March 02, 2017Chatbots Aren't New, So What's the Hype?

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Chatbots aren’t new. We’ve had the technology to build them for a long time; they simply weren’t sexy enough for mass adoption.


By chatbots, we mean the tool used to automate conversations within a conversational interface. They can perform simple tasks like prompt you with questions to fill in a form or even play a more complicated role, like a personal assistant.


What most people have seen so far are examples of chatbots gone awry. For example, think about those outdated automated services provided via SMS.

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Have you ever been messaged by a chatbot?


Such a chat has all the characteristics of a conversation, albeit an annoying one. It’s pretty clear, though, that this conversation is pointless and frustrating from a user point of view. No wonder chatbots like this never grew in popularity. They’re mostly perceived as scams.


But if chatbots are in vogue again, what changed?


Reach

By allowing third party integrations, widely adopted messaging platforms such as Facebook Messenger, WeChat, and WhatsApp have enabled companies to reach billions of people. Even better, the integrations allow companies to connect with customers on the channels they already use. Now there’s no need to install custom applications or surf specific websites.


Reaching out to customers on existing channels has been key to chatbots’ increasing popularity.


A study by comScore reported that users spend 80% of their mobile time on only three apps. It’s easier and more effective for companies, then, to reach customers on existing messaging apps rather than build and promote their own channels. The users just aren’t there.


Third party integrations with messaging apps have presented a major opportunity for the financial services in particular. Adopting chatbots is an important step on the journey toward digitalization. Not only can banks reach their customers through previously untapped channels, they can now meet customer expectations by offering digital services anytime, anywhere.


Maturing Technology

Artificial Intelligence (AI) is maturing and the technology required to build smart bots has become widely available to developers and corporations. Google, IBM, Amazon, and other corporations are commodifying AI. Natural Language Processing (NLP) used to understand user intent are flourishing along with dedicated tools to design bots and model conversations. Tools that provide Deep Learning and Machine Learning capabilities are also available on major cloud platforms.


Should I be using chatbots?


Sure, potentially reaching a billion users has a nice ring to it. And, as with the app bubble, riding the wave of early adopters can have its advantages. However, just because the technology is there, doesn’t mean you have to use it. The best reason to use chatbots is to provide excellent user experience for your customers.


How can a chatbot improve the experience of your users? Tune in next week for the best use cases for building a chatbot.


If you can’t wait that long, download our recorded webinar, How to Harness the Power of Chatbots in Banking.

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Written byElia PalmeProduct Manager, Appway