The Chatbot market is rising fast – thanks to AI proliferation and the interest it has attracted. It is not new at all (Chatbots) – but is now backed by a a game changer, namely AI. It is now a matter of strategic advantage: companies without chatbots are fast losing their competitive edge as cost leadership on labor is shifting to those who have chatbots in place.
What is a Chatbot, you must have wondered too? A Chatbot is a computer application built to imitate normal human interaction with humans particularly on the web. It basically lives in the cloud these days and is crucial to marketing, customer service and various key business functions.
But the market is moving fast: These days, there are Chatbot marketplaces – like SnatchBot, where you can buy a chatbot, or even sell one you created. These marketplaces are typically linked to a chatbot platform from where a business can integrate all of its multi-channel communication, regardless of what social media platform and other channels are in use.
Chatbots are taking over the BFSI sector already as it is fast becoming the favored choice in describing the fundamentals of an organization as well as solving queries whenever a personal communication with the necessary banking support system is not available. According to statista, the global chatbot market stood at a staggering $190.8M
In the BFSI section alone, the value of the Chatbot market stands at $357M in 2017 while the whole chatbot market is valued at $864.9M. The chatbot market in the BFSI is estimated to reach $2,186M in 2024, increasing by CAGR of 29.7% between the time periods of 2018 to 2024.
The global chatbot markets are also expected to grow to an exponential rate of $3,146.4M by the time we reach 2023 increasing by a CAGR of 24.1% from 2018-2023. We will discuss the type of chatbot markets as well as the solution and service they provide, usage which include cloud and on-premise deployment, end-user verticals like government, retail, healthcare, BFSI, IT and telecommunication, among others.
There are several factors contributing to the increasing demand for chatbots such as the need a robust customer interaction avatar, the rise of AI (Artificial Intelligence), increased need to understand consumer behavior, and the increased outreach of mobile applications and websites. Additionally, the non-stop technological development in chatbots will pave for expansion of the chatbot market over time.
The constantly changing development and usage of AI apps are blowing out of proposition due to the immense potential it holds and the increase in user. One thing we can’t deny is the swift adoption of AI tech due to the high speed of its development, which definitely is changing the chatbot market as we know it.
Right now in the world, we can count these messaging apps among the top apps based on usage and popularity, Skype, WhatsApp, Slack, and Facebook Messenger. The increase in the number of messengers’ apps worldwide is influencing the demand for chatbots that can mimic human communication behavior and answer several queries.
Most businesses and newly established companies are capitalizing on the technology to make the running of their organization easier and help take on client’s inquiries. Let us look at an example of China-based WeChat bots, these bots are been utilized to book medical appointments, money transaction, and much more.
AI fused with voice recognition is also top of the demand for consumer as they can carry out all the tasks stated earlier without touching the gadget, this can be of help to SMEs in that way pushing the predicted market growth beyond the forecasted timeline. In addition, the big players in the industry are itching to see the potential of blockchain technology fused with chatbots, which can boost the performance of these chatbots creating an end result of increased customer conversation along with gaining the customer.
The increasing Usage of Website and Mobile Applications
In the present age, people are depending more on their website and mobile application for a lot of tasks. Businesses are counting on chatbots to improve the customer interface and general experience by joining up with WhatsApp or Facebook messenger. Take, for example, Travex, a Finland based traveling agency effortlessly incorporate chatbots into Facebook Messenger app in which when a user books a plane via the agency, the person will see an automated Messenger message in order to confirm his seat and meals inclination. Once confirmed the order is automatically recorded in the system without having to log into the app.
Cloud predicted to become the Fastest Growing segment
Chatbots that are based on cloud network present the option of higher scalability and flexibility to company operations. Also, the utilization of cloud network offers fast access to data and immediate analytics which aid businesses in making crucial decisions. Presently, companies prefer making use of cloud services over on-premise hosting due to cheaper cost because we have companies that have pay as you go option in which the integrator is a charge based on their fair usage, this should propel the growth of the market for some years.
