The most exciting opportunity for businesses to grow using artificial intelligence (AI) is using it to change the way they interact with customers. Even before generative AI was in the news, innovators were developing and using AI solutions, some were looking at business operations and some using its potential for new services and offerings.
But what I observe is that so many are unfortunately at an AI crossroads, not sure where to deploy and what business benefit to focus on. So why focus on customer interaction? The first and most powerful change businesses should make is to how they manage communications because it has the greatest potential to create change, but only if they can do it without causing pain and complexity.
How does AI hold so much potential for growth in this way? Today, customer interactions are experienced and conceptualised as ‘conversations’. Whether a shopper at a clothes retailer, or someone doing banking via an app – it’s no longer requests, forms or Q&A, but a conversation with a living and breathing brand. AI takes this to the next level – no more transactions but instead a rich conversation throughout the buying cycle.
Sticky consumers that have some sense brand of loyalty are key to business growth in sectors such as e-commerce, retail and banking and finance. Many recognise this already: IDC predicts that by 2024, 50% of the top 1000 companies in Asia Pacific will be using a customer data platform, increasing revenue by 5%. More often, that will be by deploying AI.
Adding AI to conversations means better analysis and understanding of data and being able to anticipate needs, interests, and communication preferences and trends - all of which are the basis for business growth. In fact, exposing AI to data from across different communication channels, from across a composable stack, will produce better information. With conversational marketing, support and data exchange all part of the mix businesses can reap many benefits:
- Alignment: AI helps drive data consolidation, tying information together in one place. Communications platforms with AI drive this change, and therefore time to growth.
- Business expansion: Offerings can go global much faster, less time is needed to understand customer needs in new industries or markets, and more customers can be serviced at scale with uniform quality of service.
- Co-pilots: Talent can be more efficient by using AI co-pilots, people can get faster access to meaningful data and easy-to-use tools, and so a competitive edge in decision-making and analysing opportunities.
- Demands: Gen Z and digital natives expect conversations, not transactions, so those that provide them are winning the customer experience battle, winning consumer hearts, minds and dollars.
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The conversational journey supported by AI, delivers operational efficiency and protects against revenue leakage. I see great examples from retail, telecoms, and banking and finance. In banking, conversational AI can help with simpler activities, such as checking balances, raising service requests, blocking cards in case of fraud, and real-time transaction notifications. In retail, it can help prevent cart abandonment and smooth over deliveries and returns.
The data shows business leaders are recognising this potential: By 2025, 45% of the top 1,000 companies in Asia Pacific will use artificial intelligence/machine learning to elevate context and nudge customers into unfamiliar and novel experiences that simultaneously improve sentiment metrics and brand upselling potential.
The conversational race
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Some geographical markets are progressing further than others with AI and conversational commerce. To mention a few - businesses in Singapore and Indonesia tend to be more focused on enhanced customer experiences and creating new revenue streams, while those in China, Thailand and the Philippines are more motivated to improve their business processes. Vietnam businesses have a lot of growth opportunities thanks to the high penetration of social media.
In Australia, competition is driving more conversational commerce with 79% expecting to increase spending on communications platforms, with sectors including healthcare, government and banking in particular. We see this in India too, where technology investment is very often used to gain a competitive edge, especially as mobile penetration is so high.
Roadblocks along the way
So we see there is a vast opportunity to deploy AI in APAC, especially in creating conversations with customers. But what is holding businesses back?
There is a training and developing aspect -- generative AI has been modelled on Western language, culture and data. Models and interpretation of data must be better adapted and turned into a ready-to-deploy state. Industry markets need a lot of specific customisation too.
There are concerns about data privacy. It is critical to ensure the algorithms are not trained on data that contains sensitive information, or there is a risk of the AI revealing this information in responses or making it easier for hackers to gain access to it.
There are also AI hallucinations – the risk of the algorithm generating false responses and presenting them as facts. This can be countered by limiting the scope of the AI model and giving it a specific role to avoid generating false responses.
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Using AI for conversational commerce in highly regulated industries like finance and banking calls for a deep and working knowledge of data regulation alongside industry best practices.
Businesses have an exciting yet challenging time ahead, there’s a lot of growth potential but they must take that opportunity in the right way. Conversations are the key to that future of growth through AI. Despite the challenges on the roadmap, I believe this is the best first stop.
Ivan Ostojić is the chief business officer at Infobip
