Generative AI – Is It a Boon or a Bane in Customer Service?

A giant outdoor and clothing retailer, is being sued for its usage of third-party AI-powered software that listens, records, and analyses conversations.

Plaintiffs have alleged that the retailer is violating California privacy laws by tapping, recording, and analyzing conversations without the knowledge or consent of their customers.

The lawsuit claims that the AI software includes omnichannel capabilities – phone calls, texts, and other channels.

The software transcribes all customer conversations, processes customers’ speech and text patterns, and analyses the data to gauge their intent and sentiment.

Pretty clean – only here, the plaintiffs have alleged that they are doing it without the consent of the customers.

The software vendor helps the retailer understand the emotional state of its customers, and by analyzing the calls in real time, it suggests relevant responses to its agents in chats, emails, calls, and texts based on customer communication. It also keeps track of the interaction history.

Aren’t these common things in customer service?

I’d certainly say that this would enhance the customer experience. However, the allegation here is not what it does or how it does, but doing them without consent and not giving the customers an option to leave the conversation.

Besides, the conversations that customers have with the retailer are stored in the AI vendor servers, and you don’t know what use they put these conversations into.

The lawsuit further alleges that the privacy notice on the retailer’s site is a mere placeholder. It does not require the customer’s consent. As a customer, you are free to review it and see how your data is being used. However, they don’t mention the use of third-party software as a part of the privacy notice.

The plaintiffs in the lawsuit state they know their conversations are financially valuable to the retailer – not just personal and financial data but also verbal and acoustic information is a form of currency. Companies view such information as a corporate asset and have invested heavily in generative AI software that allows them to do it.

Customer Service and Artificial Intelligence (AI)!

Aren’t contact centers the popular use cases of using generative AI?

They are, and it helps them provide the best possible customer experience.

The potential of AI is limitless in customer experience functions, and customers would be happy to get personalized recommendations.

With AI, customers would have a happy world.

However, it has to be used with caution, and you should adhere to the data protection laws. With lawsuits like the one against the retailer, the momentum behind using AI is going to slow down.

How to Protect Against Lawsuits When Using Generative AI in Customer Experience?

Consent and Data Collection

1. Do you seek explicit consent from customers before recording or analyzing their calls?
2. Do you provide an option for your customers to opt out during the consent stage?
3. Do you inform your customers about the usage of third-party AI software as a part of recording and analyzing interactions?
4. Do you state how your customer’s data will be used and the objectives of the analysis you do?
5. Do you only collect the data required for the intended analysis and nothing more?
6. Do you let your customers know how long the data will be stored on your servers or third-party servers?
7. Do you restrict access to the data to only those personnel and systems that require them for legitimate business needs?

Compliance with Privacy Laws

1. Do you ensure adherence to the General Data Protection Regulation (GDPR) in the EU, the California Consumer Privacy Act (CCPA) in the US, and other relevant local privacy laws? For instance, some countries may expect you to store their customer data within servers located physically in their geography.
2. Do you ensure that your third-party AI software vendor complies with all the relevant privacy and data protection laws?
3. Do you conduct due diligence and regular audits of third-party vendors to verify their compliance?

Data Security

1. Have you implemented security measures to protect the recordings and analysis results from unauthorized access and breaches?
2. Do you regularly audit and update security protocols to address emerging threats?
3. Do you train employees on data protection principles and make them understand the importance of privacy and data security in handling customer information?

Following this would help provide the customers with confidence that their privacy and data are protected and are not being used as a transactional asset.

Generative AI is here to say, and the possibilities it offers are limitless. By being cognizant of privacy and data protection laws, AI can become an invaluable force in helping both businesses and customers gain a lot of mutually beneficial value.

Wouldn’t you love these AI use cases? 

1. It can summarize calls to save agents time and boost their productivity
2. Transcribe and analyze calls to help with agent training and development
3. Direct customers to digital and self-service channels to reduce the load on agents

After all, the call center AI market is pegged at $1.95 billion. It is expected to grow at an average of 22.7% a year and will cross $10 billion by 2032.