The chatbot industry: an evolution:
Chatbots were designed to simulate conversations with human users over the internet. The banking, financial services and insurance (BFSI) sector have embraced them to solve queries and describe the essentials of their organizations making their technical and managerial support more feasible.
The idea of chatbots was born in the 1960s, but their implementation only took the world by storm more than fifty years later. Natural language processing, AI, the global presence of text messaging applications, which have become a socially acceptable form of personal interaction, presented the need for it. People the world over prefer text messaging rather than personal contact or phone calls and according to the eMarketer, they foresee that by the end of 2019, more than a third of the world will use messaging apps.
With industry evolution, SnatchBot now has a new vision of the future:
And for those still unsure as to what a chatbot is: the following will help:
What is a chatbot? It is also known as a talkbot, chatterbot, Bot, IM bot, interactive agent or Artificial Conversational Entity. It is a computer program which conducts a conversation in natural language through auditory or textual methods. What makes it so phenomenal to most users is that it understand intent, and sends a response based on the rules and data of the specific business.
The Chatbot Industry Size
The size of the market in 2017, was worth USD 864.9 million and it is projected to expand at a compound annual growth rate (CAGR) of 24.1% to reach USD 3146.4 million by 2023. The report’s scope included North America, Europe, Asia Pacific, Latin America, the Middle East and Africa, but was limited to types of industry which included solutions and service, deployment (including on-premise and cloud), and end user verticals (BFSI, healthcare, IT and telecommunication, retail, utilities, government and others). The study also included the benefits of chatbots in accordance with diverse application and its future prospects.
Market growth is driven by the development of artificial intelligence (AI), the increasing demand for intelligent customer engagement, the need to understand customer behavior and increased penetration of websites and mobile applications. In the near future Chatbots are expected to present huge opportunities for market expansion as technological advancements continue.
The dominant player in the area continues to be the web based segment, however, the adoption of software among banking and financial institutions has led to their domination within the overall market. This is fueled by the need of the BFSI sector to improve customer relationship management (CRM) and the advantage which chatbots offer as a wonderful customer support system.
Artificial intelligence applications offer numerous benefits and an ever increasing consumer base. Messaging applications are being used across the globe increasing the demand for chatbots which imitate human conversation, while also solving various issues. Companies and startups across the globe are investing in this technology to help them run their business more efficiently and ease their work load. WeChat bots are increasingly used in China for all types of services which include money transfers, medical appointments and flight check-ins. These tasks can all be handled with a combination of voice recognition and AI without the need for contact with the device and these applications are also suitable for smaller and medium sized businesses.
Blockchain technology with chatbots will further enhance their potential and performance with increased consumer interaction and acquisition.
The Chatbot industry: Who are the key players
SnatchBot, Microsoft, Facebook, Google, IBM, Apple, Samsung and many more of the top names in the technology industries have worked to create their own chatbots, with open platforms and interfaces which allow for easier acceptance by users.
The key players in the global BFSI chatbot market include SnatchBot, Artificial Solutions, Nuance Communications, Inc., eGain Corporation, Creative Virtual Ltd., Next IT Corp., 24/7 Customer Inc., Codebaby (Idavatars), Anboto, Inbenta Technologies Inc. and Aivo. The BFSI Chatbot Market in the BFSI industry is expected to reach $2.186 million by 2024, growing at CAGR of 29.7% (2018 -2024). The highest CAGR of 31.4% for the same period is expected to be in the Asia-Pacific region. Banks have had the dominant position in chatbot use since 2016 and are expected to continue to do so over the forecast period.
Siri was introduced in 2010, IBM Watson in 2011, and Bixby Samsung voice assistant in 2012. Alexa came to answer questions in 2014 and the Google Assistant took its shape in 2016. It’s now 2019 and according to Google trends, online users are still as interested as ever before and continuously look up chatbot. People search online to find out more about them, not out of curiosity, but because they have discovered that they can offer solutions for many real problems and they want to keep up to date.
Real time messaging has changed the way people communicate in their personal lives, but it has also opened up a whole new world of possibilities in business relations.
Most users today are not online for retrieving information; they use their mobile and website applications for making appointments, buying items, banking and booking holidays. Chatbots are integrated into Facebook Messenger, WhatsApp and other social media and communication apps allowing them to complete various tasks seamlessly. One example of this type of application is Goibibo, a travel company based in India. When someone books a flight through them, they receive an automated WhatsApp message and presents options for seat allocation and meal preferences. Once the user selects the preferred options, they are registered from the app without the need to log in to the application.
ShopBot is eBay’s virtual personal assistant which helps customers find their desired products by just typing a short description. The ShopBot will ask relevant questions and display the suitable results.
