AI Customer Service: Today’s Most Transformative Technologies

Andrew Mort

AI in Customer Service

Artificial intelligence (AI) — the science that deals with the creation of human-like learning and reasoning capabilities — has been catapulted into the spotlight in recent years. It seems like every company in every industry wants to harness the power of AI to enhance operations and positively impact the lives of their customers. Applications based on AI are already visible in healthcare diagnostics, transportation, entertainment and education, to name but a few, and now the customer service industry in particular has recognized AI technologies as having almost unlimited potential to meet consumers’ growing demand for better customer experience (CX), reduce costs and decrease reliance on contact center agents. A Tata Consultancy Services survey found that 31.7% of major companies around the world are currently using AI customer service technologies, the second most common use of AI after IT.

This realization has seen investments in AI rapidly increasing. The two fields attracting the most AI investment last year were automated AI-powered customer service agents, which raised $4.5 billion, and sales process recommendation and automation, which attracted $2.7 billion. According to IDC, “AI is the game changer in a highly competitive environment, especially across customer-facing industries such as retail and finance, where AI has the power to push customer experience to the next level with virtual assistants, product recommendations, or visual searches.”

Forward-thinking companies are increasingly turning to AI-powered customer service solutions to optimize CX and to streamline their back-office operations. In this article, we take a deep dive into the different AI customer service technologies that companies are employing to improve their customer-facing interactions, as well as to enhance their internal processes. As the technology matures, many companies will inevitably look for holistic AI solutions that unify customer and operational data to achieve the most valuable and actionable insights.

Customer-facing AI technologies

AI customer service technologies have given rise to a wide range of customer-facing platforms, all of which help companies provide a level of service beyond human capacity. In fact, Gartner predicts that by 2020, 85% of all customer interactions will no longer be managed by humans. Customer-facing AI technologies are especially relevant to assisting in customer identification, call classification/routing, chatbots and predictive personalization.

Customer Identification


Biometrics refers to body measurements and calculations for the purpose of authentication, identification and access control. Physical biometric solutions analyze parts of the human body, such as a person’s face, iris or fingerprints, while behavioral biometric solutions analyze other characteristics, such as gait, voice, or interaction with a device. The field is becoming increasingly mainstream with a 2017 Tractica report predicting that biometric hardware and software revenue will grow to $15.1 billion worldwide by 2025, with a CAGR of 22.9 percent.

Face and voice recognition

Facial recognition identifies and verifies an individual by comparing facial features from a digital image or video to a face database. For example, an AI-based algorithm may analyze the distance between the eyes, the shape of the jaw or the width of the nose, and then use the data to find a match in a database. Voice recognition, meanwhile, digitizes words and encodes them with data such as pitch, cadence and tone, and then forms a unique voiceprint related to an individual. This voiceprint can then be used to identify and authenticate the speaker.

AI continues to make significant improvements to machines’ biometric recognition capabilities, especially when it comes to challenging lighting conditions, angles, and backgrounds. Using biometrics, agents can recognize customers, and greet them in a personal manner. Companies can use biometrics to verify warranties, ensuring that customers receive service for their devices without requiring them to save receipts or warranty documentation. Agents representing financial institutions or insurance companies can use biometrics to quickly authenticate customers while minimizing the risk of fraud. As biometrics become more reliable and cost-effective, more companies can be expected to take advantage of their benefits.

Call Classification / routing

Intent prediction

Intent prediction refers to the science behind figuring out the customer’s next-step requirements. Customers signals — such as clicks, views and purchases — are translated into predictions that deliver value-added personalization before customers even request it. Predictive solutions combine customer data with AI to determine intent and select the right next step to deliver the relevant customer support. For example, the technology can identify patterns that indicate a customer’s intent based on web activity or text and route the call or chat to the appropriate agent. Intent prediction enables call centers to up their game by giving customers the assistance they need in the way they want it.

