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The Philippines is accelerating its digital transformation, with artificial intelligence at the forefront. AI brings both challenges and opportunities in enhancing customer experience (CX). While AI-driven personalization enables more tailored, efficient and seamless customer interactions, it also raises concerns about labor market disruptions, ethical implications and data privacy regulations. KPMG’s Customer Experience Excellence 2024 Report explores how leading organizations combine AI with human ingenuity to power CEE.
Evolving customer expectations and the role of AI in customer experience.
Insights from the CEE 2024 Report reveal shifting consumer expectations in the Philippines. Surveying over 10,200 Filipino customers across 61 brands in eight industries, the report underscores the growing importance of empathy, responsiveness and ethical business practices.
The study evaluates customer experiences across brands and geographies, using KPMG’s Six Pillars of Customer Experience Excellence: (1) Personalization, (2) Time and effort, (3) Expectations, (4) Integrity, (5) Resolution and (6) Empathy. This year, Integrity and Personalization emerged as key factors influencing Filipino consumer confidence. These pillars highlight the growing need for brands to balance AI-driven efficiency with ethical business practices and meaningful customer connections.
Key customer preferences
Filipino consumers value brands that integrate advanced technologies while maintaining ethical, empathetic and customer-focused practices. KPMG’s CEE 2024 report identifies several crucial themes businesses must consider:
• Empathy and compassion – Customers favor brands that demonstrate genuine care, especially in challenging times. One respondent noted, “Brands that have compassion and concern for their customers embody empathy and compassion,” emphasizing the role of emotional connections in fostering loyalty.
• Customer service excellence – While perfection is unattainable, customers prioritize timely and efficient support. AI can enhance service quality through automation, but human oversight remains essential to maintaining customer trust.
• Effortless experiences – Consumers appreciate hassle-free interactions. One customer shared how a brand resolved a second-hand product issue “without extra cost” and with minimal documentation, highlighting the demand for seamless, frictionless experiences.
• Ethical and sustainable practices – Filipino consumers are increasingly drawn to brands that balance environmental responsibility with quality. Forty-five percent expressed extreme willingness to pay more for companies that uphold ethical practices and contribute positively to society.
Generational differences also shape spending habits. Younger consumers are more inclined to invest in personalization, convenience and social validation, while older consumers prioritize value, reliability and cautious spending.
AI adoption and consumer concerns
While AI enhances efficiency, Filipino consumers remain cautious about its impact, particularly regarding: data privacy and security (24 percent), job displacement (20 percent) and AI’s emotional limitations (17 percent). To address these concerns, businesses must strategically integrate AI, reinforcing trust through transparency, data protection and human-AI collaboration.
In today’s digital age dominated by machine-mediated interactions, maintaining a human touch is crucial. Last year’s CEE report highlighted that consumers connect with personalities, not machines. Leading organizations are humanizing their AI interfaces, making them more engaging and relatable by attributing human traits to non-human things, creating better experiences.
Industry leaders in CX excellence
Certain industries and brands excel in meeting consumer expectations:
Top 5 Industries in CX Performance (CEE 2024 Score)
1. Restaurant & fast food (8.27)
2. Grocery retail (8.16)
3. Non-grocery retail (8.13)
4. Travel and hotels (8.00)
5. Logistics (7.88)
Shifting market dynamics in CX
For the first time, ‘gas/petrol station’ sub-sector outperformed ‘banking’ in CX rankings, reflecting changing consumer priorities. Meanwhile, ‘supermarkets’, ‘payment services’, ‘airlines,’ and ‘online retail’ sub-sectors showed notable improvements, while ‘cable & TV/internet services’, ‘delivery service,’ and ‘telecoms providers’ fell below the market average CX score of 7.91.
Top 10 Sub-Sector Brands:
1. Gas station/petrol station 6. Airlines
2. Fast food 7. Online retail
3. Banking 8. Cable & TV/internet services
4. Supermarket 9. Delivery service
5. Payment service 10. Telecoms provider
Elevating CX excellence in the AI Era through KPMG’s Advisory
To navigate the evolving AI landscape and ensure superior CX, businesses need expert guidance on responsibly harnessing AI. KPMG’s customer advisory services help organizations:
• Optimize customer service operations by balancing automation with human touch.
• Develop ethical AI frameworks addressing data privacy, job security and emotional intelligence.
• Implement AI-driven personalization strategies that maintain authenticity and trust.
• Align CX strategies with the Six Pillars of Customer Experience Excellence, ensuring customer expectations are met with integrity and empathy.
As AI reshapes customer interactions, businesses that prioritize transparency, ethical responsibility and human-AI synergy will lead in delivering world-class customer experiences.
Methodology
The survey, conducted from May to July 2024, targeted a national representative sample in each market. Respondents interacted with the brands in the previous six months, with interactions including purchasing; using products/services; contacting brands; or browsing websites. The CEE score was calculated using the weighted average of the Six Pillar scores of each brand, measuring overall performance.
Mary Grace Chung is a director from the Management Consulting under the Advisory Group of KPMG in the Philippines (R.G. Manabat & Co.), a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. For more information, you may reach out to Mary Grace Chung through [email protected], social media or visit www.home.kpmg/ph.
