Customer expectations and AI-based decision making

Hardly a day goes by without each of us being subjected to automated decisions. 

Some decisions are mundane and have no real consequences: a vending machine decides whether you inserted a valid coin and whether to dispense the crisps you asked for; a traffic signal detects your car, decides it’s your turn to go, and turns the light green.

Other automated decisions can have significant consequences, controlling your access to employment, banking, or government services.

Automation can be convenient for consumers and profitable for businesses. But as increasingly serious issues are decided automatically, fault lines emerge between fairness and efficiency.  

Perhaps this is best illustrated by the gulf between consumer and business attitudes on artificial intelligence (AI) revealed by Cisco’s 2023 Data Privacy Benchmark Study.

96% of the companies Cisco surveyed thought their AI processes already met the standards their customers expect. Meanwhile, a whopping 92% of customers disagreed, saying companies needed to do more.

Cisco examined how companies could best reassure customers about AI-based decisions. It asked customers which of a list of six measures they would like to see. Then it asked businesses which of those same measures they had already put in place, and which they thought would be most effective in reassuring customers.

The most popular choice among customers was having the opportunity to opt out of AI-based decisions. However, opt-outs were the least chosen by companies: only about one in five offered it or even considered them an effective measure. Remarkably (but perhaps not surprisingly), companies ordered the six options almost in complete reverse to how customers ordered them.

As a result, while the business community is working harder than ever on privacy compliance, the approach diverges sharply from what customers expect. Arguably it’s not a customer-focused approach at all. (Read more about how company priorities diverge from customer expectations here.)

A matter of respect

Cisco’s Vice President and Chief Privacy Officer, Harvey Jang, puts it best: “When it comes to earning and building trust, compliance is not enough.” 

In Cisco’s 2022 Consumer Privacy Survey, 81% of respondents thought the way businesses treat customers’ personal data is a question of respect. 76% said they would stop buying from a company altogether if they did not trust them with their data. 

AI and automated decisions are here to stay, but the impact on the customer experience can be serious. Adopting a Privacy by Design approach throughout your organisation lets you enjoy the benefits of AI and improve customer trust at the same time.