Digital Unassisted Channels – Understanding Chatbots

Digital Unassisted Channels – Understanding Chatbots

By Ian Aitchison, COPC Inc. Chief Executive Officer, Asia Pacific Region

The contact centre industry continues to grow throughout the world with an increasing need for advanced software programs to keep abreast of ever-demanding client and customer needs.

The latest trend we are seeing with software development is the increased use of chatbots. Chatbots are rule-driven computer programs, which enable individuals to interact with an organisation via the chat interface on their website or via text messages or a social media chat facility such as Facebook Messenger.  

They are often designed to mimic “human conversation” and are being used by companies all around the world to automate simple customer service tasks.

What is even more interesting is that there are two types of chatbots. The first type is often called a scripted chatbot. This type of chatbot requires a large amount of developmental input, as each branch has to be scripted. Therefore, the more complex you want the script, the more data you have to gather and input it. 

The limitations of scripted chatbots are that they are time consuming, expensive and will only be as “clever” as you program them to be.

Artificial Intelligence (AI) drives the second type of chatbot. AI chatbots have extended capabilities over scripted chatbots because they learn from every conversation they have with internal and external customers, therefore they gather knowledge and can incorporate that into every new conversation.

Why are chatbots necessary?

So, why are chatbots important? Well, according to BI Intelligence, for the first time ever people are using messenger apps more than they are using social networks. If you are building a business online, you want to build a business where people are that is why you need messenger apps and chatbots.

Furthermore, Gartner projects that more than 85% of customer interactions will be managed without a human by 2020, and chatbots are also expected to be the No. 1 consumer applications of AI over the next five years, so we can fairly safely predict that every CX Leader needs to get up to speed on chatbots.

In what capacity are they being used?

Essentially, they are being used to improve customer service no matter what the industry. 

Banks and financial services providers have been some of the early adopters of chatbot technology.  For example, DBS in Singapore (one of South East Asia’s largest banks), has launched a chatbot service called the "POSB digibank Virtual Assistant" on Facebook Messenger to let customers chat to the bank online with simple enquiries such as those related to branch locations or foreign exchange rates.

Now, whilst this chatbot is fairly limited at the moment, DBS claims that by the middle of 2017 customers will also be able to ask for their account balance, transfer funds and make card payments.

In the United States, financial services organisations such as Bank of America, American Express and MasterCard have all launched similar chatbot services.

How well do they work?

As the industry is still in its infancy, there are no standardised metrics for measuring chatbot performance and as a result there is very little “industry-wide” benchmarking data available.

At a macro-level, the scripted, decision tree-based chatbots generally have lower success rates than the AI chatbots, and even the AI chatbots can still only handle reasonably simple enquiries.  Research seems to indicate that chatbots have between a 60%-85% accuracy rate, but even this depends on what they are being used for.

Companies like DigitalGenius are trying to improve both the adoption rates and the success rates of chatbots by developing an approach, which enables the chatbot software to learn from human-CSRs when encountering difficult questions, much like how a front-line staff member in a call centre might escalate an enquiry to their team leader for advice.

But chatbots are the future and they are definitely a technology worth investing in.