AI Wants Your Data, But Can You Trust It?

Hong Kong's buzzing AI scene got a reality check recently. Twilio's fresh State of Customer Engagement Report tells a tale of cool tools, hungry algorithms, and a disconnect between how businesses think they're doing and what consumers really want.

Seems everyone's in on the AI game to make things oh-so-personal for customers. The problem? Customers aren't feeling the love, and they worry about what happens to their data.

"Customers today expect personalized experiences and want to understand how businesses use their data to shape those experiences," warns Kathryn Murphy, senior vice president of product at Twilio.

“It’s imperative for brands to be clear about how they use AI, ensuring that they balance how they deploy it with equally robust measures to protect customer privacy. Transparency is not optional—it’s a critical component of building and maintaining customer trust and loyalty.”

Hong Kong: Where AI meets loyalty (and big data)

Hong Kong's consumer market offers a unique twist to the AI personalization tale. Customers here are fiercely loyal (24% claim to be "extremely loyal" to their go-to brands). If AI can level up their customer experiences, 87% of Hong Kong consumers say they'd spend more. But that's a big IF.

The wrinkle? 78% of Hong Kong brands rely on third-party data to better understand their customers. This ranks highest among all the global markets surveyed by Twilio. As we phase out cookies, this heavy reliance on external agencies could leave brands lagging behind when building personalized experiences driven by their first-party data.

The transparency paradox

Here's where things get interesting: the vast majority (91%) of brands think they're being open and honest about how they use your data in AI, but less than half (48%) of consumers believe them.

This lack of transparency isn't lost on consumers. 60% say the best way for brands to earn their trust is to guard their data well, like a digital fortress. When it comes to AI and data collection, honesty is very much the best policy.

Getting personal pays

Twilio's findings underscore a simple truth: good personalization pays off—literally. Consumers globally indicated they're willing to spend 54% more with those brands that nail tailored recommendations and seamless experiences. Almost half of Hong Kong consumers echoed this sentiment, saying AI-powered personalization could drive them to make repeat purchases.

On the flip side, get it wrong, and they'll ghost you faster than a bad Tinder date. 85% of Hong Kong consumers claim they'd ditch a brand over an impersonal experience.

The pressure ramps up even higher when dealing with younger customers. Nearly 70% of Gen Z and Millennial consumers will boycott brands that don't personalize the experience according to their preferred channels and in real-time.

The takeaway: We need an AI equilibrium

AI can power incredible customer experiences but needs massive amounts of data to fuel its machine-learning magic.

The business dilemma is classic: How do you balance personalization with respecting user privacy and maintaining that oh-so-important trust?

Finding this equilibrium will be the key to reaping AI's rewards in a way that benefits consumers and strengthens the brand-customer relationship. 

Image credit: iStockphoto/Vadym Pastukh