When a course correction is needed on AI-powered customer service

Consumers in Singapore are quite open to AI, but even in one of the world’s most AI-forward markets, AI-powered customer service is failing to deliver on its promise, said Qualtrics’ 5th annual Consumer Experience Trends report* in October.

Two-thirds (68%) of consumers in Singapore think AI will have a positive effect on society (the highest globally), but only four in 10 trust organisations to use AI responsibly. This trust deficit represents a challenge for businesses banking on AI to transform consumer experience, Qualtrics noted. Irene Ng (IN), CX Strategist at Qualtrics, provided TechTrade Asia with a few more insights.

Q: Why does the most AI-savvy customer base, which is already using AI extensively for personal tasks, still insist on a human safety net in customer service?

IN: Consumers in Singapore have experienced enough poorly deployed AI to know the difference between AI that helps and AI that deflects. Seventy-three percent use AI daily, and 68% believe it will positively impact society – but when it comes to customer service, nearly one in five globally see no benefit at all.

The issue isn't that consumers don't want AI, it’s misaligned deployment. Many companies use chatbots to cut costs rather than solve problems, leaving customers stuck in chatbot loops that can't understand context, forced to repeat information across channels, and blocked from reaching someone who can actually resolve their issue. When 55% worry AI will eliminate human connection and 46% fear poor-quality interactions, they're responding to systems designed to gate keep rather than assist.

Here's what people actually want: AI that takes human agents to the next level. They want speed and convenience for simple tasks, combined with instant access to a well-equipped human when things get complex. Fifty-four percent still prefer human channels precisely because current AI can't handle nuance, cultural context, or emotionally charged situations. They're not rejecting technology – they're rejecting the false choice between automation and understanding.

Q: How do data security concerns shape consumer expectations in Singapore?

IN: Data security has become the primary barrier between consumers in Singapore and the personalised experiences they actually want. Seventy-nine percent prefer tailored experiences – more than any other market in the world – yet only 54% believe the benefits justify the privacy trade-off.

This fear isn't abstract. It's rooted in watching companies collect data aggressively while delivering vague promises about "improving your experience." Consumers want to know exactly what data you're collecting, not general categories. They want real control to delete it themselves, not submit requests and wait. And 44% are particularly worried about companies using their personal information responsibly.

But, consumers in Singapore are willing to share more data under different terms. Sixty-three percent will open up if companies are genuinely transparent, and 53% want meaningful control over deletion. What they're demanding is demonstrable restraint over data maximisation, clear explanations of how their data improved their experience, and the ability to opt out without penalty.

The companies that win in 2026 won't be those with the most sophisticated data collection infrastructure. They'll be those that prove they can deliver value while collecting less.

Q: How can businesses in Singapore strike the right balance between delivering personalisation and building trust? 

IN: As a first step, businesses need to stop thinking of personalisation and trust as opposing forces to balance. The breakthrough is understanding that personalisation and trust are inseparable. Customers will not embrace personalisation unless they trust that it genuinely benefits them.

The current approach is backwards. Companies collect everything possible, then seek consent through complex privacy policies. A more effective strategy is to only collect what is necessary, show customers immediately how their data improved their experience, and give them genuine control throughout.

Winning organisations focus on contextual, real-time personalisation rather than exhaustive profiles, using willingly shared data to anticipate needs without overreach. They combine this with transparent governance - ethics boards, clear escalation paths, and opt-in data frameworks - to ensure personalisation enhances experience while strengthening trust.

In short, personalisation works because it is trustworthy, and trust grows when customers see tangible benefits from every interaction with AI or human-assisted systems.

*Drawing on insights from over 20,000 consumers across 14 countries - including 1,500 from Singapore - the report provides a look into the state of customer experience around the world.