Emotion analytics

Emotion analytics analyzes an individual’s verbal and non-verbal communication in order to understand their mood or attitude. For example, if someone is smiling and nodding their head, they are probably happy, whereas if someone’s eyes are wide and mouth is hanging open, they are probably shocked. Emotion analytics can be used to classify a customer’s mood with the right priority and route it to the right agent. For example, an angry customer might be routed to the customer retention team, and a happy, satisfied customer might be routed to the sales team to be pitched a new product or service. Emotion analytics produces data that can then be used to understand a customer’s experience with a product, new packaging or interaction with a representative of the company, as well as to uncover any weak links that cause negative customer reactions.


Conversational AI customer service platforms — known as virtual assistants or chatbots — represent a promising technology that is already projected to cut business expenses by as much as $8 billion in the less than five years. This is likely one reason why Oracle found that 80% of sales and marketing leaders say they currently use or plan to deploy chatbots in the near future. Major enterprises such as Apple, Microsoft, Facebook, Disney and Google are all actively engaged in the race to build virtual assistants and chatbots that can respond to customer queries and scale the delivery of quality AI-powered customer service. Customer service has clearly benefited from bots as these virtual assistants can store endless amounts of data, predict customer behavior and access relevant information in real time. Today, humans and AI-based bots can collaborate to maximize interactions with customers. Collaboration can be applied in two primary ways: for the augmentation of human intelligence and the enhancement of human capacity.

Text/NLP analysis

Natural Language Processing (NLP) refers to the application of computation techniques to language used in the natural form — written text or speech — to derive analytical insights. For example, a company can employ NLP to determine whether the writer’s perception of a specific topic is positive, negative or neutral. This type of sentiment analysis has become a key tool for making sense of the multitudes of opinions expressed every day in texts on review sites, forums, blogs, and social media. This type of analysis also allows companies to extract product suggestions and complaints from online product reviews in order to proactively address any issues. These technologies enable companies to gain insights on a micro level — by understanding the emotions of each customer — as well as on a macro level, by keeping their finger on the pulse of their customer base’s opinions.

Predictive personalization

Organizations now have access to huge amounts of data about their customers that can be used to provide personalized service and recommendations to targeted consumers. Sprint uses an AI-powered customer service algorithm to identify customers at risk of churn and proactively provide personalized retention offers, a practice that has dramatically improved its retention rate. Netflix’s AI-powered customer service algorithm uses data such as demographics, viewing history, and personal preferences to predict what the user would like to watch next, with a level of accuracy that saves the company $1 billion a year in terms of customer retention.

The technology can also be used to predict technical and maintenance issues before they develop. UPS reports that it has already saved millions of dollars by implementing an AI predictive maintenance solution that reduces delivery truck breakdowns. ThyssenKrupp claims that its predictive maintenance solution has dramatically increased elevator availability by employing real-time diagnostics that reduce out-of-service time. Meanwhile, Cisco uses predictive maintenance to optimize network performance and troubleshoot issues faster.

Behind-the-scenes technologies

AI technologies have come a long way toward optimizing back-end customer service processes, ensuring companies are as efficient and cost-effective as possible. Utilizing robotic process automation (RPA) in contact centers has been proven to reduce costs and increase operational efficiencies. Back office AI customer service technologies are especially relevant to assisting in workload management, agent productivity and high-level data analysis of contact center performance.

Contact Center workload management

Computer vision AI for object/issue recognition

Computer vision AI technologies involve the processing and analysis of digital images and videos to automatically understand their meaning and context. Their accuracy for object recognition enables the machine to identify an object within an image, classify and distinguish it from other objects, and identify parts within the object. Computer vision AI customer service technologies can reduce the workload of contact center agents either through assisted service mode — to route visual customer enquiries, interpret them and assist the agent with visual decision support tools — or in self-service mode, where customers visually interact with visual assistants that visually guide them to self-resolution, thereby alleviating pressure on human agents.

Agent decision support

The same computer vision AI technology that interconnects humans with technology to provide superior CX can also be utilized to reduce contact center agent workload through better agent decision-making and company-wide knowledge sharing through the creation of dynamic visual knowledge bases. The agent and machine collaborate during the agent-customer interaction, with the agent’s performance enhanced by the computer’s ability to provide real-time resolution suggestions. This model is especially effective when the contact center is required to handle large call volumes or highly complex episodes.

