How agentic AI will revolutionise customer experience in Australia

The COVID-19 pandemic changed the way Australian businesses interact with their customers. Faced with lockdowns, staff shortages and a massive shift to digital channels, many turned to automation as a lifeline. Chatbots — quick to deploy and relatively cost-effective — were the obvious choice. But what got us through the crisis is no longer good enough.

Customers are growing increasingly frustrated with inflexible, scripted chatbot interactions. What started as a stopgap solution is now creating friction, and Australian businesses are starting to feel the impact.

Recent research found that 40% of Australian consumers are uncomfortable with automated interactions and 57% would consider switching brands if their issue isn’t resolved on the first contact.

Hitting the chatbot ceiling

Early chatbot implementations were about survival, delivering basic support quickly and at scale. But today’s consumers expect more: they want support that’s responsive, contextual and tailored to their needs.

There hasn’t been enough progress with these automated customer service tools because they are being held back by their design. Traditional chatbots operate within strict scripts and struggle with real-world complexity. As customer queries become more nuanced, these systems fall short, forcing businesses to either disappoint users or bring in costly human back-up. Neither path is sustainable.

Enter agentic AI

A new generation of AI — agentic AI — is rewriting the customer service playbook. Powered by large language models (LLMs) and sophisticated algorithms, these systems are designed not just to respond, but to act. They can manage entire workflows, make context-aware decisions, and handle end-to-end customer journeys without needing human intervention at every turn.

Imagine a virtual assistant that doesn’t just respond to “What’s my account balance?” but can identify irregular activity, offer personalised recommendations, and even follow up on unresolved issues autonomously. That’s the promise of agentic AI, and it isn’t just for the big end of town.

For small and medium enterprises (which represent 97% of all businesses in Australia), AI-powered tools like virtual receptionists are just the start of a much bigger shift in how we deliver customer service. SMEs are the group to benefit most from digital employees to help manage customer calls, book appointments, direct queries and ensure no lead or enquiry slips through the cracks.

It’s also important to note that, rather than replacing humans, agentic AI supports them by taking on repetitive tasks and freeing up human teams to focus on the kind of high-value, high-empathy work that drives real customer loyalty.

Building better relationships, not just smarter systems

Australians value authentic interactions, and agentic AI is getting better at delivering them. These systems are learning to understand not just what’s said, but what’s meant. That’s making these customer interactions feel more natural and less robotic. Over time, AI agents can build context from each engagement, helping businesses develop stronger, more personalised relationships with their customers.

While there is growing interest in — and adoption of — AI in Australia, there has been a significant divide in AI-readiness among Australian SMEs. Government research in late 2024 found that 35% of SMEs are adopting AI. However, 23% are not aware of how to use the technology and 42% are not planning to adopt AI in their business.

The difference with agentic AI is that SMEs don’t necessarily need any technical understanding of AI to implement solutions that are addressing very specific use cases. Gartner predicts that one in three enterprise applications will include autonomous AI agents by 2028, which is why we expect far more widespread adoption of the technology, as has been seen in North America.

Across all enterprises, that certainly seems to be the case. New research from Cloudera found that 91% of ANZ organisations believe it vital to invest in AI agents to maintain a competitive edge, with 97% planning to expand usage in the next 12 months.

The next chapter

If the pandemic fast-tracked Australia’s digital transformation, agentic AI is set to define its next chapter. For businesses across all sectors, agentic AI offers a competitive edge: smarter operations, better service and more meaningful connections.

By understanding not just the words but the intent behind each interaction, this technology will increasingly transform customer service from reactive to proactive, and it has the potential to eliminate frustrating customer experiences and create more human, helpful conversations, at scale.

Image credit: iStock.com/Olemedia