Will embracing chatbots mean replacing humans? How rapidly developing chatbot technology will revolutionize the future of customer service

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1 Will embracing chatbots mean replacing humans? How rapidly developing chatbot technology will revolutionize the future of customer service

2 The fast-paced rhythm of our lives is evident in many of our daily interactions, including our expectations of customer service. We expect the agent at the end of the line to listen to us, to understand us and to fulfill our requests or solve our issues, all in an instant. Emerging cognitive technological applications, such as chatbots powered by Artificial Intelligence (AI), have the potential to satisfy customers needs for fast, convenient service. Technology giants have begun tackling chatbot technology by investing heavily in their own efforts or by acquiring other ready-made solutions. To name a few, Amazon recently launched an open platform where developers can access the speech recognition technologies and conversational interface tools used by Alexa. Google invested in tools that support chatbots, and Samsung purchased Viv, an AI virtual assistant. Chatbots are already helping businesses provide faster and more reliable customer service, increase their productivity and remain cost-competitive. We are seeing an accelerated rate of chatbot solution deployments as businesses are adopting commercial applications of the latest AI technologies. A recent study by Juniper Research, covering 17 countries across the globe, reveals that nearly 80% of companies have used or plan to use chatbots by It is estimated that use of virtual assistants grew by 23% in 2017, as customers are increasingly adopting Alexa, Cortana, Siri and Bixby and others. 2 Gartner forecasts that by 2020, a customer will communicate with a service provider without human interaction 85% of the time. 7 Chatbots helped companies save US$20 million in the US in 2017, and by 2022 annual savings from chatbots will reach US$8 billion. 1 Chatbots are here to stay. New AI-powered chatbot applications offer undeniable benefits to businesses and are changing the way organizations interact with their customers for good. But how are chatbots affecting customer perception and experience? Digital interactions provide real-time, accurate responses to low complexity customer requests; however, in our quest for efficiency, the human touch in the interaction may be overlooked. But does this really make a difference to the customer?

3 How are chatbots affecting customer perception and experience? EY s Global Consumer Banking Study (2016), which surveyed 55,000 consumers from 32 countries, found that 62% of customers would like to be able to switch easily between different ways of interacting with a bank. 3 The evidence on customer perception of chatbots is mixed. According to a recent study by Forrester Consulting, 83% of worldwide consumers prefer to interact with humans. 4 Furthermore, a study by LivePerson reported that 56% of survey respondents would rather speak with a human agent than a chatbot. 5 The study, which involved more than 5,000 consumers from six countries, indicates that about half of consumers have a neutral perception of chatbots, with about a third of them unable to differentiate between chatbot and human interactions. According to the same study, about 38% of consumers attitudes and perceptions are positive, while only 11% rated their interactions as negative. A third study by Aspect Software found that two-thirds of consumers feel good when they can solve their customer service issue without talking to a human agent. 6 In conclusion, although the use of chatbots is becoming more widely accepted, it seems that at least one-third of today s consumers still prefer a human touch to their customer support interactions. Challenging customer perceptions One way to improve customer perception of chatbots would be to allow easy access to a human agent anytime during the digital interaction. EY Global Consumer Banking Study (2016), which surveyed 55,000 consumers from 32 countries, found that 62% of customers would like to be able to switch easily between different ways of interacting with a bank. 3 Similarly, a study by Aspect Software found that 86% of consumers who are open to chatbot interactions said that they would like to always have the option to easily transfer to a human agent. 6 To some extent, the culprit behind negative chatbot experiences may be poorly designed solutions that fail to fulfill customer expectation of seamless and fast service. According to EY s Global Consumer Banking Study, about 50% of consumers prefer a digital interaction with their bank and would revert to an agent only if the online services are not good enough. 3 Consequently, one way to improve customers digital experience is to make chatbots as errorless, productive and useful as possible. Enabling operational excellence to shorten service timelines and eliminate errors would help build customer trust and increase banks relevance with customers, according to the same study by EY.3 Another way to build trust and increase relevance to end users would be to integrate chatbots with transactional systems (either through IT automations or more agile solutions, such as RPA). This would not only improve the quality of the customer experience as they would be able to get more done in a shorter time but it would ultimately improve the productivity of the interaction for the company. If the job can be done swiftly and easily in a digital interaction, then customers are happy and companies are better off. For example, one chatbot deployment at a large private bank from India allowed customers to easily perform various transactions that would otherwise have taken many clicks to complete. It resulted in a 160% surge in customer transactions month-on-month.4

4 Finding a balance In the future, there is potential to improve customer perception of chatbots as technology evolves and companies learn how to improve their solutions. It is probable that we will one day accept chatbots as an ordinary part of our lives. They will be the first point of contact with our service providers, able to solve straight-forward requests and, when needed, swiftly transfer us to an agent, where the human touch of customized advice will cater to our more sophisticated needs. References 1. Lauren Foye, Chatbots: Retail, ecommerce, Banking & Healthcare , Juniper, 9 May Ratna Puri, The rise of the chatbot in the contact center, The Economic Times, 17 September EY Global Consumer Survey, EY (via EYGM Limited. 4. Abhishek Baxi, How Chatbots And AI Are Helping India's Businesses Boost Their Customer Service, Forbes, 9 September Laurie Beaver, Chatbots are gaining traction, Business Insider, 18 May Murray Newlands, No One Is Happier About Customer Service Chatbots Than the People They Are Designed to Replace, 28 August Freddie McMahon, Gartner Research early stage enterprise chatbot insights the revolution of conversations, Finextra, 18 December 2017.

5 Contacts Aurelia Costache Partner, Ernst & Young SRL Advisory Mobile: Ileana Guran Manager, Ernst & Young SRL Advisory Mobile: ileana.guran@ro.ey.com EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who learn to deliver on our promises to all of our stakeholders. In doing so, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity.ernst & Young Global Limited, a UK company limited guaranteed, does not provide services to clients. For more information about our organization, please visit ey.com EYGM Limited. All Rights Reserved. ED None SCORE no GBL This material has been prepared for general information purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com