Highest Gains to occur in the Asia Pacific
Across the Asia Pacific region, you will find several new companies capitalizing on chatbots and machine technology. In addition to that, SMEs are lagging behind either, they are swiftly incorporating the utilization of chatbots that offer effortless performance, can handle a huge number of customers, as well as improving the consumer interaction strategy. There is a rapid increase in the number of businesses making use of chatbots due to the soaring demand for AI in return driving the growth of the market.
Key Movement in the Chatbot Market
On May 2018, a company called eGain Unveiled Solve, which is to provide a solution for Amazon Connect established on AWS cloud network, this is anticipated to improve the customer experience as well as lessen the latency
The Chatbot Market: Major Organizations
- Artificial Solutions
- ChattyPeople Chatbot
- Creative Virtual Ltd.
- eGain Corporation
- Next IT Corp
- Nuance Communications, and so on.
In the BFSI sector, the chatbot market is categorized into:
- end user,
The platform has two sub-categories:
- Mobile-based, and
The type also has two sub-categories
- Services, and
Going by the end user, it is divided into:
- Insurance Companies,
- Banks, and
And by Region, we have:
- North America/US
The major players in the BFSI sector for global chatbot market are eGain Corporation, Inbenta Technologies Inc., Nuance Communications, Artificial Solutions, Inc., 24/7 Customer Inc., Aivo, Codebaby (Idavatars), Creative Virtual Ltd., Anboto, and Next IT Corp., Inc.
Top impacting factors
The level growth needed to enhance CRM (customer relationship management), the benefits the use of chatbots has on other customer care choices, and lastly increase in the incorporation of chatbots with social media is driving market growth. Notwithstanding, the rise in the cost of initial installation is projected to hinder the growth of the market during the period forecasted.
The level of growth needed to enhance CRM
There is an increasing adoption of chatbots in BFSI mainly because it is used to sustain a relationship with customers. The increasing shift to digitization in consumer interaction also sways the BFSI segment to realign their connection with their customers and lay emphasis on trying to understand their customer intention and their underlying needs. Consequently, several banks are incorporating chatbots so has to able to streamline the whole banking experience for consumers.
The benefits the use of chatbots has on other customer care choices
The advantages the chatbots possess is that they are available 24/7, they also have enhanced response capability, simplified procedure for repeated queries, increase on ROI for customer care, and so on. Apart from reduction overhead, the utilization of chatbots bring additional business advantages like improved consumer satisfaction by cutting down response rate, improved NPS (net promoter score), increase in the first-time resolution, and improvement of consumer convenience.
Increase in the incorporation of chatbots with social media
Social media channels aid businesses in branding and engagement between the customer and the company. The incorporation of chatbot into these social media channels aid the customers to discover an answer to security, new features, and many other problems relating to the website, as a result, this is driving the usage of chatbot in BFSI sector. Several banks and financial organizations provide services and products straight to their customers using known messenger apps offered by these social media networks like WhatsApp.
The Customer Service is driving the need for Chatbot
Going by a report published by Global Market Insights Inc., customer service segment is driving the need for chatbot holding a 42.52% share of the market. We can attribute that to the significant need by the customer care support to retain present customer as well as gain new customers. Additionally the increasing dependence of sector like BFSI and Healthcare on customer feedback and visibility of the brand. Chatbots make it possible to offer customized services, decrease waiting time, seamless customer experience and a robust feedback method to their clients. This provides assurance on positive customer experience targeted by these businesses. The increasing need for an automated process will definitely boost the whole chatbot market.
The chatbot market is not limited to BFSI, e-commerce, and other financial sectors. It is also projected to reach into the medical sector. Furthermore, there will new channels of usage in addition to the known utilization of chatbots in making transaction, checking in or booking an appointment. Chatbots could be deployed in the detecting medical issue by diagnosing the known symptoms, suggesting the related drugs and therapy.