According to Facebook IQ, more than 2 billion business- related messages were sent through Facebook Messenger each month in 2017, with more than 67% of participants in the study expressing expectations of reaching seller and service providers through chats. This number had doubled from the previous year, 2016, proving that Facebooks focus on chatbots was justified, and at that stage they had a presence of 100,000 of them on Facebook Messenger at the time.
In research, performed by Ovum on U.S. and German consumers in 2016, one of the top reasons why respondents preferred online chats was firstly, that they felt that their problems were resolved more quickly and secondly, that they did not need to use a separate app on their device. Their third most important reason was that they were able to have a record of their communication for later use or as proof.
The interaction between clients and service providers has been improved even more by the combination of AI and chatbots and 34% of respondents of a worldwide Statista survey, declared that they would prefer to answer the questions from AI chatbots or virtual assistant in regard to e-commerce by 34%, healthcare by 27% and telecommunications by 25% and one in five stated that they were ready to deal with chatbots for banking and financial advice. The instant reaction offered by chatbots beats phone calls and emails, but they still cannot substitute other business interactions.
Chatbots take away the need for consumers to install special applications on their mobile devices, and since they can function on different platforms, they also save businesses the need for creating other applications.
Chatbot Global trends, key developments
The business and services sector is getting far more competitive than ever before. Customers today are even fussier about making buying decisions and these are usually based on customer experience, which they expect to be first class every time. Human effort alone is not enough to meet these high expectations and chatbots have changed the landscape.
Chatbots have helped businesses cut down on operational costs by up to 30%. They don’t entirely replace humans but empower employees by offering a first level support for customers and save a company time by filtering customer requests. Brand outlooks are boosted by the visual interaction with clients from further afield.
Chatbots outperform apps since they are more functional and cost-effective and millennials love them, and the older generations trying to catch up.
In the medical world chatbots are used for booking appointments and making payments. The advent of AI, machine learning and NLP are driving the medical industry in a whole new direction and they will include detection of medical conditions by knowing the symptoms, medication suggestions and treatments.
A Russian based company, Endurance, is implementing an innovative patient care product using NLP. It is a companion chatbot designed to chat with Alzheimer’s patients. These patients are afraid to converse with other people, due to their memory loss, and as they converse with the bot it can identify deviations in the conversation and can communicate logs and findings, because it is cloud based, to the relatives and doctor.
AI is not only beneficial to IT corporations anymore and many multinationals are investing into research and development and are coming up with a wide range of applications for chatbot. The bots are more efficient and intelligent and are able to chat with thousands of customers at a time, offering 24 hour support and client-specific responses.
As the demand for smartphones has increased, the use of messenger apps has grown accordingly, continuously driving the chatbot market upward. The Asia-Pacific market is the fastest growing region with heavy demand in India and China, with startups there investing heavily.
In May 2018, eGain launched Solve, based on Amazon Web Services (AWS) cloud infrastructure, it offers a solution for Amazon Connect and is expected to enhance the customer experience and alleviate latency.
Chatbots have a superior advantage over other customer support options and their integration with social media drives the growth of the market. However, the initial cost of installing is expected to hamper market growth slightly during the forecast period up until 2024. Banks are particularly reliant on chatbots and integrate them into their systems as they have the potential to simplify the entire banking experience for their clients, thereby, maintaining customer relations.
Besides offering 24/7 assistance and increased response capacity, they also offer increased return of investment (ROI) for customer support and streamlined process for repetitive inquiries. They also increase first time resolution and enhance customer convenience.
Chatbot trends to watch
Conversations with bots are becoming even more human like and very soon we will not be able to distinguish if we are speaking with a bot or a human. This is because of natural language programming (NLP) which allows them to respond in complete sentences that flow normally. They speak in specific dialects with pauses or small sounds, putting customers at ease.
Chatbots put information together by collecting data from various sources. This information is then used as they interact with users. Their ability to collect and analyze data is an invaluable tool as they are able to process, understand and react to whatever data they are taking in and do not make errors. Very soon they will be able to interact fully with the user at every stage of their needs, without giving generic and unhelpful information, making the user’s experience unique. This will be possible by utilizing personalization tools.
Apps are already being used less and might soon become a thing of the past as we ask virtual assistants like Google or Siri to open something for us and saving us time.
Voice recognition software is already being used and is another reason why apps will eventually be phased out. Their use is about to become even more widespread as talking to our phone or computer is easier. Voice-based software is going to be the next big trend in the coming years and we will soon not need to type at all.
Chatbot technology is still in the development stage and only about 20% of internet users, according to reports, have incorporated their use in their day-to-day lives. By 2021 this figure is expected to increase to 93%. Businesses are also expected to increase their use substantially and chatbots have revolutionized the way we do business and the way we live.
Getting started quickly with chatbots:
