction and loyalty.

Balancing human and AI interactions

The key to successful future CX lies in striking the right balance between automated efficiency with AI and chatbots, and human empathy. Organizations must carefully design their CX strategies to leverage AI for routine tasks while ensuring easy access to human support for complex issues or when customers simply prefer a human touch. Chatbots should be positioned as an engaging technology that enhances relationships and loyalty, rather than as a cost-cutting measure.

The key takeaways

The five key takeaways are:

Prioritize Experience: Focus on creating engaging customer experiences rather than solely on efficiency and cost-cutting.

Connected Experience: Implement chatbots as part of a holistic omnichannel experience strategy that includes smooth transitions to humans when necessary.

Personalization: Leverage AI capabilities to provide personalized interactions that build trust and loyalty.

Continuous Improvement: Regularly assess and refine chatbot performance based on customer feedback and evolving technologies.

Human-AI Balance: Strive for a complementary balance between AI-powered systems and human agents to deliver optimal customer experiences.

By embracing these principles, organizations can harness the power of AI and chatbots to create meaningful, engaging experiences that drive customer satisfaction and loyalty in the digital age.

About the author: Musa Hanhan is the founder of Xperiente, a boutique consultancy specialised in customer experience. Hanhan has over 20 years of expertise in enhancing customer experiences, is an Authorized Independent Advisor of NPSx by Bain & Company, and a Top 50 CX influencer according to CX Network.