The Chatbot Evolution: From Rule-Based Chatbots to Conversational AI

The Chatbot Evolution: From Rule-Based Chatbots to Conversational AI

In the last years, chatbots have made a huge development and contributed enormously to the evolution of the modern service desk. As a result, the way companies interact with their customers has also changed tremendously. For example, calling your bank for a simple support request is almost old-fashioned these days. 

Instead, customers demand other ways to communicate, preferably via channels they use in everyday life, such as the company websites, social media or WhatsApp. In this context, chatbots have proven to be a useful tool, providing customers with a 24/7 point of contact via their preferred channels. However, this also increases the need for virtual assistants. Simple rule-based chatbots that allow a set question and answer game are no longer enough to meet customer expectations. Companies should nowadays rely on Conversational AI, which is almost indistinguishable from a human. 

First chatbot generation with shortfalls

Our reality today has been merely a thought construct at the beginning of the chatbot evolution. In 1950, computer scientist Alan Turing researched the ability of machines to think in his paper “Computer Machinery and Intelligence”. However, it was not until 1964 that Joseph Weizenbaum developed the first chatbot, ELIZA. Further attempts in the progress of chatbots showed that the time for chatbots has not yet come. 

In fact, chatbots have only been relevant in recent years. At the beginning of their development, however, they have not been able to offer those benefits they are offering today thanks to artificial intelligence (AI). Instead, first-generation chatbots still showed clear deficits because they did not offer a great user experience. This was due to the fact, that they could only answer certain questions on the basis of scripts. 

These first, rule-based chatbots were therefore primarily suitable for simple FAQ content. This means they were only able to answer a certain set of predetermined questions. Despite the small feature set, it also took a lot of time to build and implement a chatbot. Moreover, because they were not based on Artificial Intelligence (AI), they could not learn on their own and continuous manual training was required to teach the chatbot new tasks or questions. 

When comparing the efforts and teams of data scientists and engineers required to build a chatbot with the actual benefit that has been offered at this point in time, the first chatbots have not been very cost-effective. 

Artificial intelligence comes into focus

Thus, a more agile approach to put Artificial Intelligence in the context of chatbots has been the consequence. A chatbot itself is nothing more than a programmed set of answers. Hence, its ability to offer special benefits and an exciting customer experience is more realistic in combination with AI. This enables the chatbot to refer to historical data and formulate answers independently – and thus becoming Conversational AI. 

Consumers played a crucial role in this development. Customer service is a top priority for any business, and customers today expect nothing less than a high-quality and personalised user experience. After all, without satisfied customers, the company cannot survive in the long run. 

In the age of digital technologies, this can become challenging for businesses. There are always new channels that need to be integrated in order to offer customers an optimal customer experience. In addition, companies are more and more expected to communicate with their customers in the same way as one does with colleagues, friends or family. A rule-based chatbot does not have this contextual understanding. Therefore, it is clear, that chatbots using AI will have success in the future.

Covid-19 drives chatbot evolution

Especially due to Covid-19, Conversational AI has shown rapid developments and changes in 2020, bringing chatbots much more into the focus of companies. 

Many employees could no longer perform their jobs at the same levels, while customers continued to expect high-quality, personalised service. 

Virtual agents and assistants have proven to be valuable support in this regard. Conversational AI, for example, can resolve customer queries on its own, thereby relieving remote employees. Without Artificial Intelligence and Machine Learning, a chatbot is thus hardly useful for companies nowadays.

We are currently heading for the golden age of speech recognition, driven primarily by natural language processing (NLP). Virtual assistants with AI will be able to better perceive customer intent and generate personalised responses. 

Conversational AI ready to use within a short period of time

Natural Language Processing also ensures that the new generation of chatbots no longer needs lengthy AI training, complex manuals or professional development teams that manually refine chatbots. Conversational AI learns continuously and gets smarter with every interaction. As a result, it can handle users’ queries on its own.

At the same time, it no longer takes weeks or months to implement a chatbot these days. Rather, with the right service provider, it is possible to have an AI-based chatbot live within only a few days – with benefits starting on day 1. For businesses, this makes the use of Conversational AI much more interesting.

Arriving in the AI era

As companies slowly move past the pandemic, investment in Conversational AI will further increase. This is specifically because of the new growth opportunities, cost savings and drive of innovation it offers. At the same time, AI-based chatbots are a great opportunity to interact with customers in a more flexible way. Self-learning AI also eliminates the need for historical data and data scientists. 

For companies, one would therefore recommend getting in touch with chatbot providers as e-bot7, which offers an already established AI that delivers immediate results. Both, a lengthy and complex development, as well as in-house teams of experts consisting of software engineers and data scientists, are not needed any more. 

While chatbots are already an integral part of customer service for many companies, we should be aware that technology must and will continue to evolve. Thus, there is no end in sight when it comes to the evolution of technology and chatbots. The new generation of bots has now only arrived in the AI era.

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