In recent years, smart chatbots have gained significant traction across enterprises. The need to reduce operating costs, coupled with the pressure of increasing sales, is pushing companies to invest in the technology. A global trend that started around 2015 has become a norm for most multinational organisations today. Several enterprises have moved a significant share of their customer support to chatbots to help users in better navigation.
Simply put, chatbots are computer programs that use artificial intelligence (AI) to hold conversation with humans/clients/ users either through text or voice. They help businesses in better utilising their human resources and efficiently catering to customers by automating certain aspects of the user communication process. Chatbots provide a 24×7 support system to customers and help organisations save on both time and money. While human executives can speak only to one customer at a given time, chatbots can entertain queries of a large number of customers simultaneously. This translates into significant time and cost savings. According to Juniper Research, companies can expect to increase their annual savings from $20 million in 2017 to around $8 billion by 2022 through the use of chatbots.
Further, chatbots can use predictive analysis along with pattern recognition to create more personalised experiences for the users. Since chatbots have a repository of a large amount of data, they can help organisations derive business insights for improving functions and processes.
Therefore, big companies like Facebook, Google, Microsoft and Amazon are not the only ones investing significantly in the development of chatbots. In the past couple of years, a whole new world of start-ups around the chatbots space has emerged, both globally and within India. In fact, India has been at par with its global counterparts in terms of adopting chatbots technology. This has been made possible due to the presence of a large mobile-enabled population, advanced capabilities in machine learning and AI, and a proactive entrepreneurial ecosystem. According to the Tracxn start-up database, there were over 100 chatbot start-ups in India as of 2017. These start-ups are bringing in cutting-edge technological innovation to solve different problems across a wide range of sectors such as human resources, finance, healthcare, education, e-commerce, and fashion and lifestyle.
Enterprises across sectors are increasingly deploying chatbots to offload the routine tasks on to them and run core operations in a more systematic manner. According to Mumbai-based chatbot platform Haptik Infotech, the Indian chatbots market will potentially grow from a $700 million market in 2016 into a $3 billion market by 2021.
Adoption across sectors
In terms of adoption across verticals, enterprises in the banking, financial services and insurance industry have been one of the early and successful adopters of chatbots to support their customer services staff, streamline operations, reduce costs and provide best-in-class services to their users. For instance, Yes Robot by Yes Bank is a personal banking assistant that allows users to check their balance, carry out transactions, pay bills or recharge phones, and sign up for any of Yes Bank’s services. Similarly, ICICI Bank has introduced software robotics to automate, regulate and perform high-density tasks, thereby increasing productivity. The software uses facial and voice recognition, neuro-linguistic programming, machine learning and bots to automate around 200 business processes.
Chatbots are also expected to act as game changers in the Indian healthcare ecosystem as they can efficiently address the barriers of distance and money that prevent people, particularly in rural areas, from getting the care they need. Chatbots can serve as virtual therapists. Wysa is one such chatbot developed by a healthcare start-up called Touchkin. It uses natural language processing and AI to track emotions, develop emotional awareness and make the patients feel motivated. The chatbot conducts psychoanalysis on the users and creates a weekly report, which helps the users understand their emotions better and take necessary steps.
The e-commerce sector has also seen large-scale deployment of chatbots in the past few years. According to Morgan Stanley, the Indian e-commerce market will increase from $15 billion in 2016 to $200 billion by 2026. This massive growth in market valuation will be driven by an increase in online penetration. In order to take maximum advantage of the upcoming opportunities, e-commerce players are leveraging various technological advancements, chatbots being one of them. Flipkart, India’s biggest e-commerce company, also uses AI to understand its buyer’s behaviour. The company has built a machine learning model, which tracks the various attributes of customers such as their gender, brand affinity, store affinity, price preference and shopping pattern. Lenskart is another such player that uses chatbots for order tracking, query logging and assisting its users in product discovery. Lenskart has also introduced a virtual trial room feature.
Of late, even the government is keen on riding the chatbot wave. Chatbots are a great tool for the government to better serve its citizens, ensure transparency in operations and redress concerns more speeding. The government can also seek frequent feedback from the citizens, which will further help in improving the service delivery mechanism. For instance, Indian Railways is currently working on deploying automated chatbots to address queries on schedules, ticket availability, trains for particular destinations and other such rail travel-related issues. In another instance, Pune Municipal Corporation, as part of the smart city initiative, has launched a chatbot application on its website. The chatbot has provisions for complaint registration and tax filing. It also provides information on health issues, finance, on how to get a driving licence, among other things.
Challenges and the way forward
While chatbots undoubtedly will change the future of how businesses are conducted, the technology does not come without shortcomings. Security is probably the most significant shortfall of chatbots, which are prone to hacking. Malicious agents can easily get access to the organisation’s networks, user data, company database, etc. Companies need to be extremely cautious in terms of storing the information. They should also keep track of people who have access to the information and how the information is being used. Security assumes far greater importance for a company that operates in the banking and financial space given the sensitivity of data that they deal with on a daily basis. Also, while chatbots are fast and efficient in doing the routine tasks or resolving the common/regular queries, they are not as helpful when a slightly complicated query comes up. Another problem associated with chatbots is the potential to make mistakes. Chatbots are trained to revert in a specific way to a specific query. If the input received from the customer in terms of language spoken or word used does not match with what the chatbot has been trained with, then it will most likely make mistakes. Certain aspects of work require human intelligence and the current state of chatbots development is clearly not such that it can take over human task completely. Further, the installation cost of chatbots can be very high as they need to be trained differently for different businesses.
Further, the linguistic diversity of a country like India is a potential challenge that chatbot developers need to address. While the country is witnessing a massive growth in mobile penetration, it is important to note that not all mobile users in India converse in English. According to a study conducted by KPMG and Google in 2017, English-speaking internet users are expected to grow by only 3 per cent by 2021. On the other hand, non-English speaking internet users will grow by 18 per cent during the same period.
Challenges notwithstanding, chatbots are a useful tool for businesses when complemented with human intelligence and capabilities. Enterprises do realise this and therefore have adopted an amalgamation of both in their businesses. Advancement in machine learning and AI will help in further improving chatbots as per the needs of the industry.
