Generative and agentic AI set to transform customer service

Although most consumers say customer service is pivotal in shaping their perception of a brand, less than half (45%) express overall satisfaction with the service they receive. This discrepancy highlights a significant opportunity for brands to enhance their customer service and foster greater loyalty. The Capgemini Research Institute’s latest report, ’Unleashing the value of customer service: The transformative impact of Gen AI and Agentic AI ’, finds that generative AI (gen AI) and agentic AI are emerging as key tools for organizations to make a transformative shift, elevating customer service to a strategic value driver. However, whilst virtual agents are favored for their speed and convenience, consumers overwhelmingly prefer human agents for their empathy and creative problem-solving skills. This indicates that the future of customer service will require a strategic blend of human and virtual agents, enhanced by gen AI and agentic AI.

Customer service remains one of the most powerful tools for driving purchases, encouraging loyalty, and shaping brand perception. In fact, according to the report, almost 60% of consumers view customer service as extremely important in shaping their perception of a brand. However, there’s a need to overhaul the function as both consumers and customer service agents are currently dissatisfied, with only 16% of agents reporting overall satisfaction with their roles, and a majority (65%) of executives admitting low operational efficiencies.

“With over half of consumers prepared to leave a brand due to poor customer service, even if their purchase is good, business leaders now recognize that exceptional customer service is no longer a luxury but a strategic imperative,” said Franck Greverie, Chief Portfolio & Technology Officer and Group Executive Board Member at Capgemini. “Organizations are navigating multiple headwinds, including a lack of call center agent engagement, poor coordination between departments, and outdated legacy systems. Reimagining customer service with gen AI requires businesses to transform their digital solutions, operating model and data foundations; leaders who embrace this change will not only enhance customer satisfaction and operational efficiency but also unlock commercial opportunities for competitive edge in the market.”

Most organizations have implemented or are exploring gen AI and it’s already a gamechanger

According to the research, 86% of organizations have already implemented gen AI, initiated pilots, or started exploring its potential in their customer service functions. The report states that this transformative technology will be key to overcoming multiple challenges, including addressing key customer pain points, improving agent experience and enhancing operational inefficiencies.

Notably, most consumers place a high priority on effective and speedy issue resolution, yet a significant number feel they do not regularly receive it. Prompt responses are also important but often lacking. Among the organizations using gen AI, almost 9 in 10 are either already seeing improved first contact resolution rates or expecting to see this benefit in the future. Similarly, most (89%) are seeing or expecting faster response times, as well as benefiting from or expecting higher agent productivity (85%), and similar proportions are experiencing or anticipating reduced operating costs.

Together, human and virtual agents could provide a seamless blend of empathy and efficiency

According to the report, most consumers (71%) feel that chatbots have improved in quality over the past 1–2 years. With the rapid acceleration of gen AI, there are notable advancements in understanding context, human emotion, and responding with empathy.

Whilst chatbots are valued for speed and convenience, over 70% of consumers prefer human agents for empathy and creative problem-solving. However, this preference varies by age, with younger consumers showing greater inclination towards chatbots and older consumers preferring human agents. Consequently, the traditional customer service function is expected to evolve into a CX center, operated by hybrid teams of human and AI agents.

Less than half of organizations are fully prepared for AI-powered customer service

Despite its strategic importance, only 49% of organizations consider themselves prepared for offering AI/gen AI-powered customer service, indicating the need for a critical shift in operating model, transformation of digital solutions and uplift of their data foundation. Without these building blocks in place, organizations could fail to fully leverage AI as a key transformation lever concludes the report.