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Why AI for Customer Service Is Essential for Business Growth

Digital & Software Solutions

Last Updated: November 26, 2025

Check with any successful company out there and they will have volumes to share about the significance of extraordinary customer experience. Although attracting new clients is vital, retaining existing clients takes precedence in any business setting, be it in software and technology, travel and tourism or any other diverse vertical.

Equally, organizations are embracing innovative technology tools and Artificial Intelligence (offer effective service and experience to their clients. The ever-growing use of artificial intelligence is changing customer service by providing impeccable customer engagement and 24/7 customer support.

Why AI is transforming customer service

Artificial intelligence is no longer rocket science. Futuristic inventions are defining machines that are becoming smarter. and more intuitive. Organizations globally are discovering inventive tactics they can use through artificial intelligence to improve customer engagement and experience substantially.

Keep in mind that satisfying your customers means fewer refunds, increased sales and unmatched experiences. A seamless customer service boosts visitors and returning clients alike. It is for this reason that all businesses need to include artificial intelligence in their operations.

AI is not just a passing cloud; AI in customer service is the future! Read on to find out how you can enhance customer experience via artificial intelligence.

Real-world Examples of AI in Customer Service

When customers demand digitally enhanced support tools artificial intelligence is the answer. How does the actual AI-supported customer service work in real life? Let us know from the leading examples of AI usage in the customer service industry:

Conversational AI for Smart Suggestions and Replies to Emails

Responding to common email queries manually takes up a lot of time and is a redundant task, the time and efforts spend on which could be used to solve other intricate problems. Here is where AI comes in handy as it helps the customer department team respond to these inquiries with the click of a button.

Chatbots

When you think of artificial intelligence and customer service, you cannot disregard chatbots. The reason for this is that chatbots are amongst the first dynamic AI tools which were used to serve clients. Generally, these tools are designed in a way to be able to fast-track service by interpreting the client’s issues and offering troubleshooting steps to solve the problem.

Augmented Messaging

Although chatbots are ideal at solving minor problems, they may not have the ability to handle sensitive or complex cases. For instance, customers may get frustrated with a company’s experience if the bots fail to give them the exact answers they are looking out for.

Remember that bots can use only pre-programmed responses. Thus, it is quite tricky to solve unique or complex situations as the bots are programmed to give out generic messages. This is where augmented messaging comes in handy as it assists in identifying the instances where human support needs to come in and assist the client.

Automated Reply to Social Media Messages

Social media has made it much easier to connect with your clients. Whether a client contacts you with typical inquiries about tracking an order, delivery times or even solving a support problem, current social media channels make it convenient and effortless for consumers to get in touch with you.

The only notable challenge is that clients expect instant replies, regardless of the time and day of the week. The best news is that AI in customer service has been simplified by invention of chatbots which reply to messages instantly.

ROI and Business Impact of AI

The use of AI in your business’s customer service is a crucial decision that demands considerable investment of resources, time and money. Due to this, when a company is in the process of implementing artificial intelligence, it is always advisable to recognize when and how AI will deliver the ROI (return on investment).

There are plenty of ways in which customer service can benefit from AI implementation. In most cases, it comes down to how progressive your organization is in using the new technology and how prepared it is to adapt to its unique requirements.

Fortunately, with the ideal strategy and implementation process in place, your customer department can enjoy an exponential return on investment from AI. While a company can save costs by using artificial intelligence to automate the everyday interactions that humans can manage, it is worth noting that it’s not always the ideal solution.

For example, suppose the system lacks access to a detailed knowledge base or fails to understand the client’s problem comprehensively, it will lead to displeasure and frustration. Therefore, it is in the best interests to recognize the tasks that AI can handle and those it can’t!

Emerging Trends and the Future of AI in Customer Service

Whether business-to-customer or business-to-business, consumers expect to contact an organization and seek instant help through their preferred channel. But how will a business offer an all-round support system, while minimizing the operation costs? Well, here is where AI comes into play. As Gartner denotes, more than 80% of the customer service will be managed through AI by the end of 2020.

Artificial intelligence boosts customer service, in addition to automating some tasks that do not need human interaction. Currently, it’s not time-efficient or cost-effective to have human staff responding to the ordinary issues for the customers.

AI helps in multiple areas by offering answers to the typical customer questions throughout the day, sorts messages and prioritizes human support issues rapidly whenever necessary. It frees up the human support team to let them answer the high-value calls.

However, it is worth noting that artificial intelligence is not a total replacement for human interaction. Instead, its main objective is to lower customer frustrations.

Best Practices for Implementing AI in Customer Service

To successfully integrate AI into customer service, start by defining clear objectives—whether it’s reducing response time, improving personalization, or cutting operational costs. Invest in robust data quality and security measures, as AI systems rely heavily on accurate, well-structured data to deliver meaningful insights. Combine automation with human oversight to handle complex or sensitive queries, ensuring a seamless experience. Regularly train and update AI models to adapt to evolving customer needs and language patterns. Prioritize transparency by informing customers when they are interacting with AI and offering easy escalation to human agents. Finally, measure performance through KPIs like customer satisfaction scores, resolution time, and ROI to refine strategies continuously. A balanced approach that blends technology with empathy will maximize AI’s potential while maintaining trust and loyalty.

Conclusion

AI-based solutions for customer support are really pushing the leverage of invention and modernizing how clients get assistance. Artificial intelligence translates to top-notch customer experience, cost-saving, customized real-time support and seamless responses to issues.

In any business department, customer service is the main one where AI is substantially embraced and organizations are confident about how it will seamlessly manage the common inquiries, besides lowering the operational cost. The invention of AI systems to enhance customer gratification with dynamic experiences is anticipated to progress rapidly and deliver cutting-edge services.

Ready to Transform Your Customer Service with AI?

Partner with Hexaware, as we are one of the leading Artificial Intelligence service providers. Deliver smarter, faster, and more personalized customer experiences with our AI-driven solutions, which help you reduce costs, boost efficiency, and achieve a measurable ROI. Contact us today to start your journey toward future-ready customer engagement.

About the Author

David Stellini

David Stellini

Seasoned fintech application developer, and co-founder of AllFront, a talented UX / UI team that specializes in front-end development for fintech startups and enterprises.

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FAQs

Hexaware is a leading Artificial Intelligence service provider delivering innovative, scalable solutions that transform customer service. With expertise in AI-driven automation, personalization, and advanced analytics, we help businesses enhance customer experience, reduce costs, and achieve measurable ROI. Partner with Hexaware for future-ready, intelligent customer engagement.

Companies that adopt AI for customer service often face challenges such as high implementation costs, data quality issues, and integration with existing systems. Limited knowledge bases can lead to inaccurate responses, causing customer frustration. Balancing automation with human oversight and ensuring transparency are also critical hurdles for successful adoption.

Industries that benefit most from AI-powered customer service include retail, banking, travel, and technology. These sectors handle high volumes of customer interactions and rely on quick, personalized responses. AI helps streamline processes, reduce operational costs, and enhance customer experience, making it ideal for businesses with complex support needs.

AI improves customer satisfaction and retention by delivering faster responses, personalized interactions, and 24/7 support. It automates routine queries, reduces wait times, and ensures consistent service quality. By freeing human agents from complex issues, AI enhances overall experience, builds trust, and encourages long-term customer loyalty.

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