Affirm is making substantial investments in AI-powered chatbots to meet the needs of Generation Z, who are averse to using phones for communication. According to Gartner, AI chatbots are projected to replace a significant portion, around 20-30%, of customer service agents by the year 2026. Despite the potential cost savings and operational efficiency, the adoption of AI customer service solutions has been relatively limited.
Gen Z's Preference for Chatting Over Calling
Gen Z strongly dislikes engaging in phone conversations, leading companies like Affirm, a $9.7 billion buy-now, pay-later leader, to place substantial bets on AI-powered chatbots. During an earnings call, Affirm's CEO Max Levchin highlighted that these chatbots enable customers who prefer not to use voice calls to address their issues online.
Chatbots Enhancing Customer Service Efficiency
Affirm's strategy involves utilizing chatbots for handling quick queries such as policy-related questions, with human representatives stepping in for more complex scenarios. Levchin, a former executive at PayPal, emphasized that chatbots play a crucial role in enabling Affirm to efficiently expand its customer service capabilities.
Impact of AI on Customer Service Operations
Through the implementation of an AI-based assistant, Affirm observed that less than 40% of users required human intervention post-interaction with the bot. While acknowledging that AI adoption does not lead to immediate cost savings in terms of workforce reduction, Levchin expressed confidence in the potential long-term financial benefits that AI could deliver for the company.
Industry-Wide Adoption and Challenges
Gartner's forecast indicates that AI is poised to replace a significant portion of customer service agents by 2026. Some companies have already witnessed substantial cost savings and performance improvements through AI integration. However, challenges persist, as highlighted by instances of AI manipulation and limited adoption rates among customers.
Despite the promise of AI in revolutionizing customer service operations, there are notable hurdles to overcome, including issues related to trust, reliability, and user experience. The journey towards leveraging AI for enhanced customer service experiences continues to evolve, with companies like Affirm at the forefront of innovation in catering to the evolving preferences of Gen Z consumers.
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By: insider@insider.com (Meghan Morris)
Title: Affirm Bets on AI Chatbots to Serve Gen Z’s Phone Aversion
Sourced From: www.businessinsider.com/gen-z-prefers-ai-chatbots-phone-calls-affirm-ceo-bnpl-2024-5
Published Date: Thu, 09 May 2024 08:46:13 +0000
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