With messaging apps on the rise, chatbots are all the hype now. Chatbots are artificial intelligence systems that interact with users via messaging, text, or speech.
Many are deployed on chatbot platforms such as Facebook Messenger, WhatsApp, WeChat, Slack, or text messages. Facebook’s expansion with Facebook Messenger has been giving businesses the opportunity to better reach their target audience through different APIs, and chatbots are becoming a necessity in certain industries.
Despite the complexity of artificial intelligence used to pick content and context from conversations with users, there are a number of platforms and frameworks available to build a sophisticated chatbot. The ease and accessibility to build a customizable bot alongside the increased usage of messaging apps only proves the growth and strength that will push the chatbot industry forward. As the industry matures, the underlying AI technology continues to develop and grow more sophisticated.
Chatbot Market Stats & Size Data
The chatbot market size is projected to grow from $2.6 billion in 2019 to $9.4 billion by 2024 at a compound annual grwoth rate (CAGR) of 29.7%.
Projections show growth over the forecasted period as chatbots reduce operating costs for enterprises. Chatbots can work in segments such as marketing, payments and processing, and service, but when it comes to revenue, chatbot service has a majority of the market share.
Today, consumers are demanding round-the-clock service for assistance in areas ranging from banking and finance, to health and wellness. As a result, companies are rapidly looking to develop chatbots and virtual assistants to answer questions cusomters may have at any time of day.
The chatbot market is growing at a CAGR of 9% in Asia Pacific followed by North America at 31.2 % CAGR and Europe with a 30.4% CAGR. Chatbots in the customer service segment in pariticulr is expected to be the fastest growing market segment between 2019-2026 with a CAGR of 31.6%.
Chatbot Trends & Growth
Some of AI and machine learning’s biggest advancements in recent years have been in perception and cognition. Voice recognition still has a way to go but Apple, Amazon, and Google have made leaps and bounds on advancements in voice recognition with Siri, Alexa and Google Assistant, respectively.
Machine learning systems are now being used to decide trades done on Wall Street and to predict if users will click on particular ads, increasing efficiencies on both the business and consumer ends. In addition to being revenue generators, chatbots can also serve as research bots, or for lead generation and brand awareness to save businesses money.
But companies should take note that the more successful chatbots are the ones that are able to drive a good conversational experience that mimics human agents – they should be able to effectively address customer requests.
In 2019 Microsoft released a service that allowed different firms to develop their own chatbots. Giving firms the tools needed to alleviate administrative tasks via chatbots earned Microsoft a top spot in the healthcare market. Business Insider Intelligence estimates that up to 73% of healthcare admin tasks could be automated by AI, and the adoption of chatbots could save the healthcare, banking, and retail sectors $11 billion annually by 2023.
As more businesses and consumers use chatbots, the more demand will exist for better development of chatbots, thus making it easier for companies to implement them within their business.
Chatbot Ecosystem & Company Landscape
The chatbot ecosystem is quickly expanding despite the relatively robust ecosystem that currently exists. The ecosystem of the underlying technology and platforms for chatbots include deployment channels, third-party chatbots, companies that provide the technology for building chatbots, and native bots.
Deployment channels such as messaging apps, cloud networks, SMS, and email clients are where chatbots live and interact with users. Third-party chatbots are brands and businesses that a customer may use to, for example, order an Uber through Facebook Messenger.
Bot building companies are typically third-party companies that employ AI technology to help businesses deploy their own chatbot across a platform. Finally, native bots are built by the platform or app in which they are operating (for example, Apple’s Siri or Google Assistant).
More and more major companies continue to announce their support for chatbots within their own business, such as LinkedIn, Starbucks, British Airways, and eBay. The key players within the chatbot industry, such as Facebook, Google, Microsoft, and Telegram, have been investing in the development of chatbot technologies for years and continue to work on major bot projects.
The rise of chatbot usage has launched an abundant amount of startup tech following in their footsteps in a variety of industries. Some chatbot startups such as Kasisto, Pypestream, and Automat.ai, are strong in funding and have the potential to revolutionize the industry.
More to Learn
Chatbots are on the rise thanks to increasing demand from consumers to have a 24/7 digital experience. Chatbot architecture and design will evolve to the point that interactive AI will become standard for customer service. Major tech companies are pushing themselves to the forefront of retail, banking, and healthcare sectors with the development of advanced chatbots and machine learning technology.
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