What is a chatbot?
A chatbot is a computer program that simulates human conversation, allowing humans to interact with digital devices as if they were communicating with a real person. Chatbots can be as simple as elementary programs that answer a simple question with a single-line response. Or as sophisticated as digital assistants that learn and evolve to deliver increasing levels of personalization as they collect and process information.
How does the chatbot work?
Chatbots have different levels of complexity, being either stateless or stateful. Stateless chatbots treat each conversation as if they were in conversation with a new user. In contrast, stateful chatbots can analyze past interactions and frame new responses in context.
Chatbot requires little or no coding when added to the service or sales department. Many chatbot service providers allow developers to create conversational user interfaces for third-party business applications.
An important aspect of chatbot implementation is choosing the right Natural Language Processing (NLP) engine. For example, if the user interacts with the bot through voice, the chatbot needs a speech recognition engine.
How has chatbot evolved?
Chatbots like Eliza and Parry were early attempts to create programs that could at least temporarily trick a real person into thinking they were conversing with another person. The effectiveness of PARRY was benchmarked in the early 1970s using a variant of the Turing test. The testers only correctly identified the human versus the chatbot at a level consistent with random guessing.
Chatbots have come a long way since then. Developers make modern chatbots on AI technologies, including deep learning, NLP, and machine learning algorithms. These chatbots need a huge amount of data. The more an end user interacts with the bot, the better its voice recognition that predicts appropriate responses.
The use of chatbots is increasing in the business and consumer markets. As chatbots improve, consumers have less to fuss about while interacting with them. Between advanced technology and a social transition to more passive, text-based communication, chatbots help fill a niche that phone calls are used to fill.
Types of chatbots:
A chatbot works in two ways: Set Guidelines and Machine Learning.
- Set Guidelines Chatbot
- Machine Learning Chatbot
Set Guidelines Chatbot:
A chatbot operates with a set of guidelines and is limited in its interactions. It can give replies only to a set number of requests and vocabulary and is as intelligent as its programming code.
The bot will give a command like “Please let me know what I can do for you by saying account balance, account transfer, or bill payment.” If the customer responds with a “credit card balance”, the bot will not understand the request and will either proceed to repeat the order or transfer the caller to a human assistant.
Over time, chatbots have developed with new AI advancements and are far more accessible to human interaction than chatbots based on set guidelines.
Machine Learning Chatbot:
A chatbot that functions through machine learning consists of an artificial neural network that is inspired by the nerve nodes of the human brain. As it is introduced to new dialogues and words, the bot is programmed to self-learn. In fact, as the chatbot receives new voice or text dialogue, the number of inquiries it can answer and the accuracy of each response increases.
Meta has a machine learning chatbot that creates a platform for companies to interact with their consumers through Messenger applications.
Using the Messenger bot, users can buy shoes from Spring, order rides from Uber, and chat. If a user asks “What’s new today?”The bot will respond to the request.
Chatbots are used in different fields and are built for different purposes. There are retail bots designed for picking up and ordering groceries, and weather bots that give you weather forecasts for the day or week. And simply friendly bots that just talk to people when they have a need for friends.
The fintech sector also uses chatbots to facilitate consumer inquiries and applications for financial services. A small business hoping to receive a loan from the company only needs answers to important eligibility questions asked by the bot in order to be considered eligible to receive up to $300,000 in financing.
Advantages And Disadvantages of Chatbots:
Chatbots are convenient for providing customer service and support 24 hours a day, 7 days a week. They also free up phone lines and are less expensive than hiring people to support them in the long run. Using AI and natural language processing, chatbots are getting better at understanding what customers want and providing them with the support they need. Companies also prefer chatbots as they can collect data regarding customer queries, response time, satisfaction, etc.
However, chatbots are still limited. Even with natural language processing, they may not fully understand the customer’s input and may provide inconsistent answers. Many chatbots are also limited in the scope of questions they are able to answer. This can lead to frustration due to no feelings, lack of empathy, and personalization with a fairly generic response. In addition to customer dissatisfaction with not reaching a human, chatbots can be expensive to implement and maintain. Especially if they must be customized and updated frequently.