AI is disrupting the customer service industry – and Canadian companies are leading the way

Since the launch of ChatGPT this past autumn, Andrew O’Brien has spent a lot of time talking with customers about the disruptive potential of artificial intelligence (AI).

As president and CEO of Halifax-based call centre and customer service outsource provider Blue Ocean, he says there’s a general feeling in the customer service world that the technology will dramatically change things, but little certainty regarding how or when.

“Clients are saying, ‘I have more to ask you about, because I’m hearing more about it,’” he says. “[They’re saying,] ‘I don’t even know what I’m asking for.’ ‘I don’t even know if I want it.’”

Mr. O’Brien says that he, like many in the industry, have been utilizing “chatbots” and other early AI-based tools for years.

Recent advances, however – like OpenAI’s GPT-3 technology, which powers ChatGPT – have dramatically changed expectations of conversational capabilities of AI, and renewed interest in the field. Of all the business functions that can be improved with this latest wave of AI innovation, customer service is a primary target.

“Everybody was familiar with numbers, and that machines could do these complex things with numbers – whether through a calculator or a spreadsheet – but we thought of language as being the domain of humans; something machines couldn’t process in a meaningful way,” said Ajay Agrawal, professor of strategic management for the Rotman School of Management and founder of the Creative Destruction Lab, a non-profit mentoring program for early-stage technology companies.

Mr. Agrawal says these AI tools are particularly good at predicting user intent, which has far-reaching implications for the customer service industry.

For example, if a significant share of a business’s customer service interactions is regarding password and account challenges, they could save a significant sum by automating that process.

“[The AI] just classifies whether this person is having a password reset problem or not. If it’s ‘yes,’ we send them through this automated process, if it’s ‘no’ we send them over to a human,” he said. “Once you get that one right, you go to the second most common thing and work your way down.”

Eventually, Mr. Agrawal says, only the most unique and challenging customer service problems are left for human operators. He likens the technology to an ATM machine, explaining that customers can still see a bank teller, but most prefer getting cash from the machine.

He adds that Canada has played an outsized role in the development of AI technology, especially when it comes to research and innovation. For example, “deep learning” – a precursor to today’s AI – was pioneered by University of Toronto professor Geoffrey Hinton, and the field has been bolstered domestically by early and ongoing federal funding. Though the country may be not be the home base for some of the global enterprises at the forefront of commercializing it – like Microsoft, Meta and Google – Canada is doing reasonably well nurturing AI startups.

As the founder of one of those startups, Mike Murchison believes Canada is well on its way to becoming a global leader in AI innovation, especially within the customer service sector. His startup, Ada, has a valuation of $1.2 billion and its AI-powered customer service tools are already used by some of the world’s biggest technology brands, including Meta, Square Space, Shopify and Peloton. Today, most of these brands’ global customer service interactions begin with – and are often resolved by – Ada’s AI-powered chatbots.

“I believe this entire landscape is going to be disrupted by Canadian technology companies,” Mr. Murchison says. “We’re in a very special position in Canada for a few reasons, and in the eyes of history I think we’ll look back and say, ‘of course it happened in Canada.’”

Those reasons, according to Mr. Murchison, include the country’s diversity, which makes it an ideal place for developing customer service solutions that can be deployed globally; its immigration policies, which make it easy for startups to attract the best and brightest from around the world; and its leadership in AI research.

“The core knowledge and ideas are coming out of Canadian institutions,” he says. “It’s nice for a Canadian company to actually commercialize things that smart Canadian people created.”

Mr. Murchison adds that neither customers nor businesses are satisfied with the current state of the global customer service industry – which is expected to reach a value of nearly $500 billion by 2027 – adding that AI has the potential to improve both customer experiences and business outcomes. He explains that feeding these tools significant volumes of customer and company data and empowering them to solve customer service needs without human intervention will save time and frustration, thus improving their brand reputation.

“I really do feel that’s fundamentally inevitable; it’s a question of ‘when’ not ‘if,’ and it’s a question of ‘who are the players that are going to power it?’” he says.

“The way I think about this is Canadian AI is the new maple syrup; brands around the world will purchase this product – it will have a Canadian flag on it – and they will think of Canada.”