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How companies are using automation and AI to enhance customer service

The customer service and support landscape is undergoing a foundational transformation. According to Gartner, by 2028, automation, generative AI (GenAI), and a growing focus on customer value will redefine how businesses approach service and support.

Myntra customer care services
Myntra customer care services

The traditional model centered on human-to-human interaction is giving way to one driven by intelligent machines, predictive capabilities, and a reimagined service ecosystem, Brad Fager, Senior Director Analyst in the Gartner Customer Service and Support practice, said in the report.

  1. Limitless Automation Driven by Executive Pressure

One of the dominant forces reshaping customer service is executive demand for full-scale automation. Leaders across enterprises are pushing service departments to adopt AI with the expectation of reducing operational costs, enhancing scalability, and cutting headcount.

Three strategic areas of automation include:

Inbound Interaction Management: AI systems will handle most incoming service requests with minimal human intervention. Chatbots, virtual agents, and self-service portals powered by GenAI will become the first line of support.

Proactive Issue Prevention: AI will shift from reactionary support to proactive service, predicting potential issues based on customer behavior, usage data, or system anomalies. Smart products will have embedded diagnostics and automated resolution capabilities.

Operational Efficiency: Core backend processes like data validation, knowledge base generation, and records management will be increasingly automated. AI will streamline repetitive tasks, allowing human resources to focus on strategic and complex issues.

Implication: Customer service leaders must evolve from managing teams to leading AI-driven service architectures. A dual focus on automation-first thinking and talent development will be key to long-term success.

  1. Rise of AI Assistants as Customers

Consumers are embracing AI to a surprising extent. A Gartner survey found that over half (51%) of customers are open to using GenAI assistants to interact with service organizations on their behalf.

This trend introduces two major challenges:

Cost Pressures from Higher Request Volumes: AI assistants can initiate service requests with near-zero effort, which could cause a spike in volume. Traditional service operations may struggle to handle this influx cost-effectively.

Disruption of Loyalty and Customer Insight: When AI intermediates the relationship, brands lose direct contact with customers, reducing opportunities to build loyalty or capture feedback. Organizations must rethink how they personalize service and derive insights when machines are the main point of contact.

Implication: Businesses will need to recognize AI assistants both as customers and as channels. Service platforms must be redesigned to identify and effectively respond to machine-driven interactions, preserving service quality and insight.

  1. Customer Service Moves Upstream in the Journey

The increasing presence of connected devices, smart products, and subscription-based services has changed when and how customers need support. Service is no longer a reactive function — it is becoming an embedded, proactive layer throughout the customer journey.

This upstream movement manifests in several ways:

Product Usage and Adoption Focus: Service teams are becoming partners in ensuring customers derive value from products. Usage analytics and customer health scores will guide service interventions.

Revenue Enablement: By supporting onboarding, renewals, and upsells, customer service contributes directly to business growth. AI will support agents in these roles, making them enablers of revenue, not just cost centers.

Experience Orchestration: Instead of waiting for problems, customer service will proactively engage customers at critical moments—such as onboarding, feature discovery, or usage drops—to guide them toward success.

Implication: The role of customer service will shift from a problem-solving team to a strategic function aligned with product, marketing, and sales. Success will be measured in customer lifetime value, adoption rates, and experience metrics, not just resolution time or ticket count.

Future Outlook

By 2028, customer service will be transformed into a hybrid of intelligent automation and high-value human interaction. The convergence of AI leadership, customer-managed AI assistants, and integrated service across the customer lifecycle will require leaders to:

Redefine KPIs from efficiency metrics to customer value outcomes

Balance AI scalability with human empathy and judgment

Design service architecture for both human and nonhuman customers

Orchestrate experiences that anticipate and meet needs before customers articulate them

Who’s investing in AI for customer services?

Major companies across industries are making significant investments in automation and AI to enhance customer service, aiming to improve efficiency, reduce costs, and elevate customer experience. Technology giants like Amazon, Microsoft, and Google are at the forefront.

Amazon has heavily invested in AI-powered customer service through its Alexa platform and automated contact centers, using machine learning to anticipate customer needs and resolve issues with minimal human involvement.

Microsoft, through its Azure AI and Dynamics 365 suite, is helping enterprises implement intelligent virtual agents and automate customer interaction workflows.

Google Cloud’s Contact Center AI is also being adopted by companies looking to blend virtual and human agents effectively.

In the financial sector, banks like JPMorgan Chase and Bank of America are leading the way. JPMorgan uses AI to automate service inquiries and assist human agents with real-time suggestions and data insights. Bank of America’s AI assistant Erica handles millions of customer requests, offering everything from transaction tracking to budgeting advice. These systems not only streamline operations but also enable hyper-personalized engagement.

Telecom leaders such as Verizon and Vodafone are deploying AI to manage service inquiries and reduce call center loads. Verizon utilizes intelligent automation to predict and resolve network issues before customers are affected, while Vodafone has developed its own AI-based digital assistant, TOBi, which manages thousands of interactions daily.

Retailers like Walmart and Target are transforming their customer service with AI chatbots and automated return processes. Walmart’s investments in machine learning help it anticipate customer questions, manage supply chains, and optimize store-level operations. Target is leveraging AI to enhance its app’s customer support features, delivering personalized responses and proactive assistance.

In the airline and hospitality industries, Delta Air Lines and Marriott International are notable players. Delta uses AI to personalize communication, manage delays, and proactively offer solutions such as rebooking. Marriott is integrating AI into its customer service chat platforms, enabling faster and more tailored interactions with guests across multiple channels.

Healthcare providers and insurers, such as UnitedHealth Group and CVS Health, are incorporating AI into service portals to guide patients, manage claims, and schedule appointments. These systems provide automated symptom checks and customer navigation tools that significantly reduce the need for human intervention.

Collectively, these companies demonstrate how AI and automation are redefining customer service — from reactive support to proactive, predictive, and personalized engagement. The shift not only enhances customer satisfaction but also reshapes the role of service as a strategic function within modern enterprises.

In essence, customer service will evolve from a support function to a core strategic differentiator — powered by technology, informed by data, and focused on delivering exceptional value throughout the customer relationship.

Rajani Baburajan

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