The AI Revolution in Customer Service

Artificial intelligence has promised to transform customer service by slashing call times, boosting loyalty, and even reading customer emotions. But for companies, the bottom line is all about return on investment (ROI).

Klarna's $15 billion IPO highlighted how the Swedish buy-now-pay-later firm is integrating AI into its core operations. Back in 2023, CEO Sebastian Siemiatkowski suggested AI could replace large parts of the customer-service workforce, sparking pushback from employees and skepticism from customers who doubted the technology's ability to provide empathy and reliability at scale.

Pivoting and Learning

Klarna's initial AI adoption proved too rigid, with customers finding the experience inconsistent. The company has since pivoted to a blended approach: AI for speed and scale, and humans for empathy and trust. This adjustment reflects a broader industry lesson: AI works best when it augments, rather than replaces, human agents.

Klarna is now hiring again to ensure customers always have the option to speak to a person. "From a brand perspective, it's critical that you are clear to your customer that there will always be a human if you want," Siemiatkowski told Bloomberg News.

Vinod Muthukrishnan, VP and COO of Webex Customer Experience Solutions at Cisco, noted that many financial institutions are moving past pilots into deployment. "These firms are increasingly leveraging AI for hyper-personalized CX, such as personal financial advice or dynamic credit limit adjustments, enabled via real-time analytics," he said. Retailers and service providers can seize similar opportunities by aligning strategy with measurable ROI.

Five Key Areas for AI in Customer Care

1. Proactive Issue Resolution

AI can anticipate problems before customers complain, flagging issues like declined payments, unexpected fees, or delivery delays in real time. This turns frustration into loyalty. Most firms still operate reactively due to siloed data across payments, logistics, and support; closing these gaps could sharply reduce call volumes.

2. Hyper-Personalized Support

Consumers expect service that reflects their history and preferences. AI can tailor repayment options, loyalty incentives, or offers based on real-time data. For example, Walmart has deployed AI-powered personalization tools to refine its app and eCommerce experience. Predictive analytics can also flag anomalies suggesting fraud or disputes, reducing chargebacks. Yet, many retailers still rely on generic scripts.

3. Multilingual, 24/7 Coverage

Global commerce doesn't keep office hours. AI chatbots and voice systems provide round-the-clock, multilingual support. New multimodal systems handle voice, text, and images, creating richer interactions. Customers value this always-on flexibility, but many firms still depend on nine-to-five call centers or outsourced night shifts.

4. Sentiment Detection and Emotional Intelligence

Speed matters, but empathy builds loyalty. AI can read tone and phrasing in real time, alerting human agents when a customer is upset. This hybrid model ensures efficiency without sacrificing trust. Rezolve's Brain Suite applies empathy-driven AI to reduce cart abandonment, which accounts for nearly 70% of lost online sales. However, sentiment detection remains rare in many call centers.

5. Insights Beyond the Call Center

Complaints can expose flaws in checkout flows, packaging, or design. AI analyzes these patterns, turning customer service into a source of business intelligence. For instance, Google's Vision Match tools feed insights from shopping behavior back into product strategy. Few enterprises close this loop effectively.

ROI as the Deciding Factor

For executives, ROI is the ultimate test. Projects that fail to deliver lower handle times, better satisfaction scores, or reduced churn rarely scale. "AI, like any new technology, risks adoption without clear strategic alignment," Muthukrishnan warned. "Too many pilots can lead to fragmented focus."

Todd Fisher, CEO of CallTrackingMetrics, shared that in a recent survey, 72% of respondents rated Webex AI Agent as equal or better than a human agent. Customers reported an 85% reduction in agent call escalations, a 22% reduction in average handle time, and a 39% increase in CSAT scores.