In the last decade, there has been a seismic shift in customer expectations. The new-age customer demands instant response and resolution to their queries. The pressure of being available 24×7 to address customer queries and delivering beyond the normal has never been more on businesses. This new customer-business dynamic has led to the rapid adoption of AI chatbots across industries. They are fast becoming the first support interaction customers have with businesses. In fact, the global AI chatbot market is estimated to be worth 2167 million U.S. dollars by the end of 2024.
AI Chatbots: Transforming Interactions
Using natural language processing and machine learning, AI chatbots are learning and comprehending human language to respond in a natural way to solve customer queries and provide exceptional customer service. In the 2023 Asia Pacific Economic Cooperation, OpenAI CEO Sam Altman was asked what new features the field of AI chatbots bring in 2024. “A leap forward that no one expected” he instantly replied. As industries are expanding, businesses are finding ways to differentiate themselves from competitors by providing a quick and seamless customer experience (CX), and AI-enabled conversational chatbots and voice bots are in the thick of it. 2024 is going to be the year of chatbots as they have become the new world order in CX by providing personalized experiences for each customer. But how far have they come to mimic human-like understanding and engagement? Let’s find out.
Are Chatbots The New Human Agents?
According to G2, 58% of B2B companies and 42% of B2C companies used chatbots in 2023. The same report suggests that 55% of companies generated high-quality leads using chatbots in 2023. Among all these positives an interesting stat came up. 27% of customers were unable to tell if their last customer support interaction was with a human or a chatbot.
AI chatbots have truly revolutionized the way businesses interact with their customers. Though AI chatbots provide seamless customer support they are still years behind in the emotional intelligence required to navigate a situation delicately. Let’s understand this with the help of an example. In the e-commerce industry, consider a scenario where a customer has received a damaged product and is connected to an AI-enabled chatbot for assistance. While the chatbot may efficiently process the request for a return or replacement based on predefined rules, it may struggle to convey empathy or understanding of the customer’s frustration.
Despite this, there’s a surge in chatbot adoption in businesses across various industries such as healthcare, e-commerce, and banking. Let’s look at the impact of chatbots in these industries.
Impact of Chatbots on Different Industries
Healthcare
The United States tech giant Google forayed into the AI healthcare realm with the launch of Med-PaLM, a large language model (LLM) chatbot designed for the medical domain to provide accurate answers to questions related to medicine and healthcare. In late 2023, it entered the testing phase at the Mayo Clinic Research Centre in the United States. The healthcare chatbot is expected to be especially valuable in areas with limited access to healthcare professionals. The global healthcare chatbot market is expected to reach 432 million U.S. dollars by 2028 signaling a huge potential for chatbots in the healthcare industry.
Banking
According to RBI’s survey in June 2023, 11 out of the 12 public sector banks and 15 out of the 60 private sector banks in India are using chatbots in their workflow powered by artificial intelligence and machine learning technologies. In most of these cases, chatbots are accessible to citizens through websites and banking applications. Although chatbots are gaining popularity in banking workflows, their adoption is not new. Back in 2017, SBI rolled out its chatbot called Sia to respond to customer queries by providing information about SBI’s range of products and services. Now it has evolved into ILA, the SBI Card’s interactive assistant. Axis Bank’s chatbot Axis AHA when launched in 2018 handled 20 million customer queries with 97% accuracy. It also led to an increase in users by 31X and transitions by 50X and it is still going strong.
E-commerce
The e-commerce industry has seen phenomenal growth in the last decade. In India, the e-commerce industry is projected to have a gross merchandise value of 350 billion U.S. dollars by 2030. Enhanced CX will play a huge role in the e-commerce industry. Meta and Jiomart have joined together and introduced a revolutionary end-to-end shopping experience for customers where they can browse and purchase products through Jiomart’s entire catalog using WhatsApp. This collaboration increased Jiomart’s average monthly orders by 7X in 2023. The same year Shopify also launched Sidekick, an AI chatbot that can help retailers redesign their e-commerce websites and analyze sales data. Using prompts retailers can instruct the chatbot to change the layout of a webpage or product listing, add new sections, and generate website copies for the webpages it creates.
Google, OpenAI, and other tech giants are advancing AI far more rapidly than any other technologies because of the efforts in research and the potential of AI being beneficial in different domains. The AI chatbot industry in 2024 is set to be defined by a remarkably rapid improvement in technology enabling AI to generate new types of media, imitate human reasoning in modern ways, and seep into our everyday lives.
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