Tech And AI: The Problem And Solution to CX Frustrations

Customer service is undergoing a transformation driven by rapid technological advancements and evolving consumer expectations.

The convergence of AI, machine learning (ML) and data analytics is reshaping how businesses interact with their customers, promising more efficient, personalised and satisfying experiences.

In recent years, consumers have reported increasing frustration with traditional customer service models, citing long wait times, repetitive interactions and a lack of personalisation as major pain points.

However, a study by Pegasystems and YouGov across 4,000 consumers from North America and the UK on their views around how businesses prioritise their technological investments in customer experience, found that despite new technologies offering solutions to these challenges, respondents believe interacting with businesses is more difficult now than ever. 

Deteriorating service quality despite technological advancements

More than half of the respondents (56%) reported in the study that interacting with businesses is more difficult now than it was a decade ago, despite advancements in technology such as Gen AI.

This suggests that many companies are failing to leverage new technologies effectively to improve customer service.

Additionally, over a quarter (26%) of respondents strongly agreed that customer interactions have worsened over the past ten years – and this decline in service quality comes at a time when technological innovations should theoretically be enhancing customer experiences.

Long wait times and siloed systems plague customer service operations

Pegasystems and YouGov highlight several key pain points in customer service.

Two-thirds (63%) of respondents cited long wait times as their top concern, half (51%) were frustrated by having to repeat information to multiple representatives and 40% noted that customer service agents often lacked necessary information.

These issues point to a broader problem of siloed systems that impede efficient information flow within organisations.
Customer service agents also appear to be hampered by outdated technology that prevents them from accessing the information they need to provide effective service.

Don Schuerman, Chief Technology Officer at Pegasystems, says: "Businesses have to start taking the amount of technical debt they are managing seriously and examine ways they can use new innovations such as Gen AI to make the existing systems they have in place work better for everyone.”

Technical debt hampering innovation and customer satisfaction

A separate global survey by Protiviti found that nearly 70% of C-level business leaders identified technical debt (meaning the cost of managing and maintaining outdated, disconnected systems), as a significant barrier to innovation and modernisation. 

This aligns with the consumer perception that legacy systems are impacting service quality, whilst the cost of managing technical debt is estimated at US$2.41tn annually in the US alone.

Website and app disruptions further frustrate consumers

The study also revealed issues with digital channels.

Almost one-third (29%) of respondents reported that customer service agents often inform them of system downtime or slow performance.

Similarly, 28% of consumers experienced slow loading times, crashes or other performance issues when using business websites or apps.

These findings suggest that the strain on outdated systems is not only affecting internal operations but also directly impacting the customer experience across digital touchpoints.

Customer experience issues lead to brand switching and negative word-of-mouth

Pegasystems and YouGov also revealed the consequences of poor customer experiences, as half of the respondents (48%) said they share examples of poor customer service with friends, family and colleagues as a warning.

Furthermore, over one-third (37%) reported switching to companies that better meet their needs after unsatisfactory experience, highlighting the potential long-term impact of poor customer experiences on brand reputation and customer retention.

In an increasingly competitive market, businesses that fail to address these issues risk losing customers to more customer-centric competitors.

The role of Gen AI in addressing customer service challenges

Despite all these challenges, the research suggests that Gen AI and other innovative technologies could play a crucial role in modernising legacy systems and improving customer service operations.

By leveraging these tools, businesses may be able to bridge the gap between customer expectations and current service levels.

Don emphasises the potential of emerging technologies to address these challenges: "In an age where customers are more demanding than ever, many of their needs are not being met as a direct result of organisations carrying technical debt.

“Tools like Pega GenAI Blueprint can jumpstart transformation projects and enable organisations to rethink and replace inefficient, siloed systems and applications that are not only causing internal problems, but significant external damage to customer experience – and as a result, brand reputation too.”

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