Artificial intelligence (AI) is a hot issue now with world-wide spending set to top $19.1 billion this year, up 54.2 per cent from 2017, according to IDC. Next year, 40 per cent of digital transformation initiatives will use AI services and by 2021, 75 per cent of enterprise applications will use AI, the analyst group predicts.

“From predictions, recommendations, and advice to automated customer service agents and intelligent process automation, AI is changing the face of how we interact with computer systems. Every industry and every organization should be evaluating AI to see how it will affect their business processes and go-to-market efficiencies,” says David Schubmehl, research director, Cognitive/Artificial Intelligence Systems at IDC.

For the first time, retail firms will overtake financial services in terms of spending on AI, with retailers developing automated customer service agents and expert shopping advisors, and refining product-recommendation engines.

We all know how powerful AI-driven recommendation engines can be. Netflix has dropped customer recommendations from its sites and uses an algorithm that recommends new shows to watch, based on data from customers’ own viewing history and preferences, and it works. Spotify unerringly knows your musical taste, while Amazon’s emails require self-control if you are to add items to your wish list rather than hitting the “buy now” button immediately.

And that is the challenge — how to get the balance right between personalisation that delivers what the customer wants and appearing pushy or creepy, between giving the customer exciting choices and frightening them with the level of insight you have into their lives.

That is why it is worth remembering that despite the hype around AI, it is humans — not computers — that select the data to be analysed and the algorithms to be created. It is humans that train the models and customer journeys that AI systems operate, judge the results, and weed out unwitting bias that can emerge as millions of data points in a sample are analysed.

It is also why smart organisations are looking at service as much as sales, as they roll out their AI investments.

Tesco is using AI and machine learning across the business, from internal systems such as driver routing to integration with Google’s Home Assistant device.

High Street bank NatWest has an AI-driven robo-advice service Invest and a text-based Chatbot, Cora. Both provide cheaper and more consistent services to customers than human agents, says the bank. It is now trialling an AI-driven, human-like avatar (also called Cora), which NatWest says can answer basic spoken questions such as “how do I apply for a mortgage?”

These sorts of innovations are just the first steps in the AI revolution, and those businesses that put service alongside sales will deliver the mass personalised services their customers desire and get the best value from their AI investments.