Agent motivation and productivity

Research shows that disengaged employees cost U.S. companies up to $550 billion a year. With advanced AI technologies, such as computer vision and augmented reality, agents can work faster and more efficiently. These tools include call prioritization, customer identification, recommendation engines and smart agent monitoring and training. Providing agents with AI-powered customer service tools and solutions to extend their abilities, enabling them to gain mastery and provide better service, is an effective way to improve job satisfaction and reduce attrition. Empowering agents with top-notch solutions and encouraging them to perform better using these tools raises their sense of self-worth and increases the pride they feel in their work. When agents are empowered, they become invested in every customer interaction. The results are reflected positively in the agent’s KPIs, further motivating them to use these innovative tools to succeed.

Agent training

Contact center decision makers understand that better tools are the key to reducing contact center training times. Contact Center Pipeline reports that increasing the focus on coaching and development for agents is a top priority for contact centers worldwide. AI-based training tools such as gamification, visual assistance and self-monitoring, cut down on agent onboarding time and ensure agents are fully engaged from day one. Another solution, Virtual Employee Assistants (VEAs) — or digital buddies — have been tapped as an effective solution to help contact centers support their agents with on-demand learning, foster intra-company communication and assist with other administrative tasks. Gartner predicts that by 2021, 25% of digital workers will use a VEA on a daily basis, up from less than 2% in 2019.


When gamification is introduced into a call center environment, agents compete to complete objectives and outpace other agents in specific KPIs such as hours worked, lessons learned or average speed to answer. Gamification can be an immersive, exciting experience that engages and motivates agents. Rewards may include recognition on leaderboards, physical prizes or alternative rewards like preferred shifts or free parking. Success lies in full transparency and comprehensive reporting that ensures a fair competition, which can be based on any activity tracked by the platform, such as resolved cases, average handle times, or timesheet submissions.

High-level data analysis

Process improvements

Inefficient processes cost organizations as much as 20 to 30 percent of their revenue each year. As companies scale their customer care operations or respond to new marketplace realities, changes to their processes are inevitable and necessary. Rather than relying on instinct or team decisions, process improvements should be factually substantiated based on data analytics. AI helps companies harness their data to make useful decisions about process changes that will drive the organization forward.

CLV optimization

Customer Lifetime Value (CLV) is a measurement that tracks how valuable a customer is to a company over an unlimited time span. CLV is based on the premise that retaining existing customers delivers a higher return on investment than acquiring new ones. Studies have found that the likelihood of selling to a first-time customer is 5–20%, whereas for an existing customer the probability is 60–70%. Using high- level AI-driven data analysis to pinpoint where in their lifecycle customers are churning or to identify target customers for loyalty promotions helps to optimize CLV. Understanding CLV gives companies the data they need to continuously improve or to pinpoint areas of excellence; it is a number that should be top of mind for every contact center agent fielding calls from customers.

Business insights

Companies are increasingly adopting AI to identify trends and gain insights into the huge volumes of data they hold in order to aid decision-making. AI-driven holistic solutions are being utilized to automate business intelligence and analytics processes based on transactional data found in their databases. By detecting changes and patterns, companies can use the resulting insights for a wide range of business applications, such as new service requirements, location-based trends or new product development.

Where it’s all heading

The tremendous impact technologies have had on AI customer service — both for customer-facing and back office applications — has already been felt by companies across multiple industries. It is a space where new and improved AI applications are being deployed at a rapid rate to provide omni-channel experiences for both customers and agents.

In the insurance industry, for example, leading companies are now using AI to power every aspect of the policyholder experience and the claims process. Companies use facial recognition to identify customers and computer vision AI to compare images of damage with photos of objects already in their systems to calculate the cost, while gauging the urgency of the scenario in order to process the claim as quickly as possible.

Today, AI is at the epicenter of technological convergence across multiple sectors brining together disparate technologies to create a seamless union of customer-facing and behind-the-scenes AI-driven systems.

This article was first published on the TechSee blog.

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