The Edge SME Forum 2017: The rise of the chatbots

This article first appeared in Enterprise, The Edge Malaysia Weekly, on July 24, 2017 - July 30, 2017.
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Hi, my name is Ann. How may I help you today?” The user asks a question using the website’s Live Chat feature and ‘Ann’ provides an instant reply. She then asks if she has given the correct information and whether the user would like any other assistance. 

Ann is in fact a bot deployed by the website to communicate with users. Generally, a chatbot is a software that responds to queries in a natural and human-like way. It is powered by rules, artificial intelligence (AI), machine learning (ML) and natural language processing (NLP) to perform its tasks. 

Today, a growing number of businesses are leveraging the use of chatbots as they are able to decrease friction between service providers and customers. According to Rajnish Khare, head of digital transformation, social business, new media and mobility banking at India-based HDFC Bank, chatbots are filling the gap between intensive customer demand and lack of human capital in the current business environment.

“Customer service is becoming really fast-paced. Consumers want their questions answered immediately. If the company fails to provide the attention the customer is seeking, he could quickly opt for one of its competitors. With the use of chatbots, companies have taken their side of customer interaction and interface to another level,” says Khare. 

Vic Sithasanan, co-founder of technology firm Hyperlab, concurs, saying that bots are able to increase customer retention and satisfaction by increasing a company’s customer outreach and interaction. “Bots have many advantages. They are autonomous, they do not sleep and they can handle difficult customers due to their impartiality [they have no feelings to hurt].”

Best of all, chatbots do not discriminate. “On top of all this, they can be programmed to fit the right customer experience. So, companies that have not already done so should consider deploying bots to deal with customer service,” says Vic.

To extract the full value from the technology, companies should look for a correct balance of bots and human capital in its operations, says Khare. He adds that if the intelligence and predictive capabilities of chatbots are further enhanced, they can be adapted to drive some of the most complex processes in a number of industries.

The best chatbot experience is seamless, where the bot fulfils different tasks in one conversation. While simple chatbots are able to answer frequently asked questions (FAQs), more complex bots are able to understand and fulfil more uncommon requests such as giving directions or turning on the lights in a particular room.

With ML, a bot is able to teach itself and get smarter with each interaction, says Vic. “For example, when we first launched our bot Q, it only had the basic ability to understand what you were saying — it did not have any information. To train Q, we got people to help us by chatting with it. Over a short time, it started learning different types of greetings and how to respond to simple requests.”

Meanwhile, NLP is the ability of a computer programme to understand human speech as it is naturally spoken. According to Dr Mazlan Abbas, CEO and co-founder of Favoriot, which specialises in the Internet of Things (IoT), the development of NLP applications had been challenging as computers traditionally required humans to speak to them in a precise, unambiguous and highly structured programming language.

“Human speech is not always precise. It is often ambiguous and there are so many factors that can make it complex such as slang and regional dialects,” he says.

“It is even more challenging in countries like Malaysia, where there are two predominant languages — English and Malay — used for customer service. But it is not impossible. With enough samples, the chatbot and the underlying technology should be able to process natural language requests better.”

This trend is likely to gain traction. According to a report by customer experience management solutions provider Servion, 95% of all customer interactions, including live telephone and online conversations, will be powered by AI by 2025. 

Additionally, customer expectations that businesses use visual technologies such as virtual and augmented reality are set to skyrocket. Businesses that fail to prepare for this eventuality face a severe risk of being left behind. However, there is always a concern among business leaders that such an investment is too big to bear, especially for smaller companies. 

Mazlan says there is no reason for businesses to worry about the high cost of adopting such technologies as it is not that expensive to use basic chatbots. “Different levels of intelligence can be incorporated in a chatbot. Simple rule-based ones, which answer basic questions, are affordable. The more intelligence it requires, the more expensive it becomes,” he points out.

“But there is no reason for businesses to shun the technology completely. They can try out basic chatbots before determining whether they add value to the company.”

IBM, for example, provides a 30-day trial for its cloud platform IBM Bluemix. Users gain access to an array of products and services, including the Watson application programming interface, which allows businesses to add AI to their apps, says Zainal Azman Shaari, leader of C&SI & Security PMR and EcoD Strategic Initiative at IBM Malaysia. 

There are many examples of chatbots adding value to particular businesses. India-based Niki, for example, provides a simple and easy-to-use interface for its consumers. The AI enables users to search, discover, choose, make payments and even complete a transaction in one simple interaction. 

In Singapore, insurance technology (insurtech) company PolicyPal uses an AI chatbot to simplify and digitalise insurance transactions. Users are able to speak with ‘Kate’, its digital insurance manager, to find out their protection needs before purchasing coverage. Coupled with other technologies that PolicyPal uses in its operations, Kate not only answers commonly asked questions regarding insurance but also automates the sales processes on the platform.

Chatbots and conversational AI will become the predominant interface for customer queries and solutions to ubiquitous issues, says Khare. This will be amplified as more companies are embedding personalities into the chatbots. 

“Just like how in Japan, where mascots are inherent to the company’s brand, chatbots will be given a persona built around the brand and history of the company. Customers will never get bored of the persona and the intuitive replies of the chatbot. They would prefer this over a mundane user interface and user experience.”

Mazlan says in future, chatbots will help companies have better customer relationships. It will be able to have human-like relationships with individual customers and take customer service to the next level. “With more intelligence, chatbots can be more customer-centric. I believe it will not be long before I only need to give my name and the bot will know everything about me and be able to provide better targeted service.”