Jun 2019
Originally published June 2019. Updated July 2024
If the customer is always right, and the customer experience journey continues to increase in complexity, finding the best ways to serve individuals at scale—well, that just gets more challenging by the day.
Can we find a solution in AI chatbots?
Digital product designers are at the forefront of this challenge, working to translate cutting-edge AI capabilities into tangible benefits for real users. While we constantly seek the next big innovation, we also evaluate its potential to improve the customer experience.
In the larger AI ecosystem, the brand-forward chatbot has an emerging story and a potentially exciting future. Once viewed as simple customer service tools, chatbots powered by AI are increasingly seen as powerful communication tools in their own right.
Businesses, organizations, and governments are shifting their approach to user interaction in tandem with technological advancements. Chatbots are no longer just about answering FAQs. They’re becoming the frontline of personalized customer experiences, sales, and product development.
Semrush reports the following AI statistics:
These numbers indicate a significant shift towards AI-powered customer engagement. But how are different sectors leveraging this technology?
As the adoption of AI chatbots grows, the vision for their future becomes increasingly important. Industry leaders are already contemplating how these tools will shape customer interactions.
The UK Government Digital Service has been experimenting with AI-powered chatbots for its GOV.UK Chat solution. CX Today reports that their findings show promise:
However, the bots were not immune to hallucination, where the system provided incorrect information as fact. There’s potential for the technology to “have a major, and positive, impact,” Chris Bellamy, Director of GOV.UK shared in Inside GOV.UK. Bellamy writes:
“The government has a duty to make sure it’s used responsibly, and this duty is one that we do not take lightly.”
For a growing number of doctors, AI chatbots—which can draft letters to insurers in seconds—are opening up a new front in the battle to approve costly claims, accomplishing in minutes what years of advocacy and attempts at healthcare reform have not.
According to the New York Times, Dr. Tariq said Doximity GPT, a HIPAA-compliant chatbot version, had halved the time he spent on prior authorizations. Maybe more importantly, he said, the tool—which draws from his patient’s medical records and the insurer’s coverage requirements—has made his letters more successful.
Since using AI to draft prior authorization requests, he said insurers have approved about 90% of his coverage requests, compared with about 10% before.
A study by New York University’s Grossman School of Medicine suggests that AI chatbots could “reduce the workload of care providers by enabling efficient and empathetic responses to patients’ concerns,“ according to lead study author William Small, MD.
The same study revealed that generative AI responses outperformed human providers in terms of understandability and tone by 9.5%.
Bank of America’s Erica, an AI-powered virtual financial assistant, helps customers with various banking tasks and provides personalized financial advice. Bank of America reported that since its launch, the assistant has handled over 1 billion interactions, and more than 98% of clients get the answers they need using Erica.
Wells Fargo’s assistant, Fargo, powered by Google’s AI, has also been a boon to the bank’s adoption of AI tech. Despite rigorous financial privacy regulations, according to VentureBeat, Wells Fargo has enrolled 4,000 employees in Stanford’s Human-centered AI program and is already executing “numerous” generative AI projects, focusing on enhancing back-office efficiency.
By exploring these real-world applications, we can see how AI chatbots are indeed providing solutions for complex customer engagement at scale while also identifying areas for improvement and future development.
AI chatbots offer promising solutions for customer engagement, but their implementation comes with risks. Recent examples highlight the need for careful consideration and robust safeguards.
CX Today reported that the Mayor of New York City was forced to defend the city’s “MyCity“ chatbot following a series of significant errors. Most notably, it advised some users to break the law by answering questions such as: “Do I have to accept tenants on rental assistance?“and: “Are buildings required to accept section 8 vouchers?“ with a definitive “no. “
The bot deduced that landlords are not mandated to accept these tenants. In New York City, it is unlawful for landlords to display prejudice based on the source of income, except in small buildings where the landlord or their family resides.
This incident underscores how AI chatbots can inadvertently provide incorrect or even illegal advice, potentially exposing organizations to legal risks.
Chatbots may reinforce biases or discriminatory practices if not properly designed and monitored. Errors like those in the NYC case can significantly damage public trust in government services and AI technologies.
Modern AI chatbots often combine multiple technologies to provide more natural and effective interactions:
While some simpler chatbots (like basic FAQ or weather bots) might rely primarily on NLP, most advanced customer engagement solutions combine these and other AI techniques to provide more sophisticated, context-aware interactions.
Is it too early for Gen AI with large language models where accuracy is crucial? Or should they begin with a predictable chatbot using NLP? This question highlights the ongoing debate about balancing innovation with reliability, especially in high-stakes environments like government services.
AI chatbots can significantly improve efficiency, but responsible technologies are designed to augment human intelligence. The goal should be to allow customer service professionals to focus on more complex, high-value interactions requiring unique human skills such as empathy and nuanced problem-solving.
To address these concerns, organizations implementing AI chatbots should:
Furthermore, because bias in AI chatbots can stem from various sources such as data, algorithms, and user interactions, a significant focus should be on effective mitigation strategies. Here are key approaches to address and prevent bias:
On the horizon, AI chatbots are set to revolutionize business-customer connections even further. Some of these capabilities are already emerging, and their sophistication and widespread adoption are expected to increase.
Current chatbots can detect basic sentiment, but future versions may be able to respond more nuancedly to complex emotional states, significantly improving customer satisfaction.
Building on current predictive capabilities, future chatbots may anticipate customer needs with greater accuracy, potentially resolving issues before they arise.
Current chatbots operate across multiple channels, but future iterations will likely provide a more consistent experience across all customer touchpoints, from text to voice to visual interfaces.
Current chatbots offer some degree of personalization, but future versions may create experiences that feel uniquely tailored to each individual, even when serving millions of customers.
Thoughtful integration of AI chatbots into your customer engagement strategy has the potential to enhance customer satisfaction. When formulating a chatbot strategy, we recommend keeping these points in mind:
As Mark Zuckerberg aptly noted:
“We think people want to interact with lots of different people and businesses, and there need to be a lot of different AIs that get created to reflect people’s different interests.“
We also envision an AI approach driven by empathy, where the needs and experiences of end-users stay at the forefront. We prioritize ethical considerations, transparency, and thorough testing to ensure positive and trustworthy customer interactions.
The future of customer engagement is increasingly conversational, personalized, and AI-enhanced. Embracing new technology enables businesses to build better customer connections, drive efficiency, and fuel innovation with valuable insights.
The path to AI-powered customer engagement may be complex. Still, the potential rewards—customer satisfaction, operational efficiency, and competitive advantage—may make it a journey worth taking.
As you contemplate your AI chatbot strategy, ask yourself:
The answers to these questions could define your competitive edge in the AI-driven future of customer engagement.
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