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Covid-19 speeds chatbot uptake

By ERNEST NORTH, co-founder of digital insurance platform at Naked.

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Even before the pandemic, chatbots were emerging as one of the most convenient ways for consumers to interact with brands. Among service organisations in a global survey from Salesforce in 2019, 23% were already using artificial intelligence (AI) bots and another 32% aimed to do so over the next 18 months. Another survey found that 50%+ of consumers in Australia, France, Germany, the UK and the US reported having used a chatbot to interact with a brand in the past year.

Now, as is the case with so many other digital tools and technologies, COVID-19 is ramping up the adoption of chatbots across most industries. Many companies have needed to accelerate and extend their deployment of chatbots to keep up with customer service requests during the pandemic – especially with people avoiding their physical points of presence. In many cases, this threw a lifeline to companies and their customers at a time that their call centres were overwhelmed by queries from anxious consumers.

Chatbots enable organisations to provide convenient, 24/7 service without needing to make massive investments in contact centre infrastructure. Even during these difficult times, chatbots are able to offer instant responses to customers who need assistance at any time of the day or night. They enable organisations to rapidly scale up their service operations as volumes grow without training more agents, while providing the interactive and immediate feel of a WhatsApp or Facebook messenger chat.

As we move beyond the pandemic, it seems likely that chatbot usage will thrive. On the one side, companies that patched together chatbots to alleviate pressure on their call centre will have experienced how they can reduce costs and improve the customer experience with this technology. From another end, many consumers who were reluctant before to engage with chatbots will now have experienced this service channel for the first time and enjoyed what they found.

AI chatbots have matured

Certainly, today’s AI-driven chatbots have come a long way from yesterday’s basic scripted responses and they can be a pleasure to interact with. Natural language processing (NLP) and other underlying AI technologies have matured, meaning that chatbots are getting better at understanding people all the time. Rather than struggling with complex forms or navigating pages of FAQs, people can simply type a message in a chat window using natural language and get a useful response in an instant.

If you are used to filling in reams of forms to apply online for a product like car insurance, retirement annuity or a cheque account, the simplicity and user friendliness of some chatbots is a pleasant surprise. No need to go through pages and pages of text or spend 45 minutes of your time on the phone to a call centre – you steer your way through the process with the simplicity of a text message conversation with a friend.

In the background, powerful AI and algorithms are used to resolve your query, whether that is generating a quote for car insurance or recommending the mix of funds and products you should include in an investment portfolio. You will feel like you are answering simple yes/no, one-line or multiple-choice questions, but the AI is using a complex decision tree to steer the conversation.

It will, for example, decide which questions to ask, and in which format, based on your responses. The more sophisticated chatbots will also use external databases and contextual data to decide what to ask you and how—for example, your location, the time of day that you are using the app, or how long it took you to answer a specific question.

This approach turns a process that was once an intimidating and time-consuming chore into a simple interaction that takes a few seconds. 

Where the technology is headed

Naked’s chatbots, Rose and Jade, are good examples of how this works in practice and of how quickly the technology is evolving. When we launched Rose, our quoting chatbot, it made it easy to get quotes for car insurance, and later, home insurance, and to buy cover without speaking to a call centre. The bot is clever enough to let you send pictures of your car or home contents, or submit your car licence through the same chat interface. No more need to drive to inspection centres.

Jade guides you through submitting any insurance claim on the app via chat so that you don’t have to speak to a call centre. Now, in the background, machine-learning algorithms have become so sophisticated that Jade can give instant, final approval for some claims without a human even checking it.

This is just the beginning – both of these bots will soon be able to do even more.

Rose, for instance, might soon pop up on third party sites so that you can insure your new electronic devices as you order it from an ecommerce retailer. As for Jade, this chatbot is increasingly integrating with Naked’s 24/7 towing and roadside assistance and emergency home support partners to provide even faster and smoother customer experiences. Issues that once took long phone calls or forms to resolve can now be dealt with in a chat that lasts just a few seconds.

Given the pace of digital change this year, chatbots are here to stay. They bring down sales and customer costs, so that companies can pass on cost savings to their customers in the form of lower fees or premiums. From the customer’s perspective, the experience is just so much better and faster – no drawn-out interactions, more simplicity, and more convenience.

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