TLDR: A new report by KPMG underscores the growing imperative for businesses to integrate Artificial Intelligence into customer experience strategies while preserving the ‘human touch’. While AI adoption is accelerating, customer preference for human interaction and concerns over data privacy, ethics, and emotional connection remain paramount for building lasting loyalty.
In an increasingly AI-driven landscape, businesses are grappling with the challenge of leveraging artificial intelligence to enhance customer experience without sacrificing the essential ‘human touch’. A recent report from KPMG emphasizes that brands capable of skillfully navigating this balance will be the ones to reap the greatest benefits, driving hyper-personalization, seamless interactions, and enhanced productivity in a trustworthy and ethical manner.
According to a KPMG survey of 130 business leaders from companies with at least $1 billion in revenue, nearly two-thirds (65%) reported piloting AI agents in Q1 2025, a significant increase from 37% in Q4 2024. Despite this rapid adoption, only 11% have fully deployed AI agents, indicating a cautious approach, particularly in heavily regulated sectors like healthcare and banking. The survey also revealed that 97% of these leaders reported measurable profitability, and 94% cited significant productivity gains from their Generative AI implementations.
However, customer sentiment presents a contrasting view. A Gartner survey highlighted that 64% of customers would prefer companies not to use AI in their customer service, and 53% would consider switching to a competitor if a company adopted AI for customer service. A primary concern for 60% of respondents in the Gartner study, echoed by 52% in a KPMG survey, is the fear of not being able to interact with a human. This underscores the enduring value consumers place on human interaction, especially for critical post-purchase activities like returns (56%) and product inquiries (55%), as found by EY research.
KPMG’s global report on ‘Trust in Artificial Intelligence’ further reveals that consumers expect organizations to deploy AI systems that uphold high standards for data privacy, security, and governance. The report stresses that while AI offers vast potential for efficiency and transformation, it must complement human interactions rather than replace them. Sachet, a judge at the Asian Experience Awards 2024, articulated this, stating that AI tools should be used to gain deep insights into customer needs and emotions, serving as a complement to human engagement.
In the UAE, the 2025 Customer Experience Excellence (CEE) Report by KPMG noted a 1.5% rebound in CX scores, with UAE brands outperforming international benchmarks in AI integration. This success is attributed to brands striking the right balance between automation and authentic human connection. The study found that trust, transparency, and empathy are taking center stage, with integrity surpassing personalization as the strongest driver of customer experience in the region. Companies are focusing on transparency in their offerings, from accurate product details to fair pricing and after-sales support.
Also Read:
- Deloitte Study: Consumer Trust in AI Innovators Crucial Amidst Surging Generative AI Adoption and Privacy Concerns
- Generative AI Revolutionizes Banking Across the UAE and Globally, Driving Efficiency and Innovation
Ultimately, the message from KPMG is clear: true excellence in customer experience in the AI era lies in balancing innovation with empathy, speed with trust, and intelligence with intuition. The most enduring customer relationships are built on trust, integrity, and meaningful human interaction, making a human-led, tech-driven paradigm the path to success.
