How businesses are harnessing CPaaS and intelligent digital messaging to improve customer experience

With the growth of online commerce and transformation of digital channels, like Google, Instagram and TikTok, into digital marketplaces, 60% of global organizations have turned to communications platform-as-a-service (CPaaS) solutions to help facilitate more personalized, real-time customer interactions and overcome legacy challenges for their IT. One of the biggest drivers for CPaaS adoption is that future consumers — like Gen Z and young millennials — have come to expect an always-on, personalized experience when interacting with brands on the communication channels they already use.

Currently, over half of global businesses have implemented CPaaS technologies into their current technology stacks to deliver on these evolving consumer demands. Gartner predicts that by 2025, CPaaS solutions will be used by 95% of global businesses — up roughly 35% from current adoption.

It used to be that consumers could communicate with brands in only a few ways. They could visit a store, mail a letter or call a toll-free number for customer support. Today’s customers expect a richer experience: they want to engage with brands in real time through intelligent messaging and personalization so that they feel they are being heard, as well as through voice and video, on their channel of their choice. 

Despite the increased adoption of CPaaS, there remains a significant disconnect between consumers and companies about the quality of their customer service experiences. While 80% of companies say they deliver a “super experience,” only 8% of consumers agree.

One of the ways companies have been seeking to close this gap is through delivering more integrated experiences across multiple channels, including SMS, rich communication services (RCS), WhatsApp Business, Instagram and more. Another method we see playing out is the deployment of generative AI capabilities, like ChatGPT, as a significant part of the conversational messaging experience.

Here’s what businesses should know as CPaaS continues to expand and evolve.

What is CPaaS?

First off, you are probably using CPaaS without even knowing it. It is a cloud-based technology that enables businesses to integrate customized communications capabilities, including voice, video and messaging, into applications, business processes or services by deploying application programming interfaces (APIs). This allows companies to automate and orchestrate customer and employee interactions on a single, centralized cloud communications platform, enabling smarter interactions and richer experiences on any communications channel.

For instance, when you receive an SMS text reminder about an expected delivery or a one-time multifactor verification code, that’s a CPaaS platform orchestrating these messages to share relevant-to-you information, enable a two-way conversation or add a layer of security.

When integrated into an enterprise, CPaaS solutions allow companies and developers to embed new communications tools into their existing processes using APIs, software development kits (SDKs) and integrated developer environments (IDEs) or low-code tools. This capability serves as a software intermediary that enables two different applications to communicate with each other. 

What is ahead for CPaaS? As consumer expectations rise rapidly, the pace has proven difficult for companies to keep up with. For widespread implementation of the technology, businesses must also address the skills gap, a hurdle 71% of CEOs anticipate to be a big disruptor of business. Implementing low-code solutions means this technology can deliver more value to organizations across the healthcare, financial services, retail, utilities and logistics sectors without taxing technical teams, and it is set to see wider adoption as consumers continue to look to use various digital channels as their preferred method of communication.

In healthcare, true personalization requires deep integration of technology stacks

While the healthcare sector has traditionally been slower to embrace new technology than other sectors, the adoption of electronic medical record (EMR) systems, like Epic software solutions, has accelerated the digital delivery of health services. EMR systems provide the building blocks for healthcare providers to collect and securely store patient information, making it easier for patients to view their health records or testing results online.

When EMR systems are combined with CPaaS solutions, providers can identify important information that needs to be communicated with a patient, such as an upcoming health appointment or the availability of a recent test result, and then notify them securely using the patient’s preferred communication channel, such as SMS, email or voice calling.

This is especially important when time is of the essence, such as during infectious disease or virus outbreaks, like the COVID-19 pandemic. In these circumstances it’s critical for patients to know as soon as possible if they have tested positive for something that can infect others.

CPaaS platforms automate the digital delivery of healthcare services in ways that benefit patients and healthcare providers alike, but security and compliance are of the utmost importance for these platforms. Approximately 90% of healthcare institutions have experienced at least one security breach in the past few years. When choosing a CPaaS platform provider, it’s imperative to confirm that it complies with all patient privacy and security regulations and take essential steps toward keeping patient information safe. 

Using CPaaS for fraud prevention

For financial institutions, in addition to delivering regular account updates CPaaS serves as an effective platform for boosting security and preventing credit fraud. It enables institutions to send automated alerts to customers if suspicious activity is detected on their accounts, and can add an extra layer of security by requiring that a two-factor verification code, sent to their phone or email, be entered before a transaction is processed.

For example, if a credit card holder is using an account for many more than usual transactions throughout the day, spending large amounts in a single transaction or attempting a purchase in an unfamiliar location or different country, CPaaS solutions can alert the cardholder and allow for easy approval — or prevent credit card fraud — with the click of a button.

How customers receive notifications of transaction activity, account balance updates, or payment reminders matters to them. In turn, CPaaS gives businesses the capability to offer choice and flexibility across a variety of notification channels, such as in-app, SMS, email or WhatsApp. Combined, these technologies provide a rich way for consumers to connect with their financial institutions while improving security and overall user experience.

Early adopters still see improvements on the horizon

The retail and logistics industries are among the most common ones using CPaaS to improve their operations, communications and customer experience through messaging automation. For instance, real-time notifications grant businesses the ability to send customers updates about the status of their orders and estimated delivery time. Further, intelligent features, such as AI chatbots, can be built into the platforms to automate responses to frequently asked questions like “Where’s my package?” in real time.

While SMS-based messaging remains a de facto channel for communicating customer updates, increasingly, we’re seeing brands use existing consumer channels, such as Google search, combined with richer communication channels.

For Google, user traffic surpasses 80 billion visitors per month. To give a common example, a consumer might search Google to find out a specific retail store’s opening hours. After getting the search results, they might want to find out if the retailer has a certain item in stock.

A native integration with Google would give this person a chat option when the results are returned, alongside the usual option to call, allowing them to connect automatically to a digital agent who can respond to their query instead of needing to contact the store directly. This creates a simplified experience for the customer while reducing the retailer’s store calling volumes.

AI’s role in contact centers

As messaging and call volume increase, companies are looking towards automation and AI to streamline their operations and improve the overall customer experience. Contrary to the notion that AI will replace knowledge workers, AI only stands to augment the capabilities of live agents, while humans remain an essential part of overall customer support.

For instance, with AI technologies, contact center agents can analyze vast amounts of customer data to better understand their needs and preferences, and use AI tools to quickly summarize previous interactions with a customer, delivering more efficient and personalized support. This not only saves time for both the agent and customer but also provides a more efficient experience.

CPaaS has become an essential component of many businesses’ communication strategies, from contact centers to direct customer interactions. As this technology continues to evolve, there is still much to look forward to, such as the development of key personalization components that can enhance the customer experience. However, businesses must also prioritize security and ensure they’re using the most secure CPaaS solution for their industry.

As we look to the future, it will be interesting to see if some of these key callouts will transpire in the coming months. Only time will tell!

Ramy Riad is head of innovation and messaging strategy at Webex Connect by Cisco.