The Rise of Chatbots: ECommerce Rebirth Against the Hype

At the very end of 2017 VisualCapitalist published an article stating which industries in the IT field have been the most overhyped and crowd-pleasing.

The survey was conducted by First Round Capital among 869 venture entrepreneurs from the US that work in IT — each one has stated his relation towards trends that have been on the marquee.

Bronze prize was given to chat bots, sharing the pedestal with AR & VR’s gold and Wearable technologies industry’s silver — how has it happened and why, are chatbots and conversational UIs really overrated?

It’s truly hard to overrate the need in covering such stats a bit deeper — First Round Capital states that new IT-companies and startup founders find the information on what other entrepreneurs that share the same industry do and think about as critically important, in the means of self-improvement and orienting regarding their own business strategy.

What is the reason for a gap this huge between customers and future entrepreneurs’ expectations towards these industries? More than half of the interviewed are skeptical about chatbot industry being a game-changer, a quarter of them are neutral on this, while only 11.8% find it promising and underrated.

However it’s quite an effort not to miss a fact that most of those who answered consider chatbots only as a way to draw investment funds, while around 94% think it’s about time to launch a company of their own.

Chatbots are heavily endorsed by a big number of startups arising throughout the past years, but what about companies and enterprises that are already on the market and known? An option to launch one’s own chatbot company is already offered by BRN.AI, who are constantly up on e-commerce’s most interesting cases and ready to contest all of the scepticism around chatbot industry.

Chatbots and Modern Banking

The bank industry was one of the first that got aroused by the genesis of chatbots, because of them being an efficient way to cut the expenses on communication between banks’ call centers and the customers. But how does one profit from this? Chatbot gives an easiest way to get directions and information regarding your banking questions, such as blocking a lost card, seeing how much you’ve spent or acquired, or knowing closest ATM’s location.

Swedbank has already introduced their chatbot Nina to solve low customer satisfaction, Bank of America uses the chat consultant Erica for personalized financial advice and peer-to-peer money transfers (from client to client).

There are still other functions of chatbots that banks use for their needs. Banks use the help of chatbots in hiring employees — they help with systematically reducing the cost of hiring personnel, conducting automatic testing and sending candidates to the most relevant positions for the interview. Several startups around the world (Talkbank, Monobank) offer users to use chatbots and mobile apps as the only way to communicate with banks. Most of the time, financing and conducting processing operations is done by existing banks, but this diversification allows them to compete with other traditional banks, drastically cutting costs on staff, call centers and physical premises.

Chatbots are not necessarily becoming “enemies” of call centers, depriving people of work. Many banks have a hybrid system in which chatbots act as assistant operators. Providing tips and recommendations, chatbots increase the efficiency of operators, while improving the user experience. In example, the Aida chatbot that operates in the Swedish SEB bank — during the first three weeks of implementation, conducted more than 4,000 conversations with 700 employees, providing technical support and advice to the bank’s staff.

According to a study in which 100 financial and credit organizations from Eastern Europe and Asia participated in the spring of 2017, 18% of respondents already use chatbots, 93% rate the technology as promising, and 21% think about implementing one in their organization.

One third of respondents believe that such a decision will be economically viable, and one in four expect that introducing a chatbot is about to reduce the load on the call center. Every tenth bank expects that the adoption of chatbots will attract a younger audience, but this is rather a conservative estimate, as the popularity of mobile applications and instant messengers is seen to increase for all age categories.

Chatbots and Insurance Business

Everyone in the insurance industry is familiar with problems concerning staff turnover, and no one else but chatbots can help to solve it — the Singapore insurance company “Tokio Marine Life Insurance” uses its chatbot to search for new recruits. The chatbot is able to answer up to 300 questions about the future career of a financial consultant and conduct an interactive quiz for applicants.

“Next Insurance”, an American insurance company, launched a Facebook Messenger bot in March 2017. Asking questions and providing answers, the chatbot has sold commercial insurance to customers, focusing on small businesses owners. In August 2017, the company shared information about the results for the past year — more than 70% of customers ordered insurance using smartphones, and the annual rate of earnings had increased by 35 times ($ 2.8M annual run-rate).

Operating for almost two years (since January 2016), the chatbot of the insurance company Insurify allows you to make an application for an insurance policy and compare different rates in 24/7 mode. Another American company Lemonade reports on record-breaking successes in the speed of resolving issues in the case of an insurance event — the chatbot made a positive decision on the payment in 3 seconds. For most traditional insurance companies, such indicators are something of a fantasy, and customers are already up to expect such an uncompromising level of service.

Chatbots and Tourism

If we’re talking about tourism industry, chatbots are perceived only as an additional channel of communication with the client, especially in cases of problematic situations, when the client is abroad and in need of prompt assistance.

In fact, there are many more possible scenarios in which chatbots can be incorporated. These are chatbot-based guidebooks, chatbot assistants and translators, chatbots of the hotel service industry, and of course, chatbots of companies providing transportation services.

But doesn’t that seem inconsistent? It is pretty doubtful that instead of devoting oneself to enjoying the trip the user will prefer to spend a lot of the time to communicate with virtual assistants. Universal chatbots that allow to combine various services that are required by the traveler, look more preferable.

A good example is the chatbot of KAYAK, which in a casual manner offers the user options for travel, reservations and other services. Thanks to integration with voice assistants (such as Amazon Echo), you can plan a trip without even getting your smartphone out of your pocket. Chatbot prompts for places to rest for a certain budget, and allows you to update plans for future trips through Facebook Messenger.

This is not the only example — airlines around the world have been allowed to register for flights and receive service through applications and chat for a decent time already, and the Skyscanner booking site launched a live travel chat in May 2016.

Chatbots and Telecommunications

Mobile operators and internet providers are more keen than other industries in means of feeling game-changing trends. Soon, a time will come when it will be easier to list companies that have not yet allowed their users to communicate with them using chat and mobile applications.

Questions of technical support, tariff plans management, selection of options for connection, additional services sale — these mechanisms are already well-established, and are rapidly spreading among telecommunications companies. Chatbots not only help customers get information about tariffs and services, but are also able to determine the reason for the call and respond within a few seconds — a good reference point for users who start expecting the same response speed from other companies.

Chatbots and Everything Else

There are still a lot of areas of e-commerce in which chatbots not only act as an auxiliary tool, but actually transfer human communication to the digital environment. Users start facing chatbots more often in real life — it can be medicine, restaurants, utilities and almost everything you can imagine.

The growing attention of businesses and users to the chatbots has been repeatedly noted with research conducted by Accenture, Facebook IQ and BI Intelligence. We at BRAIN have noted another positive factor — even the earliest pioneering chatbots, launched in testing mode by many companies several years ago, are still performing their tasks.