Feb 01 2018 | Artifical Intelligence
AI in the customer engagement - Chatbots
By: Ujjawal Agrawal

Chatbots have gained momentum in past couple of years for driving business outcomes in a cost effective manner with improved customer experience. Chatbots are powered by Artificial Intelligence that act on human’s behalf when coupled with existing messenger and other web and mobile app based platforms. They can perform wide range of tasks like customer support, booking a ticket, giving weather and traffic updates, shopping advisory etc. by eliminating human intervention. The global Chatbot market was valued at US$113.0 mn in 2015. The global Chatbot market is expected to grow at a CAGR of 27.84% during the period 2017-2024. By the end of 2024, the global Chatbot market is expected to reach US$994.5 mn. Large companies are expected to generate revenue of US $ 626.3 mn by end of 2024. APAC and USA (52.7 %) are the leading regions showing high demand for Chatbots. Key vendors for Chatbots are Anboto, Creative Virtual, eGain, Inbenta, Nuance. Key large players, which are investing high in Chatbots, are Facebook, Google, Microsoft, Apple and Amazon.

High stickiness to messenger apps by around 1.2 billion people across the globe is driving everything over these messaging apps like customer service, selling, promotions, advisory, branding. E.g. Microsoft has just created new programming tools for businesses to build bots that will interact with customers on Skype, the Microsoft-owned internet voice, video and messaging service. In coming months, users of Facebook's Messenger app, Microsoft's Skype and Canada's Kik can expect to find new automated assistants offering information and services at a variety of businesses. There is a big M&A trend in the market wherein Large Enterprises are integrating boutique Chatbot firms with their products. Some examples are IBM — Cognea (May 2014), Facebook — Wit.ai (Jan 2015), Google — api.ai (Sept 2016), Microsoft — Wand Labs (June 2016), Shopify — Kit CRM (April 2016)

Potential Use Cases, which could be developed in every sector using Chatbots, some are as below:


  1. Fraud Protection - Proactive alerts by Chatbot on cards usage on suspicious transactions
  2. Drive New Revenue - Cross selling upselling through proactive alerts by Chatbots, for example, when contract is up for renewal or based on customer’s life events
  3. Wire Money Transfer - Seamless money transfer processing help in quick steps


  1. Bookings & Appointments - Embedding Chatbots with calendars and scheduling functionality can improve the efficiency of booking appointments
  2. Billing & Invoices - Bots can generate instant bills and suggest payment methods with discount offers
  3. Patient Communication - Advising customers on health issues based on customer health records of accomplishment, generate alert for chronic disease medications, reminding patients for periodic tests.

Challenges in implementing above Use Cases:

  1. Missing Consumer Insights for building Chatbot : For e.g. building web based Chatbot when consumer wants to interact through mobile app
  2. Complex Conversation : Users may want to break the conversation through complex queries and then give a bad review about the Chatbot
  3. Resistance from human workforce as Chatbots are posing threats on Jobs
  4. Spamming : Customers may get infuriated with proactive alerts and may report spam
  5. Information Security/Regulations: Data Security challenges as Chatbots needs to be integrated with Enterprise Data
  6. High TCO – For different Business Requirement different Chatbots apps will be required, high data volume and velocity will force huge infra setup costs.

How large Consumer App companies and Business Enterprises can beat above challenges. Some recommendations as follows:

  1. Make Hybrid Chatbots : Use Pareto Principle (20% of the questions will be asked 80% of the time), automate Chatbots accurately for those 20% of Questions
  2. Omni channel and 24X7 Chatbots : Build Omni-channel platform based Chatbots so that it can address varied customer requirements round the clock over Mobile Apps/Websites
  3. Reskilling existing workforce in spite of replacing them with Chatbots
  4. Messenger Apps (Consumer/Enterprise) + Artificial Intelligence + Advanced Analytics + Data Masking – All the 4 should work together so that Chatbots should present relevant answers based on Customer 360 degree and data masking will help in maintaining data security
  5. Innovative Models & Partnerships:  Chatbots as a service for scalability, reducing TCO and improved customer experience.