- Affirm is investing heavily in AI-powered chatbots to address Gen Z's phone aversion.
- According to Gartner, 20-30% of customer service agents are expected to be replaced by AI chatbots by 2026.
- Despite the potential savings and efficiencies of AI customer service, adoption is limited.
Gen Z hates talking on the phone, so companies like Affirm, the $9.7 billion buy-now-pay-later payments giant, are betting big on AI-powered chatbots.
Affirm CEO Max Levchin said during an earnings call Wednesday that customers who don't like voice can resolve their issues online thanks to bots.
“We've invested quite a bit in the idea that Gen Z consumers love chatting more than calling, and there's nothing wrong with chatting with Gen Zers, especially if Gen Zers are intelligent. “, Levchin said.
Affirm uses chatbots to resolve quick questions, such as policy questions, and then real humans take over more complex cases, Levchin said. The PayPal alum said chatbots are helping Affirm scale its customer service team.
Affirm built and tested an AI-based assistant last quarter. In his letter to shareholders, Levchin said less than 40% of users needed to speak to a human after using the bot.
“This is not a short-term cost reduction because no one has yet lost their job in a company to be replaced by a robot,” Levchin said on a conference call Wednesday, adding that AI will continue to grow over the next one to three years. He added that this could potentially save the company money.
Tech research firm Gartner predicted last year that 20% to 30% of customer service representatives will be replaced by AI by 2026.
This nascent technology is already having a significant impact on some companies' bottom lines.
Deb Kapp, president of Microsoft Americas, said during a panel discussion at Davos in January that the software giant has saved $100 million in customer service operations by implementing AI. Microsoft also sells his AI-powered customer service technology.
Mihir Shukla, CEO of Automation Anywhere, said at Davos that since implementing AI, the company has reduced customer service costs by 40% while seeing improved performance.
However, AI customer service is not a panacea for all businesses. In December, a car dealership's customer service AI was tricked into being hacked, and in January, a UK postal service bot was used to abuse customers.
Also, AI bots are not yet widely available. According to a survey conducted by Gartner from December 2022 to February 2023, only 8% of customers said they used a chatbot for recent customer service. Only a quarter of people who used a chatbot said they would use the bot again in the next period. future.
