From a customer perspective, the only thing more frustrating than being denied a product or service is when that denial comes without a satisfactory explanation. As humans, our ability to deal with disappointment depends on understanding why it happened. Without an acceptable rationale, we’re apt to assume the worst: deliberate disrespect, and blind prejudice.

This aspect of consumer psychology may create problems for companies relying on decision-making algorithms for vetting purposes, fraud prevention, and general customer service. We’re seeing widening adoption of AI in fields such as marketing and financial services. On balance, this is great news, allowing companies to serve customers with unprecedented speed and predictive precision. However, while bots beat humans hands down at making accurate decisions at scale, their communication skills (so far, anyway) leave much to be desired. As algorithms assume a more prominent role as gatekeepers, where will rejected customers turn for an adequate explanation? And how can companies provide one without revealing too much about their proprietary algorithms—which are, very often, essential IP?

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