AI in customer communication: the opportunities and risks SMBs can’t ignore

UK companies are significantly increasing their investment in AI, with spending by small and mid-sized businesses (SMBs) growing fivefold between 2022 and 2024. In fact, in 2025, SMBs could save over £29,000 annually through the adoption of AI tools. With economic uncertainty and rising operational costs still affecting UK businesses, AI’s ability to boost efficiency and drive profitability is especially important for the competitiveness of businesses.

One key area experiencing fast growth is customer communications, where AI is enabling businesses to personalize messages at scale, respond faster to queries and streamline service workflows. These capabilities aren’t just improvements, they’re becoming expectations.

When done right, AI can increase customer satisfaction, improve accuracy, and free employees to focus on more complex tasks. But without careful, responsible implementation, businesses risk eroding trust just as quickly as they boost performance.

Trusting AI to make the right connections

Generative AI is still a relatively new presence in customer communications, yet many people are already growing accustomed to its role. Nearly half (49%) of consumers aged 18–35 are now comfortable with organizations using AI-generated communication, appreciating the potential for more personalized, timely interactions that improve their experience. When implemented thoughtfully, AI enhances the human touch, handling routine tasks efficiently while enabling deeper, more meaningful engagement.

AI in communications can also drive measurable outcomes for wider business goals. According to a 2024 KPMG report, UK brands saw a 1.4 percent increase in customer satisfaction as a result of using AI in customer interactions. These improvements might take the form of real-time delivery updates, personalized recommendations based on past behaviors, or greater accuracy in billing and appointment scheduling, all of which improve the customer experience.

Building consumer trust in AI

However, the newness of AI means trust isn’t universal. Just 23% of consumers aged 55 and over feel comfortable with AI communications, highlighting the ongoing challenge of earning trust across a diverse customer base. Similarly, skepticism remains around communication quality, security and privacy. Research shows that 58% of people believe AI produces lower-quality written communication than humans, while 81% of UK consumers expect companies to disclose when AI has been involved in communications.

Failing to be transparent about AI’s role or data handling can leave customers uneasy and unsure about the systems, and companies, they’re engaging with. This concern is especially strong in sensitive sectors, where emotional and ethical stakes are high. Nearly half (45%) of consumers say they would respond with anger, discomfort or disgust if AI generated their medical test results, and more than a third (34%) feel the same about AI handling their insurance claims.

As people become more aware and discerning, the pressure is on businesses not just to use AI, but to show exactly how it improves, not undermines, customer experience and communication quality. This shift begins with thoughtful implementation.

From algorithm to ally in customer care

To build consumer trust, businesses must demonstrate that AI genuinely improves the customer experience, especially by enhancing the quality, relevance and reliability of communication. With concerns around data misuse and inaccuracy, businesses need to clearly explain how AI supports secure, accurate and personalized interactions, not just internally but in ways customers can understand and see.

AI should be positioned as an enabler of human service, taking care of routine tasks so employees can focus on complex, sensitive or high-value customer needs. A key part of gaining long-term trust is transparency around data. Businesses must clearly communicate how customer information is handled securely and show that AI is being used responsibly and with care.

This could include clearly labelling AI-generated communications such as emails or text messages, or proactively informing customers about what data is being used and for what purpose. The key to earning consumer trust lies in consistently proving that AI is not just a tool that can boost efficiency internally, but a thoughtful, secure and beneficial addition to the customer experience.

The AI audition

As conversations move beyond why AI should be used to how it must be used responsibly and effectively, companies have entered a make-or-break “audition phase” for AI. In customer communications, businesses can no longer afford to just talk about AI’s benefits, they must prove them by demonstrating how it enhances quality, security, and personalization.

Those that fail to act strategically and transparently risk losing customer trust, while those who get it right will not only pass the audition, they will secure AI’s role as a trusted voice in every interaction.

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