The rise and rise of chatbots

Singapore

CHATBOTS promise to be cheaper, faster and better than their human alternative. No wonder then than businesses from banks to retailers are rolling them out.

So, are chatbots all that they're cracked up to be? It seems execution has a key role to play.

A report from research firm Forrester in July highlighted that 57 per cent of firms globally are already using chatbots or plan to introduce one this year. These could include customer-facing chatbots, transactional chatbots to order services or even chatbots used internally by employees.

However, companies shouldn't necessarily rush to jump on the bandwagon - especially when it comes to customer-facing chatbots - just to get ahead of their competitors.

"Most chatbots fail because of an unclear purpose and poor planning," warned Forrester's senior analyst, Wang Xiaofeng, adding that companies should first establish clear business goals and key performance indicators.

Other factors contributing to failure include setting targets that are too ambitious for chatbots' existing capabilities as well as hurrying to launch a chatbot before it has been rigorously tested. First-time success is crucial because consumers are unlikely to want to use it again if they have a poor experience.

"In the Asia-Pacific, Singapore is probably the most advanced in terms of investing in chatbots," Ms Wang noted. "Companies are more willing to experiment and like to explore emerging technologies. Customers here are also digitally savvy and have high expectations."

Global market intelligence firm IDC and technology company Kasisto estimated the global banking sector will be the biggest contributor to artificial intelligence (AI) market spend, accounting for 20 per cent of the nearly US$50 billion that will be invested worldwide on cognitive systems and AI by 2020.

In Singapore, banks such as DBS, OCBC and Citibank have already launched chatbots or have plans to do so soon.

These can generate perks for companies such as boosting productivity, raising awareness of their products, cost savings, contributing towards revenue generation, delivering personalised information to customers as well as acquiring new customers.

Said chief executive of US-based Kasisto, Zor Gorelov: "Conversational AI experiences not only simplifies banking for consumers, it also delivers real business results and benefits for the bank by reducing customer care costs and increasing revenue with new, engaging banking experiences."

Kasisto creates bots that can help customers manage money, track expenses, analyse spending and even make payments.

In Singapore, Kasisto has worked with DBS Bank on the POSB digibank Virtual Assistant, which allows customers to chat on Facebook Messenger to bank online.

According to Kasisto, the chatbot accurately handles over 82 per cent of requests without human intervention. As such, digibank requires only 20 per cent of the resources of a traditional bank.

Meanwhile, OCBC Bank has introduced both home loans chatbot Emma, as well as a HR mobile app for its employees, which comes with an inbuilt-chatbot Buddy.

Emma, which was launched in January, has tackled 65,000 queries from nearly 10,000 chat sessions so far. Of these, 15 per cent of the chats resulted in leads which brought in loans worth over S$50 million in total.

"With Emma's capabilities, we have been able to ease the dependency on our front-line staff and deploy our resources more effectively," said OCBC's head of consumer secured lending, Phang Lah Hwa. "Beyond handling enquiries on new home and renovation loans, Emma also actively services existing customers . . . (and) is able to respond to customers' requests on restructuring or pre-payment of their home loans."

Fifteen per cent of OCBC's employees signed up for the HR app within the first month of release, giving staff quick access to information such as medical expenses reimbursement claim status or their annual leave balance.

Over in Malaysia, RHB has teamed up with financial products website RinggitPlus to introduce a chatbot to facilitate personal loan applications. The bank expects to grow its personal loan disbursement by 60 per cent to 60 million ringgit (S$19.16 million) per year thanks to it.

In the insurance sector, Prudential Singapore has introduced askPRU which acts as a round-the-clock assistant for its financial consultants, getting them information more swiftly so they can provide better service for customers. This could mean getting information on their customers' life insurance policies such as claims status and policy surrender value instantly. Aside from making them more productive, this also frees them up to handle more complex tasks such as advisory work.

"We have seen a 26 per cent reduction in call volumes from our financial consultants over the months of August and September, proving that askPRU is actively used to respond to customer queries," said chief operating officer Theresa Nai.

While customers tend to prefer face-to-face interaction when it comes to financial products, a chatbot can serve as the first touch point, making life insurance easier to understand, Tokio Marine Life Insurance (TMLS) chief James Tan said. It introduced chatbot TOMI for the public earlier this month and aims to introduce it to other Asian markets where it operates.

"TOMI . . . prepares them to have more meaningful, well-informed discussions with their financial advisers on their insurance needs," Mr Tan said.

Aside from the perks they bring companies, chatbots can also deliver value to users, such as access to information swiftly and round-the-clock, and a better customer service experience.

In a competitive retail environment, jewellery chain Goldheart's virtual assistant, Bling, seeks to give its consumers information, which could include tips on how to choose jewellery and anniversary reminders.

"It is also (our) long-term strategy to diversify (our) customer base and connect with the millenials," said Iris Tan, Goldheart's senior brand manager.

Meanwhile, crowd funding platform Funding Societies introduced its chatbot Miyu after realising that 30 per cent of enquiries came late at night from business owners or investors who were travelling or busy earlier during the day.

While Miyu can currently answer most products and service-related queries from SME owners and investors, more complicated questions will be directed to the customer experience team, director Vikas Jain explained.

In time, the plan is for Miyu to act as a virtual relationship manager by assisting SMEs in loan applications as well as carrying out other activities such as the opening of an account, and make deposits and withdrawals.

Over the next three to five years, chatbots will get more sophisticated thanks to AI, Forrester's Ms Wang reckoned.

"We are certain that the future of chatbots lies in their ability to converse with the user verbally," added OCBC's Ms Phang. "This will allow for more personal conversations and more tailored responses from the chatbots."

In the meantime, efforts are being made to equip individual chatbots with a fun personality to better connect with users, such as the Bus Uncle chatbot which spouts Singlish-laden retorts on bus arrival times. And consumers, for their part, seem happy to engage.

"There was one user who asked Miyu out on a date, and another who asked her to sing a song," said Mr Jain. "Unfortunately, she had to disappoint one, but delighted the other!"