We live in an increasingly connected and always-on culture. Chatbots, also known as virtual assistants, were developed to enable businesses to offer 24/7 support. They have been most prevalent in customer service environments where customer interactions are relatively standardised and predictable.
In most cases, early chatbots are simple software programs that individuals use through a chat interface on a business website. They are easy to use and available whenever customers need them.
Chatbots can answer sets of predefined frequently asked questions in a set flow based on rules. Users may interact with traditional chatbots using menus of questions, keyword recognition in a text-based format.
While these chatbots come with the benefit of being fast to launch, businesses that decided to invest in them face numerous limitations in truly serving the needs of today’s clients.
The limitations of traditional chatbots
The main limitation of early chatbots has been their rule-based nature. As soon as a client needs support that falls off a specific script, the chatbot struggles to provide meaningful support. The chatbot is following a workflow rather than understanding what the client is communicating. Research by Uberall found that 43% of users said chatbots needed better accuracy in understanding requests and 19% wanted to experience a more natural and human-sounding conversation.
This disruption can lead to a frustrating customer experience as individuals receive error messages, irrelevant messages or are put on hold for long periods while trying to reach a person. The traditional chatbot does not have the intelligence to learn from how customers interact with it, meaning that it will continue to have the same shortfalls without further human intervention.
The limitations of traditional chatbots inspired a whole new generation of AI-powered conversational chatbots.
The rise of conversational AI bots
Conversational AI chatbots, such as Sirma Group’s Melinda, provide a more intelligent solution for interacting with people. These bots truly understand what an individual is communicating and also learn from every interaction, enabling them to provide a constantly improving service over time.
This level of intelligence enables businesses to deploy the technology as a solution in increasingly complex use cases, far beyond the limited transactional interactions that traditional chatbots are capable of.
Conversational AI is also effective in voice-led environments, freeing the client from being forced to type as the only means of instant interaction. In international settings, their multilingual skills enable a broader client base to benefit from the technology.
Conversational AI creates a human-like experience
Conversational AI bots create more personalised and human experiences by combining powerful technologies such as natural language understanding (NLU), natural language processing (NLP), predictive analytics, and machine learning.
These language abilities enable the bots to understand how individuals speak, even if they use slang, abbreviations, and mistakes. The bot can understand an individual’s intent in any interaction without the need for rigid workflows. Each conversation allows the system to learn and improve its interactions in the future.
Conversational AI has the power to recall the preferences of different users and even their personalities, giving more of a human feel to interactions and the sense of an ongoing relationship rather than a one-off interaction.
The conversational bots can analyse vast amounts of information to make meaningful recommendations without human intervention.
At Sirma, our conversational AI chatbot Melinda makes decisions, making it possible to replace human touchpoints in increasingly complex scenarios in the financial services and retail industries. The bot integrates easily with a wide range of technologies to seamlessly become part of internal technology infrastructures and interact with other third-party systems.
Conversational AI meets customer preferences
Conversational AI is popular with customers and research by Hubspot found that 84% of consumers already use natural language processing at home. Its intelligence ensures customers feel understood because it analyses and understands the intent of their interactions. The bot notices not just what they communicate but also how they communicate, such as their use of emoticons, specific phrases, or lots of exclamation marks.
Conversational AI is fast and efficient, removing the need for call centre call queues or in-person waiting times for various customer needs. The technology is exceptionally scalable, meaning that periods of high demand won’t lead to the customer wait times associated with people-based servicing. Suppose the client needs to connect to a human. In that case, the data collected by the conversational AI will appear to the agent in an easy-to-digest format, so the overall experience feels seamless.
Conversational AI allows you to interact with your clients across their communication channels of choice. For example, Melinda works across the web, in-app, Skype, Messenger and Viber. These intelligent bots have decreased the bounce rate on websites from 80% to 40% in some cases.
The clear benefits of this technology show in the form of improved customer satisfaction data and business efficiency. Research conducted by PSFK found that 74% of individuals prefer interacting with chatbots when looking for instant answers. A study by Capgemini found that leading organisations that implemented conversational AI saw an average Net Promoter Score increase of 5 points. 30% of those firms enjoyed a 30% reduction in customer churn, and 37% realised a 30% cost reduction.
The conversational bots also free up your internal teams from customer-servicing activities that technology can handle. The bots enable them to focus on areas where the human touch remains critical, which may constitute more exciting work. The same Capgemini survey tracked an increase in employee satisfaction in 44% of the leading organisations implementing this technology.
Use cases for conversational AI
The intelligence of conversational bots like Melinda opens up a host of complex use cases for financial services providers, retailers and other industries.
Conversational bots provide an effective means of delivering intelligent 24/7 support to clients without the cost base of extensive call centres or face-to-face servicing, saving as much as 90% on the cost of human interaction. An independent survey, commissioned by IBM, has shown those cost savings of around $5.50 per customer interaction managed by a conversational bot can amount to organisation-level savings of $13 million over three years. Research by Juniper estimated that chatbots with natural language processing capabilities would save financial and healthcare companies $8 billion in costs in customer servicing alone by 2022.
What’s more, the bots can spot meaningful engagement and sales opportunities, such as when an interaction indicates an individual needs another product or service. Amazon is reported to make 35% of its revenue through these intelligent product recommendations. Another case illustrated 38% of consumers welcomed intelligent chatbots sharing promotions with them, with 55% welcoming location-specific promotions.
Unlike traditional chatbots, the intelligence of conversational AI enables firms to successfully deploy the bot capability into functions that don’t have predefined scenarios, such as sales, lead generation, account opening and transaction management.
Conversational chatbots are even capable of operating in a Robo-advice environment.
Getting started with conversational AI
Conversational AI bots offer superior support to businesses and clients based on their intelligence and ability to learn over time. These technologies are most effective when integrated into a digital strategy for an organisation alongside clear KPIs.
You’ll see the highest levels of success and return on your investment if you partner with a chatbot specialist that has experience developing and implementing digital technologies to demonstrable results in your industry.
During our 30 years of technological development at Sirma, we enable financial providers and retailers to optimise their use of digital technologies to increase efficiency, decrease transaction costs, operational risk and remove security issues.